The rise of data centres is pushing demand for cloud services, says ISG report

Singapore and Malaysia's markets for private and hybrid cloud services are continuing to grow, attributed to the rise in providers’ investments in data centres across the region, according to a new report by Information Services Group (ISG).

The 2023 ISG private and hybrid cloud data centre services report for Singapore and Malaysia found that the rising enterprise demand for computing resources, particularly green data centres and hyperscale capabilities, is responsible for driving data centre expansion and modernisation. ISG’s principal consultant technology modernisation, Ben Rossiter, said that strong investments are turning Singapore and Malaysia into world-class data centre services markets. “We expect providers to keep expanding managed hosting capacity,” he explained.

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The report highlighted that enterprises in the region seek data centre services to meet growing needs for security, sustainability, edge computing, customisation and compliance. As a result, many are turning to services using artificial intelligence, machine learning and automation to address challenges related to rising costs and skilled labour shortages, which are expected to persist beyond the end of the decade.

ISG added that Singapore and Malaysia are separate markets but similar in terms of the technologies which meet typical clients’ needs.

On the sustainability front, the report noted that enterprises are also accelerating their sustainability efforts in response to government and private-sector initiatives, especially in Singapore. "Data centre strategies are often at the heart of these efforts, with companies shifting to greener locations, energy sources and management systems even faster than expected in 2022," the report stated. 

Additionally, other cloud trends that can be recognised in Singapore and Malaysia, include the need for skills development across the region and the growing popularity of data-centre-in-a-box offerings.

Malaysia has also been making strides in importing tech giants to its shores. Most recently, Amazon Web Services, subsidiary of Amazon.com that provides on-demand cloud computing platforms, obtained a green light to set up shop in the country.

The launch aims to give developers, start-ups, entrepreneurs, and enterprises, as well as government, education, and non-profit organisations a greater choice for running their applications and serving end users from data centres located in Malaysia. In a statement to the press, AWS’ commitment includes a plan to invest approximately RM 25.5 billion in Malaysia by 2037.

Malaysian PM Anwar Ibrahim said: "AWS has committed to the largest international technology investment to date in Malaysia, which will advance our Malaysia Madani vision of a highly skilled, innovative, prosperous, and sustainable economy,” he said. Additionally, he said that launching AWS in Malaysia is a vote of support for Malaysia's leadership in the global digital economy.

Trusted signature Malaysian brands such as PayNet, PETRONAS, CelcomDigi, Pos Malaysia and TNB are working with AWS. The new AWS Region will provide customers with data residency preferences to help store data securely in Malaysia.

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