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Emerging economies in ASEAN skipping generations of legacy infrastructure to cloud
February 15, 2019 Blog


As companies continue to spend and invest on technology, the global public cloud services market is one sector that is expected to see spending of over $200 billion according to Gartner. The Southeast Asian region, which is seeing accelerated growth in the digital economy, is at the forefront of this.

Manik Saha, CIO for Asia Pacific and Japan for SAP agrees with this. In fact, he says that growth in the global public cloud services may even go beyond the predicted amount. Gartner’s forecast shows that the market is projected to grow at around 17% to 18% in 2019.

According to Saha, there are a couple of factors to this. Firstly, more companies are looking to using infrastructure that is provided by hyperscalers around the world. They are moving most of their work from on-premise to hyperscale. This move, he said, is one of the reasons why this growth is achievable. Secondly, Saha said this move will allow businesses to be more agile, flexible and speedier in terms of how they position their IT.  As a result, they plan to use hyperscale as their next infrastructure platform.

“We’re seeing predictions from analyst firm, Gartner, of about 17% to 18% year on year And that is a huge amount, considering the amount of existing infrastructure out there. In some sense, you can argue the $200 billion predicted is probably only on the low end of the scale.”

Looking at Southeast Asia, Saha says the region is driven by massive economic growth. “If you look at mobile users in this region, it’s the highest. A lot of consumer behaviour is driven by mobile apps and mobile usage. This growth in mobile apps and usage will lead to more services and products online. This will automatically drive the cloud growth.”

Saha also said that as most ASEAN economies are emerging economies, they can skip one or two generations of legacy infrastructure and directly move to cloud, which is much agile and flexible. In his opinion, this is one of the reasons for faster cloud growth in the Asia Pacific and Japan region compared to Europe.

Speaking of cloud, Saha said that he sees both public cloud and hybrid cloud as complementing each other instead of competing. For most companies that have legacy and background on an on-premise setup, the hybrid cloud serves an intermediate step to get onto the public cloud. He added that in SAP, they are using public clouds when they move from on-premise. But for their internal systems, the hybrid cloud is an intermediate approach because not all systems can move at once.

There are drivers to what will be the final state of the hybrid cloud. Firstly, would companies want to put all their information on public clouds, or would they still want to have some on-premise? This would be a reason why they would want a hybrid cloud setup. Secondly, companies may want to have an option to have some data or applications on-premise, which leads to hybrid cloud.

“There is a lot of debate going on in the industry among companies looking at what is the economics and the viability of moving 100% to cloud as part of their roadmap.”

As more companies use public clouds, the issue of security arises as well. Saha said that talk of security or ensuring that corporate data is safe in the cloud is going to become more relevant. “Regardless of whether a company is moving to cloud or staying on-premise or in a hybrid environment, there is going to be a very strong conversation on this. When companies move to the big cloud providers, they can choose to go hyperscale or pick SaaS solution providers like SAP. There are billions of dollars being invested on trying to safeguard, from a cybersecurity point of view, their assets and premises that are provided to their customers.”

Small and medium sized companies will not have the huge investment funds available to them to safeguard all the security related threats that are out there. Saha added that it would be better to safeguard data by working with partners that are scalable as oppose to managing cybersecurity on their own. This would give customers assurance when they move to cloud; that they are not just buying the service but also a certain degree of security with that. However, Saha said that there is always a discussion on what can be prevented in the world of cybersecurity because there are always elements of malicious intent.

Referring to data residency laws in Vietnam, Saha said this is more of controlling of who has access and processing the data instead of a cybersecurity issue. Similar to the GDPR in Europe, it’s more from an ownership and custodian point of view on what happens to the data. Having said that, Saha believes that hyperscalers are coming in with best practices across the world from a cybersecurity and services point of view.

With AI and Machine Learning being the trends in tech today, Saha said that it’s a question of how businesses use these to give customers what they want and to keep them connected. All these technologies are supporting enablers towards the customer experience. A lot of businesses are using this to give customers the complete experience in using the technology. He added that the most important thing for a company is to be able to capture that experience and use that as a way to monetise the services and products.

“We are going to get into more real-life scenarios that are going to use data in more meaningful ways. A lot of companies are going to monetise the data that they have within their own companies and start using them in a more meaningful way this year.” Saha believes that companies will accelerate the processing of their data to get more insights this year in order to get the best out of them.

Manik Saha will be speaking at the Cloud and Datacenter Convention 2019 in Hanoi, Vietnam, on the 21st of February 2019. Organised by W.Media, the event will be Vietnam’s first all-inclusive event where end-users, operators, system integrators, consultants & engineers are able to meet and connect.

The convention will highlight key progress, best practices, concerns and future of cloud and data centre innovations, featuring international speakers and industry experts from SAP, VNPT Northen Data Center, FPT Software, Viettel IDC and the Ministry of Information and Communication (MIC) Vietnam. It is one not to be missed. If you are interested, please register here.