AIMS Group CEO Chiew Kok Hin calls 2016 a record year for AIMS. “We thought 2015 was a good year, but surprisingly for 2016 we surpassed previous year results.
“We grew in the region of 24-percent. This is more than the industry growth average of 15-percent.”
Chiew attributed this result to good strategic planning and good execution, and even joked it was due to ‘a supernatural ingredient we have that allowed us to outpace industry so much.’
Jokes aside, he frankly added, “It’s a matter of being in the right place at the right time for the right opportunity. All segments we are in, whether carrier and over-the-top (OTT) or enterprise, has grown. We have even secured quite a fair bit of local and global established brand customers.”
The number of customer acquisitions in 2016 contributed at least 14-percent increase to their total list of customers now.
Strength and growth
AIMS’ strategy has been position themselves as the most interconnected data centre.
“The customers we have brought in have further strengthened our position and now we are in leading position. The gap between us and number two is quite big,” Chiew said.
The seeds for regional expansion has also been planted with acquisitions in Thailand and Cambodia. “We have also announced our intention to purchase a telco infrastructure company in Thailand.
“All this will take us further afield regionally,” he commented, adding that it is always AIMS’ ambition to expand overseas.
Industry
Because of effort to push forward on the part of MDEC and MDCA which is Malaysia’s national data centre industry alliance, the Inter-Data Centre (Inter-DC) Network is up and running.
Chiew observed that both parties had the motivation to do it, and AIMS was appointed the contractor to spearhead this project.
This project is meant to address current connectivity challenges and also bring down bandwidth costs via aggregating demand and buying in bulk.
During an earlier media workshop this year, Wan Murdani Wan Mohamad, MDEC’s Director of Digital Enablement, had also described the project as a pilot and expressed his wish to see it replicated in other locations within Malaysia.
For Chiew, the effort brought the industry two steps forward towards its overall goal, and then took one step backwards as well.
“The Inter-DC network is up and ready but no one is promoting it,” Chiew opined as there had been no event to officially launch it, or follow-up roadshows to raise awareness about it.
This lack of follow-through could cost the whole local data centre industry an opportunity to overall expand and grow.
Chiew pointed out, “About 16-percent growth is from three data centres out of the total 24. Perhaps it’s time to buy out (local data centres) if there is a right fit.”
The AIMS Group, Southeast Asia’s leading carrier-neutral data services provider, today shares its review of 2016 and outlook for 2017.
AIMS Group Chief Executive Officer, Chiew Kok Hin says “In the last two years we have seen data centre players going bust due to mismanagement and oversupply of space that lead to a price war.
At the start of the internet boom, data centres grew in demand, bringing in good return of investment for the initial players. That attracted more players to join the market. Unfortunately a data centre is not just a piece of real estate, you need to have the expertise to manage clients’ needs and ever changing technology that at once acts as a catalyst and an obstruction to the industry.
The data centre industry is a CAPEX heavy industry with high operations cost. And unless you have the expertise to balance these, your company is set to make losses.
And when a data centre falls, customers are left at a lurch to move their data at a very short notice. So there’s a trust deficit as well with companies looking towards public cloud hosted out of the country than in the country itself.
AIMS in 2016
“For AIMS this has been one of our best years. We will continue to report double digit revenue growth at the end of 2016, outnumbering the industry’s expected growth. Our long standing ability to commit excellence to our customers makes us a trustworthy partner. We have stayed above the current by constantly being in line with the changing landscape of the industry. Backed with strong expertise and foresight, AIMS has risen above the industry norm and is growing both locally and regionally. Our data centre space has been expanded by 10000 this year and we are now at a 90% capacity, and we are still getting request for space,” adds Chiew.
AIMS invested heavily into building a greener data centre and to provide our clients with cloud abilities. They are focussed on expanding the business regionally in emerging economies who will benefit from AIMS expertise and industry knows how of running a data centre.
In 2016, AIMS was also the first data centre in Asia Pacific to partner with Network Infrastructure Inventory Inc. (Ni2) to provide customers with IT Service Management (ITSM), Operational Support Systems (OSS), and Data Centre Infrastructure Management (DCIM) capabilities in one platform. The platform is essential for customers in the financial, oil & gas and telecommunications sectors as it gives them the capability to automate trouble shooting, integrate monitoring, optimise infrastructure design for faster capacity delivery, improve customer experience and enhance self-management capabilities.
Data in 2017
“The government is moving towards making KL a smarter city. Smarter cities means more data collected, more powerful facial recognition cctvs and that means more computing power. So we will definitely be seeing more need for data storage.”
“In the last two years we have also seen more IPTV or online content providers emerge. From only one in 2015, IFLIX, we now have Netflix and The Stars DIMSUM. So we can expect to see more large scale content providers emerge in the coming years besides small scale ones. There’s a trend to producing videos via Instagram, Boomerang, Snapchat and more and this is further contributing to the increase of storage space,” he adds.
