Malaysia Enterprise Telecom Update Q2 2021: Major Cloud Developments

Alfie Amir
A. Amir

Summary Bullets:

  • Microsoft’s move to open new data centers in Malaysia will drive cloud adoption and may attract other hyperscalers to build facilities in the country.
  • Domestic telcos are expanding their cloud capabilities through partnerships and acquisitions to address the high-growth market.

This report discusses major enterprise telecom events based on announcements from industry players in the recent quarter.  For more on the previous update, please see Malaysian Telecom Update Q1 2021 (April 29, 2021).

1. Microsoft’s Plan to Open Data Centers in Malaysia: Microsoft announced plans to strengthen its regional presence by establishing new data centers in Malaysia, adding 1 million skilled local professionals, and forming the MyDigital Alliance Leadership Council to collaborate on cloud-first and digital-native policy recommendations.

The impact is high on the domestic cloud market.  With a strong foothold in the country, Microsoft’s new in-country facilities – combined with its wider ecosystem partners and stronger presence – will further accelerate cloud adoption in the country.  With Azure Edge Zones, Microsoft can also provide edge computing solutions to address low-latency applications and data residency requirements, especially from enterprises with highly regulated verticals such as banks, financial institutions, and government agencies.  This move may also attract other hyperscalers such as AWS and Google Cloud to open their facilities in the country, increase focus on their on-premises products in market, or drive more cross-Johor Strait sales from their Singapore facilities.

For local cloud service providers, Microsoft’s new facilities will be a significant threat to their in-house public cloud business.  Enterprises will have an option to migrate their workload to Azure, which offers a wider range of services capabilities.  The wider ecosystem program will also enhance the capabilities of many local cloud providers and attract new players, increasing the competition.

For more, please see Microsoft Gains a Competitive Advantage Against AWS and Google in Malaysia with New Data Centers (April 20, 2021).

2. Axiata Partnered with Google to Offer Google Workplace: Axiata Enterprises is partnering with Google Cloud to offer Google Workspace to SMBs across its footprints.  Celcom plans to launch the service in Malaysia in the second half of this year.

The impact on the market is low.  While Google Workspace is gaining traction, there is a lack of differentiation for Celcom as there are many other providers that offer Google Workspace solutions.  SMBs also usually prefer DIY deployment and would tend to subscribe to the service directly from Google.

For Celcom, it could consider leveraging Google Cloud’s capabilities to expand its cloud offerings.  This includes offering Google Cloud services such as IaaS, private cloud/on-premises  (Anthos), and edge computing as well as strengthening professional service capabilities with application development and multi-cloud services.  Other providers should see this as a threat, especially in the SMB segment, and consider partnering with Google to offer similar solutions to address the growing demand or counter Celcom with competing solutions such as Microsoft Office 365.

For more, please see Axiata Enterprise Partners with Google to Offer Google Workspace to SMBs (June 18, 2021).

3. Maxis Acquired Peering One to Strengthen Its Private and Hybrid Cloud Capabilities: Maxis acquired Peering One, a Malaysian-based cloud solutions company specializing in hybrid and private cloud managed services.  The added capabilities put Maxis in a stronger market position as an end-to-end cloud solutions provider.

The impact on the Malaysia cloud market is high because the demand for private and hybrid cloud is increasing in the country, especially from enterprises with strict data hosting requirements.  Peering One’s capabilities in cloud security and professional services also enable Maxis to address the growing market needs in cybersecurity, migration, and application modernization services, as enterprises are migrating more workloads from on-premises to cloud.

For Maxis, the added capabilities expand its cloud portfolio to offer end-to-end solutions from data center to private, hybrid, public, and multi-cloud solutions . It enables Maxis to target wider market segments and compete with larger players such as TM ONE and other local and global system integrators.  Professional service has become one of the most important criteria for enterprises when considering cloud services.  Other domestic providers should continue to strengthen their cloud service capabilities through partnerships or acquisitions.

For more, please see Maxis Acquires Peering One to Enhance Its Hybrid and Multicloud Capabilities (July 16, 2021).

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