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Hitachi Sunway hopes Budget 2019 will support Malaysia’s data centre industry


Hitachi Sunway Information Systems Sdn Bhd (Hitachi Sunway), hopes the government will recognise data centres as key growth enablers, as highlighted in the group’s aspirations for Budget 2019.

According to Group chief executive officer (CEO) and director Cheah Kok Hoong, Malaysia is on a path to rebuild itself and Hitachi Sunway believes digital transformation such as Internet of Things (IoT) and Artificial Intelligence (AI) will be a driving growth enabler for the nation.

“However, data management, storage and security require an ecosystem that includes power supply, connectivity and infrastructure,” Cheah said.

Currently data rich global businesses prefer to host or build data centres in neighbouring countries as energy costs for data centres in Malaysia amounts to as more than 40 per cent of operations costs.

While the industry is making efforts to implement green technology to reduce consumption and improve energy usage efficiency, the price remains a concern for global data players especially when there are cheaper options nearby.

“Which is why we urge the government to recognise data centres as key growth enablers and reclassify data centres under the industrial tariff E power supply.”

At the same time, Hitachi Sunway congratulated the Ministry of Communications and Multimedia (KKMM) for achieving lower connectivity costs for consumers.

“We hope that he will now expedite the lowering of broadband costs for data centre operators and revoke monopolies in the telecommunication sector that hinders the ministries aspirations for faster connectivity.

“Faster speeds at lower costs will enable us to attract global investors to choose Malaysia over its neighbours.”

Hitachi Sunway also highlighted that the reintroduction of SST created repercussions for all in the value chain as operational cost increased across the board. For example, the compound effect of SST on IT services that were subcontracted or had multiple vendors. Cost also increased on software license subscription maintenance.

“We hope the government can review this and also provide incentives for the private sector to invest in digital infrastructure to push Malaysia towards Industry 4.0.”

Hitachi Sunway went on to note that there are many laws in the Communications and Multimedia Act that forces internet service providers (ISPs) and data centres like the group to follow the law and act against the wishes of the people.

“For example, once an order from the Malaysian Communications and Multimedia Commission (MCMC) is issued, under Section 242 it is an offence to not comply with MCMC’s request, even if we know the request was not right.

“Section 242 handles compliance to the Act, where failure to comply is punishable with a fine not exceeding RM100,000, or prison not exceeding two years, or both. Adherence to such orders are one of the key criterias when the license of a solutions provider is issued. Any deviation of non-compliance of such orders puts the renewal at risk.”

Overall, Hitachi Sunway hoped the government will look into the act and review similar laws.

“At the same time, we urge the government to set up a committee made up of representatives from both sides to review future orders so that the wrong order is not sent out.”