Challenges in 2017
“High cost of power continues to be the pain point for the industry and unless we see the government taking a proactive move, this will remain our biggest challenge. Power makes up 40 percent of our operating costs, and what we’ve noticed is that, as more data is consumed, power consumption increases.”
“While we hope the government will look into recognising the industry as an important aspect of the government’s aim to push for a digital economy, we are taking measures on our side as well. AIMS green technology investments will make power consumption more efficient. Further to that we are using infrastructure that can handle higher temperature. Even if we increase the temperature by 1 degree, we will see immense savings in terms of power cost. The challenge here is that customers aren’t able to move away from the mentality of what the ideal temperature is. We hope the industry associations will look into advocating the increase in temperature,” ends Chiew.
About AIMS Group of Companies (AIMS)
The AIMS Group (AIMS) is Malaysia and South East Asia’s leading carrier-neutral data centre operator and managed services provider. Located in the central business district of Kuala Lumpur and Cyberjaya, AIMS provides international class data storage facilities and ancillary services, augmented by an unrivalled platform for inter-connectivity; AIMS is one of the most interconnected sites in Malaysia and SEA. Besides its main datacentre in Menara AIMS, AIMS also operates datacentres in Cyberjaya, Johor, Singapore, Penang and Sabah. The AIMS Group was awarded the “Best Data Centre Engagement of The Year” by Outsourcing Malaysia in 2011, the Frost & Sullivan “Data Centre Services Provider of the Year” award in 2014, 2016 and Computerworld’s Infrastructure as a Service 2015 Award.
WITH a stream of global uncertainties coming into play, it is inevitably tough for companies here to have foreign market access and grow market share.
Malaysia Digital Economy Corporation (MDEC) Global Acceleration and Innovation Network (GAIN) programme may be the much needed impetus in times such as this, as it is designed to catalyse Malaysian tech companies that have the potential to be global tech icons.
It is estimated that while about 88% of Malaysian information technology (IT) firms reported an average yearly revenue of RM1.4mil, these companies have not broken the start-up status ceiling. There are many reasons for this including lack of appetite for regional expansion, access to scale-up capital and most importantly, the lack of visibility to the global markets.
As Malaysia is located at the heart of Asean, making it an ideal gate-way to access the region population base of 600 million and a collective gross domestic product of US$2 trillion (RM8.9 trillion), it makes sense for tech firms to further extend their reach for better growth prospects.
We spoke to three local tech companies that are fast expanding in this region S5 Systems, AIMS Group of Companies and Piktochart. These firms not only have visionary leaders but own outstanding tech potential and encouraging revenue and growth results via innovative business models and regional expansion plans.
AIMS Group of Companies
WITH a strong presence in Asean, AIMS Group of Companies was acquired by TIME dotCom Bhd in 2011 and known for its data centre that hosts all domestic and more than 80% of foreign telco carriers, apart from local Internet and communication service providers.
The company currently supports more than 300 customers, owns and manages approximately 60,000 sq ft of secure data centres, certified to international standards.
Recognised as a firm with high growth potential by an international research house, CEO Chiew Kok Hin said the collaboration under the GAIN programme benefitted AIMS in terms of facilitation and speed to expand in the foreign markets, more networking opportunities, apart from keeping abreast with the latest industry outlook.
Through its flagship centre in Menara AIMS located in Kuala Lumpur and other data centres strategically located in Cyberjaya, Penang, Johor Baru and Kota Kinabalu, the firm’s data storage facilities and ancillary services provide comprehensive interconnectivity coverage and options in the region.
Chiew said the company had invested a substantial amount in expanding the data centre capacity to 10,000-sq-ft available capacity now.
“About 90% of this will be sold out soon due to high demand,” he noted, adding that the company’s other affiliated data centres are located in Thailand, Vietnam and Hong Kong.
Amidst the challenging business landscape, Chiew said AIMS is on an aggressive expansion mode, particularly focusing on ASEAN.
By successfully winning notable global contracts this year, he said AIMS is confident of securing more prominent ones in years to come.
“The market is tough now and is expected to be even more challenging next year due to macroeconomic factors.
“Still, the industry is expected to grow as big data, Internet of Things, Internet of Everything, automation software and other application development, among others, expand vigorously,” said Chiew, adding that growth of these areas contributed to the importance of data centres and managed services.
While AIMS is expected to grow above the industry’s compounded annual growth rate, Chiew said in such a competitive industry, the company had built a solid reputation and currently partnered with technology providers such as IBM, Akamai Technologies (for security and content delivery) and SwiftServe (for media streaming).
AIMS rebrands in line with TIME Group expansion and regional plans.
The AIMS Group (AIMS), Southeast Asia’s leading carrier-neutral data services provider, today announces the rebranding of AIMS corporate identity to reflect its strong commitment on regional expansion and more comprehensive service portfolio with wider geographical coverage to better fulfil and exceed customers expectations.
As part of the rebranding, AIMS logo now sports TIME dotCom Berhads corporate colours, while the cube design expands in shape to reflect the companies aim to branch out in services and across the region. Together with the logo, AIMS now has a new tagline “Always Driven, Always Adaptable.”
