Malaysia Digital Economy Blueprint (MyDIGITAL): Key Takeaways for the Local Enterprise ICT Market

A. Amir

Summary Bullets:

  • The Malaysia Digital Economy Blueprint, MyDIGITAL, addresses key gaps across different key technology stacks such as cloud, 5G, and cybersecurity.
  • The initiative will accelerate digital transformation in the country; promote wider collaborations between vendors, service providers, and enterprises; and drive the enterprise ICT market.

The Malaysian government launched the country’s digital economy blueprint, called MyDIGITAL, which provides a comprehensive 104-page plan to accelerate the usage and adoption of technologies across the public sector, enterprises, SMBs, and consumers. While there are several other digital initiatives in the country (e.g., Jendela, National Fiberisation and Connectivity Plan [NFCP], National Policy on Industry 4.0, National 5G Taskforce, Public Sector ICT Strategic Plan, and many more), MyDIGITAL outlines thorough plans with timelines and expected outcomes that glue all the other initiatives to drive the country’s economy through digital technologies. The next section discusses several key takeaways for the local enterprise ICT market.

5G Is Finally Coming This Year: The 5G availability dates in Malaysia have been pushed back several times from Q1 2020 to H2 2020 and then to 2022 (as announced by the government in September 2020). Today, the date has been moved again, as stated in MyDIGITAL. 5G will be available in the country by the end of this year. It is a rather late but critical move for the country considering the maturing ecosystem (e.g., more features such as standalone [SA] 5G and network slicing are commercially ready, and most new devices coming to the market are already 5G capable) and wide deployments in the region including Singapore, Thailand, and the Philippines. The local telcos such as Celcom, Digi, Maxis, and TM have been preparing for the technology for some time and are expected to launch 5G services shortly after the spectrum is ready. With various initiatives that have been taking place since 2019 driven by the National 5G Taskforce, the commercial availability of technology is also expected to drive wider collaborations between telcos, tech vendors, and enterprises to develop new 5G use cases. The government could also consider awarding mmWave for applications such as edge computing and private networking.

Hyperscalers Are Now Allowed to Open New Regions in the Country: Another key initiative in MyDIGITAL is to allow hyperscalers (i.e., AWS, Microsoft, Google) to build and manage their data centers in the country. Prior to the announcement, the hyperscalers have been operating in the country for many years but without having local data centers (a.k.a. regions). And at the same time, the government has also been attracting global cloud providers to open their facilities in the country to address the data residency demand of local enterprises. While the global hyperscalers are aggressively expanding their presence both worldwide and within the region (e.g., Google and AWS’s new regions in Jakarta, Indonesia; AWS’s edge location in Thailand), opening new facilities in Malaysia may not be part of their short to mid-term plan. These hyperscalers already have edge locations in the country and established regions in Singapore, within only a few hundred kilometers of Klang Valley (Malaysia’s capital cities). They also have wide ecosystem partners including data center providers in the country that can offer cloud services through private facilities (e.g., AWS Outposts, Azure Edge Zones, Google Anthos) to address data sovereignty needs and low-latency applications. Nevertheless, with the government’s push on both the supply and demand sides, the hyperscalers are expected to increase their initiatives in the country (e.g., further expand the partner ecosystem to strengthen GTM, more collaborations with local enterprises, etc.) to drive cloud adoption and capture the growing market opportunity.

Strong Push in the Government Cloud: Besides the initiative to attract more global players into the country, MyDIGITAL will also drive cloud adoption, especially in the public sector. One of the targets is to achieve 80% of cloud usage across the government in 2022 through its ‘Cloud First’ strategy. MyDIGITAL also further empowers the Malaysian Administrative Modernization and Management Planning Unit (MAMPU) to expand its role to drive digital transformation in the public sector from cloud to a wider range of technologies. This initiative will drive demand for cloud infrastructure and professional services (e.g., application development, migration), thus promoting wider collaboration with the local players such as system integrators. Cloud adoption in the public sector will also set an example to other private companies to consider the technology. For example, the Singapore government has been successful in driving the country’s cloud adoption through internal adoption as well as various proactive policies.

Increasing Cybersecurity Adoption: Following an RM 1.8 billion Malaysia Cyber Security Strategy launched by the National Cyber Security Agency (NACSA) in October 2020, MyDIGITAL outlines several initiatives to further drive cybersecurity adoption across different sectors – the government, large enterprises, and SMBs. Apart from enhancing existing SME incentives to include cybersecurity, the blueprint also covers plans to increase awareness, strengthen law enforcement, and develop 20,000 cybersecurity experts by 2025. Malaysian enterprises, including the government, are widely digitalizing their business processes and assets as well as migrating workloads from on-premises to third-party locations such as public cloud. There is also a surge in online transactions such as e-commerce and digital payments. These transformations could result in new vulnerabilities and pose bigger cybersecurity risks. The cybersecurity initiatives of MyDIGITAL will provide a platform for the Malaysian government and enterprises to equip themselves with better protections to counter the growing threats. This initiative will also push managed security service providers in Malaysia to further improve their portfolio capabilities, such as expanding ecosystem partners to develop solutions that cater to wider business requirements; adopting new technologies such as AI, SASE, and DevSecOps to strengthen enterprises protections from next-gen threats; and enhancing their security operation centers (SOCs) to support higher and more complex demands.

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