Solving Asia’s datacentre dichotomy: Interview with AIMS CEO

datacentre dichotomy
Image by monsitj | Bigstockphoto

When addressing the challenges and opportunities for the datacentre industry in Asia, industry pundits regularly point to the sector’s role in paving the digital transformation road.

More than 70 years ago, the creation in 1946 of the first programmable general-purpose electronic digital computer, Electronic Numerical Integrator and Computer (ENIAC), marked both the genesis of digital transformation as well as the emergence of various fears and concerns.

Industry leaders have since discussed this dichotomy in the digital revolution: between fear and willingness to unlock the positive disruption to business and society that digital transformation heralds.

In this Disruptive.Asia interview, Chiew Kok Hin, chief executive officer of AIMS Group, addresses many of these concerns in a conversation centred on current challenges and opportunities for datacentres in Asia, especially with the Covid-19 context.

Chiew Kok Hin

As one of the datacentre pioneers of Southeast Asia, AIMS has nearly 30 years of experience designing, building and operating premier datacentres in the Southeast Asian region.

Headquartered in Malaysia, AIMS forms the Malaysia Internet Exchange’s anchor site (MyIX), hosting all domestic and more than 80% of foreign telecommunication companies in the country. AIMS has interlinked datacentres in Thailand, Vietnam, Cambodia and Singapore to provide international businesses with local access to end customers in Southeast Asia.

As a subsidiary of fibre broadband provider TIME dotcom Berhad (TIME), AIMS’service portfolio has expanded further to embrace connectivity via submarine and terrestrial cables covering the ASEAN region. This has further strengthened its value proposition, especially targeting carriers and OTT players looking for a comprehensive portfolio of services ranging across connectivity, datacentres and managed services.

“Ever since the Covid-19 outbreak followed by the Movement Control Order in March 2020, Malaysia’s digitalisation efforts have accelerated more than expected,” Chiew said.

“Consumers and businesses, especially small and medium enterprises (SMEs) have swiftly moved most of their business operations online as part of their mitigation plan against restrictions imposed in curbing the spread of Covid-19. We predict this shift will likely become a permanent means of conducting business due to its advantage of being convenient and efficient.”

“Given the current circumstances, the Internet has become an essential service to facilitate the shift to remote working, increase in online buying behaviour and online learning,” he continued.

This surge in demand for connectivity is straining networks, stretching the limits of VPNs and increasing the need for collaboration tools.

“As a result, these factors have elevated the importance of datacentres as well as cloud computing,” Chiew said, noting that various forms of cloud constitute building blocks of digitalisation, which coupled with connectivity, enable the value-generation from data – the principal currency of the digital world.

Cloud first

And as the cloud is deemed a solution for everything from cost management to performance, flexibility, durability, and simplicity, the digital transformation roadmap during this pandemic has amplified demand for effective cloud computing solutions from datacentres.

Malaysia’s recently refreshed digital economy blueprint – MyDIGITAL – accords much priority to cloud computing and, of course, datacentres. Phase 1 of which will focus on strengthening the foundation to drive digital adoption through hyper-scale data centres. Conditional approvals have been given to four cloud service providers (CSPs) to establish hyper-scale datacentres in Malaysia over the next five years: Microsoft, Google, Amazon and the Telekom Malaysia Group. The CSPs will invest between RM12 to RM15 billion [USD2.95 to USD3.7 billion] during the next five years.

Indeed, in his MyDIGITAL comments, Ahmad Taufek Omar, executive Vice President and CEO of TM ONE, TM’s enterprise digital solutions arm, emphasises the importance of the cloud as Malaysia’s technology foundation as a digital nation.

Reflecting this, Chiew said: “We expect pandemic-driven investment in IT infrastructure to continue and expand as the datacentre industry strives to deliver more secure, reliable and efficient infrastructure and solutions to secure sustainable recovery paths and keep up with the accelerated digital transformation efforts.”

 As the world makes this online and cloud migration more permanent, AIMS anticipates widespread acceptance of the datacentre as a digital economy hub, supporting increased reliance on telemedicine and health, enhanced eCommerce, and global telecommunications and mass media.

Datacentre dichotomy

Pondering the question of challenges for Southeast Asia’s datacentre industry, Chiew first quickly enumerated the region’s strengths.

One of the mentioned factoids is that Southeast Asia has been the focus for its emerging datacentre market for the past few years; Cushman & Wakefield’s report that the Southeast Datacentre market expects a compounded annual growth rate (CAGR) of 13% during the 2019-2014 period with the Asia Pacific region’s rapid growth could generate a total market size of USD28 billion.

Turning to the challenges, Chiew starts with a comment that the climate change challenge facing data centres “is not merely to become ‘greener’. Extreme weather patterns have a grave effect on facilities worldwide, posing many issues for servers, critical power and cooling infrastructure. Should these not be mitigated ahead of time, providers and operators risk huge costs and reputational damage from downtime or construction delays.”

Datacentre operators need to be smart about how they tackle these challenges, not just from the perspective of managing and efficiently using energy but also from the kinds of technology that they deploy to continue efficient consumption of energy even as the load on datacentres grow in tandem with their business.