AIMS Group Chief Executive Officer Chiew Kok Hin shares, “In the last few years, we have grown to be one of the leading credible datacentres in Malaysia. We began embarking on a regional presence in the last year and it is time for us to rebrand in line with our Group identity to strengthen our regional commitment and realign our culture and core values with TIME. As a Group, it was essential for us to redefine our brand to the identity of TIME if we are to achieve our goals of regional expansion.”
“Our new tagline best reflects the course AIMS has taken to grow to its current standing. We are always driven to be the best in the industry as our customers deserve only the best. The key to our success has been our ability to adapt to the ever changing technology landscape and demands of new trends like big data and Internet of Things (IoT),” he adds.
“Our aim continues to be focused on customer service better and more comprehensive offerings are in store for all in Malaysia and across the South East Asia region.”
“In the next few years we will be focusing on increasing our regional market share increasing our presence in more countries. We will also be focusing more into the enterprise space, offering a multitude of managed services and cloud. We have invested substantially into creating an ecosystem for our customers to leverage on be it services, storage, cloud or carriers,” adds Chiew.
AIMS has already established their presence in Thailand, Singapore and Vietnam. The company is expected to post double digit revenue growth of 20 percent in 2016, more than four times the targeted growth rate of their peers in the Malaysian data centre industry.
About AIMS Group of Companies (AIMS)
The AIMS Group (AIMS) is Malaysia and South East Asia leading carrier-neutral data centre operator and managed services provider. Located in the central business district of Kuala Lumpur and Cyberjaya, AIMS provides international class data storage facilities and ancillary services, augmented by an unrivalled platform for inter-connectivity; AIMS is one of the most interconnected sites in Malaysia and SEA. Besides its main datacentre in Menara AIMS, AIMS also operates datacentres in Cyberjaya, Johor, Singapore, Penang and Sabah. The AIMS Group was awarded the “Best Data Centre Engagement of The Year” by Outsourcing Malaysia in 2011, the Frost & Sullivan “Data Centre Services Provider of the Year” award in 2014, 2016 and Computerworld’s Infrastructure as a Service 2015 Award. For more information on AIMS, visit www.aims.com.my.
Malaysia’s internet traffic, which is continuing to increase rapidly, has hit a new high of 170 Gbps, according to the Malaysia Internet Exchange (MyIX), an initiative under the national regulator MCMC (Malaysian Communication and Multimedia Commission).
The findings were based on Internet data patterns recorded (up to August 2016) for Internet data that transversed (or “peered”) over the National Internet Exchange nodes, said MyIX Chairman, Chiew Kok Hin.
“The measurement is based on the highest peak internet traffic recorded on a particular day on a monthly basis,” said Chiew.
For August 2016, Internet data exchanged that “peered” over the National Internet Exchange nodes reached a new high point of 170.474 Gbps the highest ever recorded in the country’s history.
This latest figure reflects a year-on-year growth of 57 percent and Compounded Annual Growth Rate (CAGR) of 56.60 percent since 2012, he said.
“Throughout 2016, peak points for each month have exceeded the 100Gbps mark,” said Chiew. “This is not surprising given Malaysia current Internet landscape, which is driven by improved data plans, mobile Internet, video content, Cloud computing and not forgetting more companies agreeing to peer with MyIX. In 2016, we had five more companies joining the peering network.”
OTT content a game-changer
Chiew also said that as well as increased connectivity, the availability of more video. i.e. OTT content has been a game-changer for Malaysia.
“It’s not just about supplying data packages, there needs to be content as well and content is growing,” he said. “The growing availability and appeal of OTT players – such as Netflix, iFlix and online TV and radio channels – are certainly contributing to the exponential growth in internet traffic. These will continue to fuel the rise for the rest of 2016 and beyond.”
Chiew said MyIX also expected soon-to-be completed 1Malaysia People’s Cable System (SKR1M) in June 2017 will improve broadband capacity and contribute to more affordable and accessible high-speed broadband connectivity in Malaysia.
On a separate note, he said that MyIX will mark its 10th anniversary with a one-day Peering Forum, which will focus on the internet eco-system, its players, and best practices & policies.
“The Forum is an initiative by MyIX to active drive the development of the Internet eco-system for the country and to promote peering among players,” Chiew said. “Peering helps keep traffic local reducing the lag between connections while decreasing the inter-country connectivity costs. We encourage new peering partners to join MyIX to ensure a better Internet experience for the nation’s benefit.”
The Forum will be followed by a three-day workshop (October 11-13) on Network Security conducted by the Asia Pacific Network Information Centre (APNIC). APNIC is a not-for-profit regional Internet registry for the Asia Pacific region.
Modelled after the Amsterdam Internet Exchange and London Internet Exchange, MyIX (also known as “Persatuan Pengendali Internet Malaysia”) was established in 2006 with the cooperation of local Internet Service Providers (ISPs) to connect and exchange local Internet traffic.
