Businesses are set to increase adoption of cloud technologies during the next 6-9 months, relying on a core ecosystem of specialised partners as Southeast Asia sizes up a return to growth.
Motivated by a desire to embrace OPEX over CAPEX, in addition to enhancing end-user productivity and business continuity levels, customers are zeroing in on cloud to kick-start revival efforts amid a downturn in hardware demand.
Assuming a lead role in galvanising the region will be the modern-day channel, backed by an army of cloud experts and delivered via revamped managed services offerings.
Such market sentiment was shared during the inaugural Channel Asia Advance, a virtual roundtable housing six leading cloud providers across ASEAN, spanning Aliz Technologies; AVM Cloud; Blazeclan Technologies; CloudCover; Cloud Comrade and InfoFabrica.
Launched in early August, Advance is a centralised editorial resource designed to help partners access forward-looking content as the Southeast Asian market attempt to reposition for growth. Delivered on-demand, the platform facilitates channel collaboration through access to real-time, relevant and local analysis, complemented by virtual events and research.
Despite ongoing Covid-19 challenges – triggered by the uncertainty of lockdown measures, government stimulus packages and customer budgets – partners are seeking to move the conversation forward to focus on short- to medium-term priorities.
Hence Advance, launched with the aim of helping partners search for pockets of opportunity – and revenue – in the months ahead.
Immediate customer priorities
During opening observations, Balazs Molnar - CEO of Asia Pacific at Aliz - acknowledged the difficulty of assessing the true impact of Covid-19 at this stage, but stressed that despite such unpredictability, cloud continues to experience “strong momentum”.
“I believe businesses with solid financials will accelerate efforts with regards to moving workloads to the cloud,” he assessed. “Priorities have been shifted from experimentations to driving real efficiency and return on investment [ROI] and I believe overall this will help to drive more market momentum in the mid-term.”
Speaking as CEO of Blazeclan, Varoon Rajani concurred that cloud adoption is “bound to increase” during the upcoming quarters across Southeast Asia, with economic recovery linked to new project approvals at customer levels.
“Accessibility to data centres during Covid-19 lockdowns and circuit breakers has been a challenge for many companies,” Rajani said. “In most countries, data centres have been designated as essential services but some companies still had issues in accessing the data centre due to personnel or logistics issues. This will make companies think about their data centre operations and try to have an alternative to it.”
During lockdown, Rajani said end-users had “little choice” but to access services using digital platforms. As a result, the businesses which have thrived in response have been those capable of delivering services digitally, essentially aligning offerings with demand.
“More enterprise customers will invest in digital capabilities and that will accelerate cloud adoption,” he added. “Security and accessibility considerations will also be key. In the last few months, there has been a consistent rise in security incidents across businesses of different sizes and in all geographies.
“Managing security in a shared security environment with cloud operators is comparatively less complex compared to managing security in an on-premises environment. This will be a big factor in customers making decisions about moving to more secure cloud environments.”
Finally, Rajani believes conversations centred on increasing the total cost of ownership will further strengthen the credibility of cloud in ASEAN.
“As the economy tries to recover over the next few quarters, businesses will focus on improving their bottom line,” he outlined. “Migrating to cloud and reducing the cost overheads of maintaining a data centre will accelerate the migration of technology infrastructure to cloud.”
Echoing Rajani’s observations, Vishal Parpia - co-founder and CEO of CloudCover - reinforced the issue of customers being unable to buy and install new hardware due to pandemic-related shortages in the supply chain, hampered further by constrained access to data centres due to closures, subsequently forcing IT departments to embrace cloud.
“Companies have also found multiple apps and databases that are inaccessible remotely and need to make them accessible fast,” he added. “There were a lot of requirements for having our team ‘onsite’ which was always a little baffling when related to cloud.
“The relaxation of this allows an overall reduction in the cost of implementing cloud and should help accelerate further. There is less focus on vanity projects and more on core apps and databases. We’re now moving into true cloud adoption vs. ticking the cloud box.
“Plus, there’s a new cloud region in Indonesia through Google Cloud which is always a good shot in the arm for a geography.”
Delving deeper, Andy Waroma - co-managing director of Cloud Comrade - pointed to heightened acceleration of end-user productivity projects post-lockdown as a cause for optimism within the local cloud market.
“There are still many traditional enterprises and SMEs who have been building business processes based on the physical interaction between employees and customers,” he said. “That changed very rapidly in recent months because the market had no choice. Now a number of organisations are training employees to become part of the digital workforce.”
Consequently, Waroma believes cloud infrastructure project will continue to “take priority” in most budget planning sessions.
“It's all about business continuity, moving from CAPEX to OPEX and having the ability to scale up or down when the economic situation changes,” he advised. “Cloud is the only game in town that offers the foundation for all these three.”
New customer requirements
From an analyst perspective, cloud services look set to remain “resilient” across Southeast Asia during the remainder of 2020, providing “robust growth” opportunities as both customers and partners reposition for growth.