“Configuring a combination of different technologies affect power usage for IT load and cooling. Once a datacentre is able to lower its energy consumption, this, in turn, reduces its Power Usage Effectiveness (PUE) score and its implications to the environment. International customers, in particular, take this into great consideration in their tender evaluation for business and environmental responsibility,” he explained.

 Apart from climate change, he lists further challenges that datacentres need to consider if they are to be sustainable.

Laws and Regulations

  • As each country has its own set of laws and regulations governing its datacentre industry, what is applicable in Malaysia could be significantly different from regulatory requirements in other countries. This presents a challenge for foreign companies intending to expand their presence to other territories that may have rules to protect local companies.
  • This needs to be balanced against foreign investment’s potential advantages, such as capital injection into the economy and knowledge transfer. Foreign companies must ascertain avenues to align their business within the countries’ jurisdiction when planning their expansion scenarios.

He explains that: “An example to illustrate the differences in laws and regulations is the treatment of data privacy. As machines, equipment, devices and platforms are increasingly being networked to communicate with each other, the topic of data privacy and data sovereignty has become an important one.”

“The development of data protection regulation in ASEAN has so far been uneven. Until recently, Singapore, Malaysia and the Philippines were the only countries with personal data protection laws. The latest ASEAN country to enact data protection laws is Thailand, with the Parliament passing the Personal Data Protection Act in early 2019. Indonesia has been mulling over a draft legislation which has yet to make its way through the legislative process.”

“It is imperative that datacentre operators stay on top of development to the laws and regulations in countries that they are present in and are able to localise their operations for compliance,” he said.


  • Even though datacentres have considerable potential to expand and tap opportunities presented by accelerated digital transformation initiatives across ASEAN, the data centre industry is still relatively at an infancy stage in most ASEAN countries, and operators often face significant local talent and skills gaps.  Sourcing required skills and talents and skills is an ongoing challenge, exacerbated by the datacentre industry’s need for specialised skillsets (e.g. Certified Data Centre Professionals).
  • Sourcing the right talent is one part of the equation; the other is the challenge of retention: Due to the increasing workloads arising from the accelerated pace of digital transformation, talent retention is becoming a major new challenge for datacentre operators.

“While outsourcing is an option, the process of bringing in hired talent can be complicated as it involves policies and permits. This has been amplified by the restrictions imposed as a result of the Covid-19 pandemic, which has caused a significant delay,” added Chiew.

Pricing Schemes

  • Each country administers its own pricing metrics relating to services offered to customers. This is a key factor determining how price/cost is measured, accounted for, and distributed between different service layers in order to remain competitive.

Local market sentiment and business culture impacts pricing schemes and could add to an operator’s challenge, explained Chiew: “The dilemma to either follow local pricing scheme, a company’s standard scheme or balancing between both is a main concern to be addressed. The challenge lies in how providers can minimise price deviation to keep the pricing schemes as standardised as possible across its businesses.”

Reimagining the future

Speaking of his outlook for 2021 in the region for the datacentre industry, Chiew sees the year as a watershed moment.

“2021 is becoming the year of economic and health recovery with ‘normal life’ expected to resume as vaccination programs are gradually being implemented globally. Businesses that have gone digital or invested more heavily to digitalise their businesses and processes are unlikely to go back to the ‘brick and mortar’ way of doing things. Hence, 2021 will only see the need for datacentres continue to grow, directly or indirectly,” he explained.

Looking at his own group, Chiew said: “AIMS has always been a carrier-neutral ecosystem player since its establishment. We foresee the need for co-location services complemented by a comprehensive domestic and international connectivity, as a total solution so customers can avoid the hassle of engaging multiple service providers.”

With the slowly maturing business environment, technology and resources, local businesses and global players are flooding the market with tremendous technological demand.

 “Meanwhile, Malaysia is likely to leverage on this wave to expedite the realisation of its digital ambitions and attract more foreign direct investments. As a more developed and established country compared to other developing ASEAN countries, Malaysia is expected to be a key player for global tech giants looking to invest and expand into the ASEAN market,” he added.

Postponement no longer an option

Towards the end of the interview, Chiew reiterates that the “datacentre infrastructure has been the driving force in the rise of the digital economy.”

“This was very apparent in 2020 when cloud computing technology enabled the nation to persevere and adapt to the new normal during the COVID-19 pandemic. This trend will continue well into and past 2021. It is an enormous challenge and also an opportunity for datacentres as digital infrastructures will be central to this transition.”

Citing highlights from IDC research, Chiew said the pandemic-driven IT modernisation is a continuation of the enterprise shift from on-premise legacy IT platforms and systems to more agile cloud technologies in third-party datacentres. This has been a long and gradual process, but the pandemic has provided a ‘seismic jolt’ to these efforts.

“This translates to a massive demand for hyperscale capacity. Postponing IT transformation projects won’t be an option in 2021 as companies adjust their IT roadmaps to compete in a shifting business landscape. The pandemic has placed emphasis on flexibility, which will accelerate the ongoing shift to new architectures and software-defined, programmable infrastructures.”

Chiew concluded: “These factors add up to a near-future picture of a massive surge in demand for datacentre and cloud infrastructure to be bigger, faster, ready-to-scale and available everywhere.”

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