MyIX’s infrastructure consists of 7 Internet Exchange nodes of which 5 were in Bayan Baru, Johor Bahru, Kuantan, Kuching and Kota Kinabalu. These add on to the MyIX nodes located in the Klang Valley at Menara Aik Hua (AIMS), and CSF 1 (Telekom Malaysia, Cyberjaya).
The two time award winner is living up to its name and reputation via new certifications and investments.
AIMS continues to thrive as Malaysia’s leading carrier neutral data centre operator and managed services provider, capitalising on its role as one of TIME dotcom Berhad’s most significant subsidiaries to enjoy a strong performance in 2015; achieving revenue growth of 20 percent to exceed the data centre industry average of 4.6 percent, according to Malaysia Digital Economy Corporation (MDeC) 2015 revenue statistics.
Beginning life in 1990, the business has had to diversify, adapt, transform and rebuild over its 25-year history to reach its current, internationally- renowned status. Overcoming competitive sectors and ever-changing market demands, it is in the arena of data centres where it has conquered and expanded from ultimately.
“AIMS offers state-of the art facilities for equipment housing with unparalleled connectivity options,” the company states. “Maintained round the clock by expert staff, our data centres are equipped to the highest industry standards, 24-hour security, clean agent fire suppression, robust cooling system and uninterruptible power supply (UPS) with back-up generators.”
Alongside its core data centre offering, exists an extensive range of managed IT services from procurement to the deployment of software and hardware, working closely alongside its ever-increasing range of international customers.
These customers benefit from AIMS’ turnkey services across cloud technologies, content delivery, disaster recovery and carrier management to achieve an all-under-one-roof offering which looks set to reach an even more widespread demographic of both carrier and enterprise customers in the future.
Healthy Growth
In mid-2015, the most recent change was seen among its target market, adding an enterprise element to the existing carrier demographic traditionally benefitting from the AIMS offering. With a 90 percent market saturation of the latter market in Malaysia, Chief Executive Officer (CEO), Chiew Kok Hin is confident that similar success could be replicated in the enterprise domain, albeit with a slightly altered service.
“We went into the enterprise market 18 months ago with the same commitment and expertise we have exercised within the carrier industry,” the CEO said. “In the past 18 months we have learnt a lot in terms of adjustments that we need to make for enterprise customers.
“We now have all the certifications needed to ensure we are able to meet their market and regulatory needs and this has resulted in a healthy growth in this segment.”
Looking forward, the enterprise sector is a key area in which AIMS intends to grow in the future, once again proving itself as a dynamic and proactive business in what is still a relatively young, but competitive data centre market.
Supported by its ongoing expertise in internet services and advanced technologies, as well as its continuous TIME dotcom backing, the business is in a better position than ever to also expand further internationally; the likes of Indonesia, Thailand, Vietnam and Myanmar all potential regions in which to replicate its success.
Chiew concluded: “This year, we will concentrate on embarking on these strategies and we have the necessary tools and resources to go deeper into the enterprise segment.
“The message we always want to send to customers across every segment is simple; we know what you need, just leave it in our hands.”
Acclaimed certification
The attainment of key certifications is exactly what’s occurred in the intervening 12 months, with Southeast Asia’s leading carrier-neutral data services provider recently announcing that it has achieved the international ISO/IEC 20000-1:2011 certification on IT Service Management System (ITSM) from the British Standards Institution (BSI).
Chiew reacted to the achievement: “The ISO/IEC 20000-1:2011 certification is a highly acclaimed certification for the data centre industry that encompasses our data centre operations, managed services and supporting functions.
“AIMS would like to take this opportunity to thank Malaysia Digital Economy Corporation (MDEC) for helping facilitate and subsidise this certification process that enables us to provide our customers with internationally certified business standards.”
ISO 20000 is a highly respected international IT Service Management standard that promotes an integrated process approach to effectively deliver services to meet business and customer requirements, and it is also the global de facto standard for IT Services.
The certification was awarded to AIMS after an extensive audit by BSI Services Malaysia, a leading certification body training and business improvement provider.
Uniquely capable
Following this certification, AIMS has also become the first data centre in Asia-Pacific to partner with Network Infrastructure Inventory Inc. (Ni2) to provide customers with IT Service Management (ITSM), Operational Support Systems (OSS), and Data Centre Infrastructure Management (DCIM) capabilities in one platform. “We chose Ni2 as they are the only vendor that is uniquely capable of offering ITSM-DCIM-OSS capabilities under one single platform. This is an important aspect for customers; especially in the financial, oil & gas and telecommunications sectors, who are looking to outsource their infrastructure and data centre facilities to companies like AIMS,” explains Chiew.
“With the Ni2 platform in place, AIMS will be able to provide faster and more efficient services for our customers. This investment is part of AIMS’ constant mission to provide a world- class service for our customers while continuing to deliver or even exceed our customers expected level of service.”
Customers can expect faster trouble shooting or automated trouble shooting, integrated monitoring, optimised infrastructure design for faster capacity delivery, improved customer experience and enhanced self-management capabilities on the customer portal as a consequence.
