Budget 2020: More is needed to aid Data Centre to promote digitalisation

Budget 2020: More is needed to aid Data Centre to promote digitalisation

AIMS Data Centre (“AIMS”) believes the government should continue looking into providing incentives and exemptions for local players in the online and digital sectors in order to create a more competitive and conducive business environment.

While Budget 2020 has indicated a promising outlook for advancing digital infrastructure and interconnectivity across the nation, there is still room for Malaysia to grow into a more sustainable and prosperous digital nation.

We are glad to see a healthy allocation and support from the government, especially the allocation of RM250 million by the Malaysian Communications and Multimedia Commission (“MCMC”) to provide broadband access through satellite technology that will enhance connectivity in the interior of Malaysia, especially Sabah and Sarawak.

The government is building the right foundation for a digital Malaysia, following its recent announcement towards implementing the National Fiberisation and Connectivity Plan and promoting more digital application pilot projects utilising fibre optics and 5G infrastructure.

We note that while Budget 2020 strives to improve domestic connectivity, focusing on incentives for small and medium-sized enterprises (“SMEs”) and other new digital applications like blockchain and similar technology that leverage Malaysia’s investments in fibre optics and 5G infrastructure, it lacks incentives for one of the core infrastructures that supports the development of a digital Malaysia – Data Centre.

Data centres are not just fundamental to the development of cloud and digital applications, it also serves as an important element in attracting foreign direct investments into the country to enable the creation of jobs and knowledge transfer.

However, the high energy costs for data centres in Malaysia, which account for more than 40% of operating costs, continue to be a major hurdle for global data players looking to host or build data centres in the country. This has led several international players to look at neighbouring countries in lieu of Malaysia.

On top of continuous efforts towards reducing consumption and improving energy usage efficiency, we hope that the government will consider lowering power tariffs to reinstate interest of foreign data players towards Malaysia as a regional hub.

 Solid IT infrastructure, strong server market and uninterruptible power supplies will make Malaysia an attractive hub for regional and international companies to relocate their data centres.

This would contribute greatly towards the government’s Shared Prosperity Vision to build a sustainable and inclusive growth towards a high-income nation.

 Data centres are a core component of business operations for large enterprises as well as SMEs. Downtime of data centres can cost millions in lost revenue and compensation, and disruption in one of these warehouses can cause irreparable damage not only to enterprises but also SMEs if there’s no efficient backup strategy in place.

Hence, we would strongly urge the government to look into incentivising IT players like us.

 Chiew Kok Hin, is the chief executive officer of AIMS Data Centre

The views expressed here are those of the author/contributor and do not necessarily represent the views of The Leaders Online.

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Budget 2020Data centredigitalisation