This article first appeared in Digital Edge, The Edge Malaysia Weekly on September 9, 2024 - September 15, 2024

The digital revolution continues to transform Malaysia, driving innovation and economic growth in a rapidly changing world. At the heart of this transformation lies critical infrastructure — data centres which house the servers storing and processing our data — that forms the complex backbone of the modern internet.

How to ensure these data centres work together seamlessly, enabling efficient data exchange and fostering a robust digital ecosystem, is a key question posed to me by business leaders. And the answer lies in data centre interconnect (DCI).

I believe that DCI’s role is becoming pivotal. It is a technology that helps us connect multiple data centres and is indeed crucial to supporting the rapid growth of cloud computing and demands of digital transformation and modern business operations.

DCI is the engine that provides high-bandwidth, low-latency connections between geographically separated data centres. Imagine a network of highways specifically designed for data traffic, which powers the seamless exchange of information, allowing businesses to:

• Support digital transformation: DCI enables the migration to cloud-based services, so that businesses can access on-demand resources and scale their operations dynamically such as expanding their data storage and processing capabilities in response to growing demands.

• Enhance disaster recovery: With DCI, businesses can replicate data across geographically dispersed data centres, ensuring business continuity in case of outages.

• Optimise cloud integration: DCI creates a dedicated network for cloud traffic, improving application performance.

Forward-thinking leaders know that these capabilities are essential to ensure seamless data flow. Furthermore, I believe that DCI is essential for Malaysia’s digital ambitions, as the technology can play a vital role in accelerating the adoption of cloud services and artificial intelligence (AI) technologies, which can propel the nation into a digital leadership position.

Another important consideration I mentioned earlier is latency, which has become the new currency in the digital age. For global businesses, the ability to transfer and access data quickly across vast distances is crucial.

DCI ensures that data can move seamlessly between continents with:

• Optimised workload distribution: DCI allows businesses to distribute workloads across geographically dispersed data centres, ensuring optimal resource utilisation and global reach.

• Seamless cloud integration: DCI facilitates the efficient exchange of data with cloud providers, enabling businesses to leverage the power of the cloud without geographical limitations.

Massive data centres, powered by advanced DCI solutions, translate into increased network capacity and speed. This infrastructure is essential to supporting the growing demands of cloud computing, big data analytics and the Internet of Things (IoT). As businesses continue to digitalise, the importance of robust and reliable DCI solutions will only grow.

A recent DC Byte study noted a significant increase in Asia-Pacific’s data centre live supply growth between 2018 and 2023. This is expected to continue to expand, fuelled by the region’s young, tech-savvy population and the expanding e-commerce and fintech sectors.

To meet this demand, telcos are expanding data centre services, especially to support 5G and edge computing applications. Recent reports indicate that Asia-Pacific is expected to see the highest compound annual growth rate.

Indeed, we are witnessing a breathtaking surge in data centre construction across the region, fuelled by global and regional tech giants’ insatiable appetite for capacity. Japan, South Korea, Malaysia, Indonesia, Thailand, the Philippines, India, Taiwan and Australia have become hotspots for these colossal infrastructure projects.

Additionally, the AI revolution is driving an unprecedented demand for GPU-powered data centres. It is clear that providing GPU-as-a-service will be a cornerstone of supporting enterprises on their digital transformation journeys in this dynamic market.

Emerging markets in Southeast Asia include Malaysia. Johor, in particular, is attracting significant foreign direct investment (FDI) into its data centre sector, positioning Malaysia as a crucial hub for data centres in the region.

Strategically located just north of Singapore, Johor is one of the busiest land crossings in the world with hundreds of thousands of people crossing daily between Singapore and Johor. Combined with its investment-friendly policies and infrastructure development, this makes it an ideal regional epicentre for data centres.

Johor is poised to attract a further RM17 billion in data centre investments this year, following a strong 2022 with RM51.1 billion invested. The latest investor to participate in the Johor data centre growth story is Singtel.

As Malaysia continues to build its digital future, ensuring data sovereignty and security has become paramount.

Data transmitted between data centres must be secure, especially for sensitive applications and data transfers. Secure connectivity is a critical concern in DCI, and companies are working diligently to provide scalable, reliable and secure solutions, especially to support the rapidly emerging AI industry.

Implementing cloud-based data centre solutions is made smoother by working with technology partners that are able to leverage expertise in optical and networking technologies to deliver agile DCI solutions, which meet strict business continuity, regulatory and compliance requirements. The right solutions are designed to provide secure and efficient interconnections between data centres, supporting both private and hybrid cloud environments.

Moving ahead, building trust through secure and sovereign data practices will be a key force in boosting Malaysia’s digital economy. By ensuring that data is managed and transmitted securely, the country can safeguard its digital assets and build a resilient digital future.

In my view, DCI will prove to be a fundamental technology in Malaysia’s digital armoury. As the country continues to stride forward, DCI, local web and sovereign data management will be the critical components for a secure and thriving digital economy.

Ming Kin Ngiam is head of SEA South, network infrastructure sales, at Nokia, the technology leader across mobile, fixed and cloud networks

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