“We are very happy to have been chosen by AIMS as its ITSM-DCIM-OSS platform provider of choice. We are also very excited to partner with the fastest growing IT service provider in the APAC region,” says Joseph Hatchuel, Ni2 CEO.
Best service
Such certifications and service quality within the industry has often resulted in an award-winning culture across the business, and 2016 has been no different following the recent announcement of AIMS as this year’s “Data Centre Services Provider of the Year” by Frost & Sullivan. The Frost & Sullivan Malaysian Excellence Awards is held annually to recognise outstanding organisations in Malaysia who have exceeded their industry expectations and AIMS had won the same award in 2014.
The award places emphasis on areas such as leadership, technological innovation, customer service and strategic product development.
“We are honoured to once again be named Frost & Sullivan “Data Centre Services Provider of the Year”,” Chiew concludes. “This exemplifies AIMS commitment to provide the best service for its customers across the region.
“With our new investments and ISO/IEC 20000-1:2011 certification, AIMS is set to further enhance the standards of the data centre industry in Malaysia.”
The AIMS Group (AIMS), Southeast Asia’s leading carrier-neutral data services provider, today shares that according to experts, data centres will consume three times as much energy over the next decade and this rate of increase is a worrying trend for the local data centre industry as a whole.
In 2015 alone, worldwide data centres consumed over 416 Terawatt hours of electricity – which is significantly higher than the entire power electricity consumption of the United Kingdom of 300 Terawatt hours (Source: Britain’s foremost data centre expert, Ian Bitterlin).
Despite the advancements in server storage capacity and data centre cooling technologies, the amount of energy consumed by data centres accounting for about 2 percent of total greenhouse gas emissions; or roughly the same carbon footprint as the airline industry.
In reference to this worrying phenomenon, AIMS Group Chief Operating Officer Mohammad Azman says many are still unaware that power-hungry applications are the main culprit behind the enormous power consumption by data centres.
“Every Facebook “Like”, Instagram post, or Pokemon Go you play, or any Internet activity for that matter actually requires that a huge amount of data needs to be stored somewhere.”
Today the statistics show that that global data centres consume 3 per cent of the global electric supply. “And with the internet of things (IoT) set to bring in even more internet driven applications and innovations, energy consumption will increase exponentially in the very near future,” Azman says.
“What people don’t realise is that, as much as 50 percent of a data centres operating costs is contributed by power consumption to support both the IT and the Cooling power requirements. Over the last 3 years, AIMS has seen an over 20 percent increase in power consumption at our data centres alone,” he says, adding that the local data centre industry is in a conundrum at how to solve the power consumption crisis of high costs as well as outdated and inefficient power infrastructure.
Applications, the Power Drainers
As of June 2016, there were 2.2 million apps available for Android download while Apple stores came a close second with 2 million applications (Source: Statista). Apple also recently announced that a total of 130 billion applications have been downloaded from Apple stores globally between July 2008 to June 2016.
Azman, says, “More data means more business for data centres. In fact the hugely successful application industry is the No 1 driver for data centre businesses to thrive and continue to be in demand.”
However the massive explosion of applications has also been one of the driving contributors to the energy consumption of data centres and on personal devices.
The recent Pokemon Go worldwide frenzy saw over 100 million downloads of the application within a month of its launch. In that time, users have experienced crashes and mobile battery draining. Pokemon Go players have resorted to carrying extra power banks on their hunts.
While everyone knows these applications drain mobile battery power, how many people realise that these applications are also energy guzzlers for data centres?
Application developers are constantly looking at ways to develop apps that are fast and interactive. But what we don’t see is an emphasis on developing applications that consume less power. Application developers need to prioritise creating apps that are not power guzzlers.
“This is a serious point to note if the industry wants to continue to enjoy the advancement of technology and internet innovations in the future without further damaging the sustainability of the environment,” says Azman.
Taking a closer look at the ecosystem
While the Malaysian datacentre industry has been urging Tenaga Nasional Berhad (‘TNB’) to re-tariff the electricity classification for data centres, Azman believes there is much that can be done by the industry and its ecosystem.
“The hardware sector has seen massive innovation to address growing data and energy consumptions in the data centre industry. Equipment that are 8 to 15 years old are inefficient and would impact service levels ie. using more units of power than usual. But local players may not have the money to reinvest into these power equipment – this is something that all data centre players need to priorities,” says Azman.
“On our side, in the next two years AIMS will continue investing to make our data centres more energy efficient through new cooling technology and power distribution systems,” adds Azman.
Renewable energy and cooling measures are another key area that needs to be looked into.
He explains, “Today’s servers can run at much higher temperatures than the perceived average industry standards. Higher temperatures require less energy consumption, and the difference is substantial. Servers used to have to be kept at temperatures of 22 degrees celcius in order to ensure they don’t breakdown due to overheating. But server technology has seen much advancement and we can easily run server rooms at temperatures between 27-32 degree celcius.”
