Cultivating interest in the Cloud

  • TECH
  • Thursday, 09 Apr 2015

WORTH THE EFFORT: Despite difficulties that will be faced when migrating to the Cloud, it is still a wise move for ISVs to make, according to Khow.

Even though most local businesses are aware of benefits of operating on the Cloud, many small and medium enterprises (SMEs) have yet to incorporate such technology into their products and services. 

In fact, so far only 288 MSC status companies out of the current total of 3,000 have embraced Cloud technology. 
“We really want to grow these numbers, but how fast we can do so is limited by how ready the companies are to go on board the Cloud,” says Angie Khoo, head of client management and development for infotech at the Multimedia Development Corporation (MDeC). 

Jeffrey Khow, sales director at Shinjiru Technology Sdn Bhd notes that one of the main challenges faced by independent software vendors (ISVs) when moving to the Cloud was their ability to convert their applications into software as a service (SaaS) offerings. 

“They would have to recode their entire application, but they are finding that they don’t have the time to do so. Even for those who actually already have an SaaS ready application, we’ve noticed that they don’t know how to market it,” he says.

In addition, Khow points out that certain companies may also have very specific needs when it comes to the Cloud architecture that suits them best. 

“There are a lot of companies who can’t host their data outside Malaysia. For example, those serving the government sector,” he says. “Others may only wish to target the local market so it would not make sense for them to host their data overseas as it poses connectivity and support issues.” 

Despite these difficulties, he says that the fact remains that it is still worth the effort for businesses to adopt Cloud technologies as part of their business model and overall operations. 

“The Cloud is very disruptive and has a great impact on the way business is being done today,” explains Dr Dzaharrudin Mansor, national technology officer at Microsoft (Malaysia) Sdn Bhd. 

“One advantage is that it provides economies of scale and lowers the total cost of ownership, which can result in up to 10 times of cost savings.”

Globally, Khoo from MDeC notes that use of the Cloud has been known to contribute toward a 30% to 40% reduction in capital expenditure. 

“There is also the advantage of agility, which gives firms the opportunity to leverage on computing power in order to innovate,” adds Dzaharrudin from Microsoft. “Lastly, it helps in terms of compliance too, especially for companies that need to adhere to international standards.”

Equipping ISVs 

In order to boost Cloud adoption rates in Malaysia, MDeC  has been running its MSC Malaysia Cloud Initiative (MMCI) since 2012. 

“MDeC is doing this because we want to see more SaaS developing within the local ecosystem. We hope to help SMEs in lowering their costs of doing business and to create a robust and agile economy,” says Khoo from MDeC. 

Industry players such as Shinjiru have recently begun partnering with MDeC with the goal of providing assistance to companies who are both an ISV and an SME as they journey towards the Cloud. 

“Basically, the whole Cloud ecosystem comprises ISVs, hosting companies and end users. In order to drive Cloud adoption in Malaysia, MDeC is providing incentives for all three of these parties,” Khow explains. 

MMCI offers eligible organisations an incentive worth RM30,000. 

Out of this amount, RM15,000 is sponsored by MDeC and is to cover the cost hosting credits which entitles the company to a one year subscription of cloud hosting services with Shinjiru. The remaining RM15,000 is contributed by Shinjiru and will be used to finance training costs which includes advice on go-to-market strategies.

Any ISVs seeking to apply for this program must first have MSC status and be 51% locally owned.

An added benefit for ISVs that are under MMCI is that they would be able to enjoy a 10% discount on published rates for subsequent hosting service renewals with Shinjiru beyond the one year period of the programme.

Besides that, due to an existing partnership that Shinjiru has with Microsoft under the latter’s Cloud Service Provider programme, ISVs will be also be given free access to the Microsoft Office 365 suite. Shinjiru can also help them to set up a Microsoft Azure cloud architecture.

So far, Khoo says the retail industry in Malaysia has been the most receptive towards Cloud adoption.

“They are adopting the Cloud for business systems such as customer relationship management, enterprise resource planning and human resource management,” she says.

Looking ahead, she adds, “We are predicting that GST accounting solutions on cloud based will be a hit this year.”

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