Business

Microsoft eyes growing local cloud market

KUALA LUMPUR, Jan 26 – Microsoft has been working to expand its cloud, or Internet-based, computing business in Malaysia as more companies resort to the service, which reached US$68.3 billion (RM208.5 trillion) globally in 2010.

The Malaysian market is expected to grow strongly in line with global cloud services revenue, which analyst firm Gartner said will expand 20.5 per cent over the next five years to hit US$148.8 billion by 2014.

In cloud computing, consumers can access software and information on demand through the Internet like electricity. Consumers also no longer need expertise in or control over physical infrastructure like servers.

While declining to provide figures, Microsoft Malaysia's chief marketing and operations officer Danny Ong said uptake of Microsoft's cloud services by local companies has been “very good” since its introduction here in May last year.

“We’ve been working very, very hard with a lot of our customers and the government in terms of adopting cloud services in Malaysia,” he told The Malaysian Insider.

Ong revealed that cloud computing has emerged as the top priority for Malaysian businesses as local companies strive to trim costs while remaining nimble enough to respond to market uncertainty in coming years.

Ong said companies here adopting cloud computing could expect to see “big differences” in terms of savings to their information technology (IT) budgets as the Microsoft-hosted service would allow consumers to increase or decrease usage during business peaks and troughs without having to invest in costly hardware.

According to analyst firm Gartner, 85 per cent of data centre capacity was on average idle while 70 per cent of IT budgets was spent maintaining data centre operations.

“Anybody can build scale ... The question is, often, do you want to build that kind of scale for an event that may happen once in awhile?” Ong said.

Danny Ong (left), with Gartner research director Errol Rasit, says cloud computing should be a priority for companies seeking flexibility in a volatile business environment. – Pic by Jack OoiDanny Ong (left), with Gartner research director Errol Rasit, says cloud computing should be a priority for companies seeking flexibility in a volatile business environment. – Pic by Jack OoiHe said this service-on-demand model let companies free up money and manpower that would have otherwise been used to maintain physical infrastructure for innovation, while pointing out that actual savings incurred depended on the mix of services adopted.

Ong said that while small companies reported 10 per cent savings upon adoption of Microsoft's cloud services, larger companies like Volvo had succeeded in reducing their IT budgets by some 90 per cent.

He also cited a Gartner case study which showed how leading Islamic finance provider Syarikat Takaful Malaysia managed to establish remote access and e-mail accounts for 200 agents nationwide in under two weeks at lower cost than traditional e-mail solutions by deploying the Microsoft Business Productivity Online Standard Suite (BPOS).

Gartner also said the focus on cloud computing in Malaysia was in line
with regional trends, where previously business intelligence and enterprise applications had been cited as top priorities.

Microsoft and Gartner both suggested that the expected volatility of the global economy in the next decade was the driving force behind the desire by Asian businesses to adopt cloud computing, which companies believed would allow them to “react to sudden threats and opportunities” on a lean budget.

Gartner research director Errol Rasit said such quick turnarounds were possible on cloud computing as it was a “lightweight” technology that could be deployed rapidly to achieve rapid results, compared to traditional models where companies could take years to achieve returns-on-investment in hardware.

“The idea with cloud is that ... it builds efficiency into your organisation,” he said.

Rasit added that, while North America currently leads in terms of cloud adoption, the high degree of virtualisation in Asia and Australia offered a “great springboard” to move into cloud computing.

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