“Fact is that free night air on a cool night in Malaysia is actually enough to keep today’s servers cool, but the market is not yet ready to accept free air cooling instead of power hungry mechanical cooling in operation today. That’s where the industry needs to take a proactive measure to re-educate clients on the possibility of using higher temperatures in the data centre to reduce power consumption.”
While Malaysian Digital Economy Corporation (MDeC) has been at the forefront by conducting studies on this, it is us the data centre players that are key to push for market acceptance. AIMS is working closely with MDeC in re-educating clients. They recently held a forum with key players in various industries to share about recent developments in data centres including the raising of temperatures that is now possible with better technology.
“Unless we start looking into all these factors soon and make changes across the ecosystem, the data centre industry is going to be one of the key contributors to global warming.” ends Azman.
About AIMS Group of Companies (AIMS)
The AIMS Group (AIMS) is Malaysia and South East Asia’s leading carrier-neutral data centre operator and managed services provider. Located in the central business district of Kuala Lumpur and Cyberjaya, AIMS provides international class data storage facilities and ancillary services, augmented by an unrivalled platform for inter-connectivity; AIMS is one of the most interconnected sites in Malaysia and SEA. Besides its main datacentre in Menara AIMS, AIMS also operates datacentres in Cyberjaya, Johor, Singapore, Penang and Sabah. The AIMS Group was awarded the “Best Data Centre Engagement of The Year” by Outsourcing Malaysia in 2011, the Frost & Sullivan “Data Centre Services Provider of the Year” award in 2014, 2016 and Computerworld’s Infrastructure as a Service 2015 Award.
For all the growth we have seen in areas of social media, IT consumerisation and big data output, Malaysia’s data centre industry seems to have surprisingly very little of it, translated to actual business.
According to AIMS Group (AIMS) COO, Mohammad Azman Abdul Rahman, there are two conflicting trends in the market an explosion of data usage in Malaysia mainly because of the smartphones factor, but still very thin margins for local IT and data service providers.
This is a situation that may worsen in 18 to 24 months, and other issues currently afflicting the industry are drawing its attention away from the potential threats at its door.
Foreign players
Azman opined that the Malaysian government may be looking at the data centre landscape, in isolation instead holistically. “They don’t engage the local data centre industry players or try to find out the possible impact of their policies.”
For the past 2 years, Malaysia has been very vocal about aspiring to capture a part of the lucrative USD 10.9 billion data centre pie in Southeast Asia, and be the preferred destination for regional investors.
The reality of this has become more possible in recent years as go-to data centre destinations like Singapore and Hong Kong start to lose appeal.
One good example is of Iskandar in Johor being touted as a potential low-cost alternative to Singapore for foreign investors, what with incentives being offered by Malaysia and more. For quite some time, Singapore has been the regional hub when it comes to data centre players and connectivity. But rising cost and lack of data centre sites makes Singapore not as good a proposition as it used to be.
Azman opined that this fact is essentially opening the flood gates to a certain extent.
“The local players at this point of time are not in position to set up base in Iskandar, Johor. The money is just not there, they are not earning enough. And banks are reluctant because of the state of things, to start financing local data centres’ expansion into Iskandar,” he shared.
Not only is there lack of resources to compete with bigger international data centre players and prevent them from taking over their turf, the local industry on the whole is actually just struggling to survive.
Money (and more) to grow to maturity
The Malaysian Data Centre Alliance (MDCA) which launched last year, have identified main areas to work on as an industry. “Some of the things we are trying to address as an industry today, are just utility challenges like power and the rising cost of power,” described Azman.
There is a common industry voice now with MDCA, but he opined much more needs to be addressed if Malaysia’s local industry is to not only survive but compete and thrive.
Azman summed up the local competitiveness against competition that is coming from beyond our borders.
“If you look at the local DC industry, it is very much more into the physical infrastructure side of the business. Whereas companies like Google have moved up the layers to offer value add like services and applications.”
As services like Amazon Web Services (AWS) start to make their offerings available via cloud computing, customers would have choice of going to the web services layer, for example with AWS based in Singapore, instead of running their own services and infrastructure from local data centres.
Azman said, “We haven’t reached that level of maturity (to offer web services) yet. We are still just struggling with space, power, and connectivity!”
One can of worms – almost Snowden-esque proportions
Malaysian businesses turning towards foreign data centre service providers also opens a can of worms with regards to where they should be hosting their data in the first place. Regulated industries like financial services are mandated to keep data in the country.
But what is the minimum due diligence from other local industries when it comes to hosting data outside of the country?
Azman posed the hypothetical question, “Do I (as a local business) host my data in a local jurisdiction, where I know what the regulatory frameworks and policies are? Or do I take the risk with AWS for example, where I don’t know where my data is really being hosted, or who has access to it?
“I would like the local government to take a standpoint and say, for example “Hey Malaysian companies, you are not allowed to host personal data about Malaysian citizens or nation-sensitive data, overseas where we will have no control over what happens to it!” he said, while also citing the example of Brazil’s Ëœoutrage’ over NSA spying on its president, her inner circle and Brazil’s national oil company, Petrobras.
