IBM Malaysia MD Tells Corporates Ignore Cloud At Your Peril

DSA recently met Paul Moung Managing Director of IBM Malaysia at the Pikom leadership Summit that took place in Kuala Lumpur in September this year. Moung took part in a debate about transformative technologies that Malaysian CIOs will need to embrace. We noted Paul’s concerns about Malaysia’s technical leaders not embracing change quickly enough especially when it comes to cloud adoption. A few weeks later we were able to meet Moung at his Office in KL to dig a bit deeper into his concerns.

DSA - The debate you took part in at the Pikom Leadership Summit was discussing how IT leaders need to understand and embrace transformative technologies. We have seen that IBM itself is a business in huge transformation; do you agree this is the case and why this transformation needs to happen?
PM – IBM is always evolving and it is fair to look at some of the current changes as transformative. For example it is not a coincidence that we acquired SoftLayer around the same time we sold IBM System x.   When IBM started its acquisition trail about 10 years ago we mostly bought software companies. SoftLayer is a departure from that it is our first infrastructure acquisition. Buying SoftLayer has given us an immediate public cloud with global presence. It also means that like in the days of the IBM PC once again we have something personal that we can offer the consumer.
Our biggest challenge is to ensure that people understand how we are changing. IBM still has something to offer to the SME through to the largest enterprises. However, what we are offering and how we are offering it, is changing. For example Watson run on the cloud and transforms how we will interact with computers. Our challenge is to make people aware of how and why they can benefit from IBM’s transformation.

DSA – Can you tell us a bit about IBM SoftLayer? Is it a direct competitor to public cloud offerings like AWS and Azure?
PM – IBM does not play in the commodity public cloud space. Our aim is to be a true business partner to the companies that choose to work with us. SoftLayer offers a degree of transparency and flexibility such as single tenant private cloud options that are just not available with commodity public cloud offerings. We also understand that every cloud implementation is different and one cloud offering may not suit every application. We even offer tools to test just how well SoftLayer will suit a specific application. Applications will drive cloud adoption. The ecosystems, which go with these applications, will also play an important part in cloud adoption. In this way SoftLayer is not really in the same market as AWS.  We are plugged into the ecosystems that will look to us to build integrated hybrid cloud solutions.

IBM's SoftLayer Head Office - The First Major Infrastrcuture acquisition after years of Software Company acquisitions.


DSA - Just how revolutionary do you feel cloud computing is?

PM - Public cloud is truly a new paradigm for the industry. It changes cost models and has a massive impact on deployment time and application lifecycle management. However businesses  need to be sure to plan correctly as the lure and simplicity of cloud may lead users down paths they  later regret. An application may start on public cloud due to low capital investment then as business grows that application may need to be brought back “in house”.  How easy is it going to be to do that? The migration could be challenging. Cloud does fundamentally change many aspects of IT, but it does not take away the need for planning.

The real revolution is in the economics of cloud. In the commodity space we see AWS is currently operating at a loss, and that can’t go on forever. For IBM we still have to create value in the cloud model, as we cannot drive top line  offerings at the expense of bottom line losses. Notwithstanding business models, cloud economies of scale are a reality. The underlying technology of cloud enables far less resource to manage massive scale. There is dispute as to whether the clustered computing approach of cloud providers meet the algorithm outlines in Grosch’s law but the efficiencies being driven by the technology are proven. The new battle ground for companies “born in the cloud” is to drive efficiencies in sales and marketing as that is where their costs are rising.

DSA - At the recent Pikom leadership event you expressed concern that Malaysia’s IT leaders are not embracing cloud quickly enough. Can you explain why you think that is happening?
PM - Actually the Malaysian SMEs are moving fast to embrace cloud. We see that SMEs are defining new business models with cloud..  It’s in the enterprise space where I see the adoption rate is slow. There are lots of inhibitions and vendors, including IBM, have not been doing enough to dispel these inhibitions.  Other countries in the region are seeing enterprise customer embrace cloud more quickly. Overall ASEAN is lagging behind most regions in the world. Companies like IBM need to partner and guide enterprises in Malaysia as there is a huge amount of homework to be done to produce a viable cloud strategy. It requires conscious and deliberate process to determine entry point and stages of cloud adoption.  
My major concern for Malaysian enterprises is if they lag behind the rest of the region they will find their competitive position worsening.  Regional companies that adopt cloud based computing will become far more agile and dynamic in how they can respond to market demands. If Malaysian enterprises do not cloud-enable their systems at the same pace as their regional counterparts it will become difficult to stay competitive.

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