Jan. 9, 2017
Image (IDG) - Clouds
In conjunction with Computerworld Malaysia's extensive roundup ('What's really in store for Malaysia's IT industry in 2017?'), we invited Telekom Malaysia's IT services arm VADS to report on current customer sentiment for their digital transformation plans for 2017.
Mahmoud Dasser (pic below), VADS' Vice President for Partnership and Marketing, also includes a comment on Vision 2020 (the government's ambition to achieve developed nation status by the year 2020.)
What is currently driving the move to cloud computing in Malaysia?
Through our engagement with customers, especially the C-Levels, we find that a majority of them have common interests and priorities to drive their digital transformation journey.
They place great emphasis on customer experience, business agility and extended ecosystem of partnerships. They believe this allows them to have a direct and significant impact on customers' relationship on its various touch points.
Hence we notice that majority of CXOs place laser focus attention on:
1) Cost savings and efficiency
2) Business agility and Speed to Market
3) New innovation to digital business
4) Compliance of regulations
These priorities are in tandem with the digitalisation wave and customers experience trend; in which to many are aspirations.
In this regard, Cloud Services are perceived as a key enabler and accelerator for this digital transformation. Consequently, this is well supported by research studies from firms like IDC that predicts the adoption of Private Cloud and Hosted Private Cloud are expected to grow at 40.7 percent; compared to a moderate rate of 15.3 percent for Public Cloud. This is in reference to the CAGR of 2014-2019.
How does this vary across different segments and sectors?
The cloud adoption indeed varies by industries and market segments. For example, industries with high regulations and governance like Financial Services, Public Education and Healthcare will require local data residency. Hence for these industries the only available options are Private Cloud or Hosted Private Cloud. While the first option can meet their requirement, it is not cost effectiveness since they lack the economies of scale and the availability of required skills that Hosted Private Cloud can offer.
The CEOs in regulated industries need to find the equilibrium of tightening the cost to serve, while fulfilling stringent regulations by respective governing bodies. As a result, many companies focus their core business; and leave it to service providers like VADS to manage the non-core business.
In the long run, they could redirect the potential 30 -40 percent savings of funds into new innovations and investments that directly impact their top line business.
As for non- regulated industries like the traditional brick and mortar of Retail, Manufacturing and business services, the adoption of cloud suite is slower.
Some are sceptical in embarking onto this new business model and are constantly on captive mode- adopting yet not adopting. Perhaps, the shallow ICT skill sets preclude the utilisation of the services in their day-to-day operations.
Therefore, the ICT industry including VADS takes the onus on creating awareness, educating and nurturing the ICT skills to expedite the Enterprise Cloud adoption in the next three to five years.
What is the long term outlook for transformation?
The adoption of cloud technology will definitely accelerate as these industries are set to sail more aggressively on digital transformation journey to enhance their portfolio of products, business processes and customer experience.
On the other extreme we find out that the "born in the Cloud" companies and digital disruptors industries such as the eCommerce, shared economy companies, Fintech business or low cost airlines industries are faster adaptors of the public cloud. Some of them went extra miles by having a "Cloud Only" strategy, i.e. everything they do, consume and develop are on the public cloud.
This indeed gives such companies a massive advantage over the traditional or legacy companies in terms of business agility, cost efficiencies and scalability of the business. The mushrooming eCommerce or shared economy business requires a local public marketplace where all apps are towered under one umbrella with one stop shop and local support.
This convenience; together with the Government's Rancangan Malaysia Ke-11 initiative are the catalysts for SMEs to adopt ICT and Digital Economy in no time.
Finally, what is your take on Digital Malaysia?
It is important to note yet another trend towards shared cloud services or community cloud services to serve the needs of specific group of companies hosted in the country.