This was to extent that Brazil now plans to isolate its Brazil-Europe network from United States’ ˜jurisdictions’, via a USD185 million subsea cable.
Azman pointed out Malaysia’s slippery slope scenario, that once our sensitive data leaves our borders, we essentially give up our right and control over that data.
“Depending on where it is hosted, we are also exposed to that country’s regulation and law. So, if we don’t set up policies and frameworks about how data is stored and transmitted, we are opening ourselves up to business risk as well,†he said, adding that Malaysia’s Personal Data Protection Act (PDPA) is not comprehensive enough and does not cover how data should be handled outside our borders.
Data classification and privacy are just two concerns in a long list that needs more industry attention, thorough dialogue and action.
Electricity
The 15 percent increase in electricity tariffs this year, couldn’t have come at a worse time.
“The announcement came late last year, and its execution 2 months after that, had immediate impact on our business,†shared Azman. “When you are a data centre with over 600 customers, you need more than 2 months’ notice to pass through those costs (to customers).â€
This is due to electricity making up a whopping 40 percent of total cost of data centre services.
Margins which could be used to grow the business by moving up the value chain or expanding, takes a hit.
“We were just learning to walk and got pushed over, in essence. That’s what the MDCA is struggling with right now.â€
The industry understands the need to revert back to market-based or non-subsidised electricity pricing, but Azman described the way it was implemented as “¦an extremely hard punch to take.â€
The inevitable visible impact on margins could also cause shareholders to ask the very hard question of whether the local data centre business, in the longer term, is going to be a viable business to invest in, given all the potential threats in the horizon.
This is a shame as local data centres should be viewed as a vital sector of the economy, opined Azman.
Azman shared, “From our point of view, this (data centres) is the digital economy. Data is being produced and manufactured out of our data centres.
“A lot of incentives are being given to traditional manufacturing, so they do have a lower tariff class for electricity. That’s what we are looking for, as an industry. We are the new manufacturers. Put us in the tariff class of the traditional manufacturer!â€
Slowly choking to death
Also, why should Malaysian data have to leave our shores when we have a working data centre industry?
According to Azman, because of Entry Point Project 3 (EPP3) which has national interests around the local data centre industry, “..we are being asked to make investments in this area.
“But we can’t continue making these sorts of investments without some considerations of the threats to our business, which is foreign service providers coming in (physically or via cloud services) and absolutely commoditising our service offerings, before we even have the chance to regain our investments.â€
To compound the matter, our government views these service providers as opportunities and are crafting all sorts of incentives like tax and electricity, for them.
“These incentives are not available to the local players, by the way,†Azman pointed out.
With Singapore becoming a less preferred destination, these incentives for foreign players could cause real and huge impact on Malaysia’s local data centre industry within the next 2 years.
The shape of things to come
It’s not all doom and gloom. Local DC players are slowly starting to move up the value chain in terms of types of services and cloud for example.
Azman opined that incentives are there, but they are not good enough.
“Competition (from foreign players) is good to push us to another level of innovation, and maybe consolidation because the strongest will survive. Ultimately the nation does want the consumer to benefit.â€
According to Azman, despite this, the ˜powers that be’ need to have a thought for the other side of the coin.
“(They should) talk to all the stakeholders about what is the bad effect of foreign investors hosting massive facilities in Iskandar, for example. (They should ask) ˜What impact will that have on local businesses, businesses who have invested some millions in this space ? When we ask them to do so, what is the impact on their business?’
Unfortunately, Azman has observed that this all-important dialogue is not taking place with the government or even amongst industry players yet.
~ Interview by Cat Yong. Published in Enterprise News IT. June 3, 2014.~
April 28, 16, Malaysia – Following TCCT’s winning of “2016 Frost & Sullivans Thailand Data Center Hosting Service Provider of the Year”, TCCT would like to congratulate AIMS, our Malaysian strategic partner, for winning the award “2016 Frost & Sullivans Malaysia Data Center Service Provider of the Year”. The AIMS Group of Companies or AIMS is Malaysia and South East Asia’s leading provider of premium carrier neutral data center and managed services and also a member of Asia Data Center Alliance (ADCA).
“TCCT is proud of our strategic partner on its devotion to data center industry and service provisioning. As part of Asia Data Center Alliance founding members, AIMS and TCCT will continue to leverage data center standard and quality for countries in Southeast Asia”, said Waleeporn Sayasit, Corporate Marketing Director of T.C.C. Technology Co., Ltd. or TCCT.
The InterDC Network is an ultra-broadband backbone interconnecting key data centres
CYBERJAYA, 6 April, 2015 – AIMS Cyberjaya Sdn Bhd (AIMS) has been appointed by Multimedia Development Corporation (MDeC) through an open tender to lead and deliver the ‘Inter-Data Centre (DC) Network initiative’. This initiative is aimed at mitigating the high cost of bandwidth faced by Malaysian data centres by deploying an ultra-broadband backbone network interconnecting participating data centres within Cyberjaya. AIMS will be responsible for the deployment, configuration, monitoring and support of the network services and operations.