According to IDC findings, infrastructure-as-a-service (IaaS) investment is expected to increase by 26 per cent during the next six months, triggered by increased demand for business continuity and collaboration technologies. During the same period in ASEAN, platform-as-a-service (PaaS) deployments are expected to increase by 38.5 per cent, alongside projected growth of 22.8 per cent within the software-as-a-service (SaaS) space.
For Wen Chi Li - founder and director of InfoFabrica - the acceleration of cloud will enable businesses to work remotely and collaborate more efficiently, in addition to cutting down up front CAPEX investment.
“Our existing customers are focusing on cost optimisation and new workloads while new customers are prioritising how to become more efficient, agile and cost effective,” he assessed. “For the public sector, the smart nation drive is still a key priority amid plans to transform existing infrastructure but for commercial customers it once again comes back to becoming more efficient, agile and cost effective.
“Our short-term priorities include continuing to invest and deliver cost optimisation services to help our customers to optimise cloud environments. In the medium-term, we are focused on driving cost efficient collaboration and business continuity planning solutions and bundles with vendors to ease hybrid cloud transformation journeys.”
Meanwhile in Malaysia, Kenny Lim - CEO of AVM Cloud - said customers remain motivated by ensuring business continuity and leveraging digital related offerings supported by cloud services, backed by subscription services on a pay-per-use basis.
“Cloud will continue to accelerate,” Lim stated. “Due to Covid-19 and the recession, many companies will start to manage CAPEX considerations by examining cloud solutions and other outsourced services.
“Customers are experiencing a change of business practice and are therefore relying on multiple cloud environments, hence anticipation of instant provision and a spike in cloud usage - we are ready to support the demand.
“Customers are also looking for solutions that allow employees to work from home, which is why our desktop-as-a-service [DaaS] offering has become one of the most subscribed service during this period. We also have a stable IaaS offering in place and next in line will be Kubernetes and analytical solutions."
For Parpia of CloudCover, requirements continue to vary depending on the customer, spanning either “defence or offence”.
“Incumbents are plugging IT system gaps that were exposed during Covid-19,” he explained. “Meanwhile challengers are using this opportunity to start digital initiatives and steal a march or two on the competition.
“Our short-term priority is to meet customer demand, geographically with expansion in Indonesia and from an offering perspective through the delivery of solutions that help with pain points. Medium-term, we’re focused on reducing the cost of delivery through automation, especially for cloud-native workloads.”
In assessing the current state of the market, Molnar of Aliz accepted that “cost-saving and operational efficiency” have become the most important drivers for cloud adoption during the past few months.
“We also see that strong second players are willing to invest in creating better customer experiences and use the current environment to catch up,” he said. “For those businesses, I believe data and machine learning workloads will remain a priority.”
As outlined by Rajani of Blazeclan, the customer requirements for cloud will remain the same while priorities will change, falling into the categories of either cost savings, security or digitisation.
“Customers will look at near-term cost savings by migrating to cloud, this will be enabled by cloud providers who will be committing to sharing a large amount of costs for migration to cloud,” he said. “Previously, large enterprises were expected to execute the migration projects on their own, now I believe the hyper-scalers will increase funding to enable customers to accelerate migration.
“Secondly, security and business continuity are immediate priorities for customers when migrating to cloud. Finally, all major digital initiatives will have cloud as an underlying infrastructure.”
Embracing partner expertise
In recognition of changing buying behaviours, Waroma of Cloud Comrade said immediate customer focus will be centred less around doing as much as possible in-house and more about looking at what is the most efficient way of achieving business objectives.
“We are already starting to see a trend with digital native and financial services organisations wanting to move in-house resources who are currently in infrastructure support to the frontline of the business to focus on end-customer success,” he said. “These companies are now looking for a partner who can help them to keep the lights on while the rest of the business can pivot towards service differentiation and improved customer service.”
Since launching as a cloud migration and managed services provider more than six years ago, Cloud Comrade has enhanced cloud capabilities along the way, building expertise in machine learning, artificial intelligence, analytics and software-build projects.
“This pandemic has made us focus on our core competencies which are still migrations and managed services but do them at a completely different scale, with repeatability, predictability and most importantly, with extreme automation,” Waroma added. “We no longer take on projects just because they sound cool or because they are at the top of whichever vendor hype cycle - out with the sprinkles and all in with the essential ingredients.”
As a cloud-native business, Molnar of Aliz said market priorities remain unchanged; “automate as much as possible using data and machine learning”.
“The edge of our business model is to automate and use as little human resources as possible during delivery,” he outlined. “In order to do this, we are investing in building tools that help us to scale rapidly and save cost and time for our clients.”
In looking ahead, Rajani said Blazeclan will continue to prioritise the delivery of core offerings such as cloud consulting and managed services, enabling the team to improve efficiencies in terms of migration and automation of infrastructure.
“We have also come up with offerings that will help us save cloud costs for our customers without compromising on the usage or business,” he added. “This is through our experience over the last few years and partnership with companies that provide cost visibility into cloud infrastructure.
“Another area where we see an increase in is containerisation and Kubernetes adoption. We believe that Kubernetes will be the currency of hybrid and multi-cloud environments. Since late last year we have been building our capabilities around this, alongside focusing on data and application modernisation.”