The InterDC Network initiative was conceived from the inputs by local data centre players in a series of engagements and consultations organized by the Malaysian Data Centre Alliance (MDCA) and facilitated by MDeC to bring down the cost of data centre operations.
Recently, IDC Researchs study on the total cost of doing business for data centre providers in 15 countries revealed that on average, Malaysian data centres spend between 20-25 percent of their operational cost on bandwidth; as compared to less than 5 percent in Singapore, Hong Kong, Japan, UK and the USA.
Bandwidth cost comprises of local and international components. Malaysia has challenges in both domestic and international connectivity which leads to relatively higher costs than Singapore and Hong Kong which are the regions recognized data centre hubs.
Wan Murdani Wan Mohamad, Director, Digital Enablement Division of MDeC says, “While our overall Global Data Centre Risk ranking is 16, Malaysia is ranked No.28 (out of the top 30 nations) when it comes to international connectivity (Cushman & Wakefield, 2013), which further highlights the high international bandwidth cost. New submarine cables are expected to be in service by Q2 of 2016 and it will address the international component of the cost but the domestic aspect needs to be equally addressed.”
“Domestically, the current level of competition in the market is not big enough to significantly reduce the bandwidth cost within Malaysia. This is why we are looking at ways to bring down the cost of bandwidth for the benefit of local data centre service providers to create a competitive ecosystem that attracts digital content and services players to serve the region using Malaysia as a base.”
As part of the Economic Transformation Programme (ETP), the data centre industry has been identified as one of the key economic growth areas. An initiative was introduced, known as the Entry Point Project (EPP3) under the Business Services National Key Economic Area (NKEA) to position Malaysia as a Data Centre hub, where MDeC was mandated as the lead agency to drive this initiative.
The initial phase of the Inter-DC Network initiative will leverage existing dark (unused) optical fibre infrastructure available in Cyberjaya to interconnect with participating data centres based there. Wan Murdani explains, “By aggregating all of their traffic, we will be able to drastically reduce the bandwidth cost through bulk purchase as typically 10 Gbps is 4 times cheaper that 1 Gbps on a per megabit basis.
“Typically dark fibre is based on a CAPEX investment model with a long term lease which enables the maximum utilisation of the fibre capacity specifically for large bandwidth applications. Usually with dark fibre, cost does not escalate with an increase in bandwidth usage. This is another way where cost savings will be realised.
“High-bandwidth data centres are a pre-requisite for Cloud, the Internet of Things and Big Data applications; and this Inter-DC Network at Cyberjaya will enable participating data centres to offer competitive prices in offering such services.”
Currently there are more than 20 data centres based in Cyberjaya, and ultimately the Inter-DC Network will facilitate the creation of a highly connected data centre hub that will attract further investments in this sector.
The Inter-DC Network initiative has been modelled after the highly successful Malaysian Internet Exchange (MyIX), which has successfully played a part in significantly reducing the cost of domestic bandwidth connectivity through the concept of aggregation nodes and co-location of network points of presence (POPs) for internet service providers. In addition there can be a synergy between these two initiatives which can be enhanced by interconnecting these two networks. Initial steps to do this have already been started and accepted by both MyIX and the Malaysian Data Centre Alliance (MDCA) members.
“MDeC believes that AIMS track record of successfully managing one of three key infrastructure nodes of MyIX, and their understanding of running a collective (data centre) industry business model will be an added advantage to this initiative.”
“Further to this, AIMS will also work with their partners who already have existing fibre infrastructures in Cyberjaya, which will enable them to complete this project in a shorter time frame, targeted to be operational by end of Q3 2015”, adds Wan Murdani.
AIMS will also act as a neutral party in ensuring the collective growth of the industry.
AIMS Group Chief Executive Officer Chiew Kok Hin says that the AIMS Groups strong carrier neutrality factor additionally gives the connecting data centres the flexibility of choosing their bandwidth provider, to offer their service provider clients more options to reach out to their end customers.
“AIMS is committed to the criteria set by MDeC including the 99.9 percent availability as per the MSC Performance Standards, high scalability to multiple terabits of capacity, high security focus and the ability to deploy the project in a short time by being centred in Cyberjaya where optical fibre is readily available.”
“We are honoured to be part of this exciting project that is set to revolutionise the data centre industry in Malaysia. By reducing our operational costs, data centres will be able to attract a higher number of investors looking to host their data in Malaysia and the ASEAN region.”
“Through the set-up of a common bandwidth infrastructure as purported by this Inter-DC Network, the local DC industry is given a booster to thrive.”
Wan Murdani shares that MDeC envisages a similar model to be extended beyond Cyberjaya in the future. “As far as this initiative is concerned, MDeC will oversee the initial three years of implementation and growth before handing over the project to industry stakeholders, by the fourth year of this initiative.”