Will Qualcomm’s acquisition of Nuvia fuel growth?

Global wireless technology services company Qualcomm’s acquisition of Nuvia has gotten the thumbs up from its ecosystem partners who believe that it will drive business growth going forward.

On January 14, Qualcomm announced the acquisition of chipmaking company Nuvia for a jaw-dropping $1.4 billion.

At a time where the data center industry is seeing an unprecedented surge in demand due to the pandemic, major players in the chipmaking industry are making significant investments to increase their share in the chip manufacturing market.

Qualcomm’s bet on Nuvia, therefore, also shows the company’s determination to develop its own processors to power next-generation tech services such as 5G, which President and CEO Cristiano Amon sees as “significant opportunities for Qualcomm”.

In the past, Qualcomm has made around 4 dozen acquisitions and with Nuvia, it is looking to take on Intel, AMD and Apple.

“It’s exciting to see Nuvia join the Qualcomm team. Moving forward, we have an incredible opportunity to empower our customers across the Windows ecosystem,” said Panos Panay, Chief Product Officer, Microsoft. “With Nuvia joining the Qualcomm team, we look forward to continuing to innovate and building incredible experiences together. Qualcomm’s commitment to platform technology will help us offer premium smartphone performance to our users around the world,” stated ΤM Roh, President and Head of Mobile Communications Business, Samsung Electronics.

Another partner, Google, pointed out that compute performance, connectivity and power efficiency are critical ingredients that make the billions of Android and Chrome OS devices shine. According to Hiroshi Lockheimer, SVP Platforms & Ecosystems, Google, the addition of Nuvia extends Qualcomm’s capabilities in these three areas and it is exciting to see the next generation of Snapdragon with Nuvia.

The acquisition of Nuvia will enable Qualcomm to continue to advance Snapdragon’s industry leadership and help Acer to continue to innovate and bring high performance, 5G connected devices to our customers globally,” said James Lin, General Manager, Notebooks, IT Products Business, Acer Inc. S.Y. Hsu, co-CEO of ASUS, pointed out that it is excited for the future of our partnership as Qualcomm advances and expands its portfolio and capabilities with the addition of Nuvia.

Bullish on auto sector

It is not the tech partners who seem to be bullish over Qualcomm’s acquisition. Qualcomm’s partner, Bosch, considers the adoption of new in-vehicle services and capabilities as one major driver for growth. “We see the need for high performance, power efficient platforms and appreciate Qualcomm’s ambition to push the boundaries of innovation even further,” said Dr. Andree Zahir, SVP for Infotainment and Connectivity at Bosch. Masashige Mizuyama, Chief Technology Officer, Automotive Company, Panasonic Corporation agrees. “Innovation in the automotive market is occurring at an accelerated pace,” he said.

Peter Popp, Head of Purchasing in Vehicle Networking and Information at Continental is of the view that with the addition of Nuvia it is looking to bring advanced capabilities to next generation vehicles.

“We look forward to Nuvia joining the Qualcomm team as we continue to work together to deliver advanced in-vehicle services and technologies for the customers of our next-generation vehicles,” said Dan Nicholson, VP, Global Electrification, Controls, SW Electronics at General Motors.

The addition of the Nuvia team will enable Qualcomm to continue to consolidate compute and connectivity ECUs into high performance, power efficient platforms to push the boundaries of innovation even further, highlighted Jin-Yong Kim, President of Vehicle components Solutions (VS) Company, LG Electronics Inc.

Nuvia: A two-year old billion dollar baby

Qualcomm’s move to acquire Nuvia for a staggering $1.4 billion is due to the credentials of the company’s founders. Gerard Williams III, John Bruno, and Manu Gulati are former engineers at Apple, where they were involved in designing Apple’s iconic A-series chips that power the iPhone and iPad.

With this acquisition, the three co-founders and their employees will be joining Qualcomm. “CPU performance leadership will be critical in defining and delivering on the next era of computing innovation,” said Williams.

Around 60% of global firms ready for digital transformation: Capgemini Research

Nearly, two thirds of organizations today have digital and leadership capabilities required to successfully implement digital transformation. According to Digital Mastery 2020: How organizations have progressed in their digital transformations over the past two years–a new report by the Capgemini Research Institute, around 62 per cent of the organizations believed they were capable of digital transformation and have the leadership capabilities to do so, an increase from 36 per cent in two years.

In May and June 2020, the Capgemini Research Institute surveyed 1,000 executives from organizations with at least $1 billion in revenue across sectors to gauge their views on the maturity of their organization’s digital and leadership capabilities required for digital transformation. Twenty per cent of the organizations reported revenue of more than $20 billion in FY 2019.

Large organizations, with $10 billion or more in revenue, have been found to have an edge in both digital and leadership capabilities. Some 68 per cent of these organizations say they have the required digital capabilities, compared with 55 per cent of those with less than $10 billion in revenue. When it comes to leadership capabilities the gap is similar: 57 per cent of smaller organizations say they have the required leadership capabilities, marginally lower than the overall average of 62 per cent and the 70 per cent seen among large organizations.

To understand how organizations progressed their digital capabilities in the past two years, Capgemini examined average ratings across four categories: talent and organization, operations, business model innovation, and customer experience (CX). Capgemini’s 2020 research, in comparison with its 2018 research on digital mastery, found that while all organizations are doing better in their digital transformation journeys in 2020, digital masters – organizations with a high level of mastery across digital and leadership capabilities – are widening the gap with their competitors.

COVID-19 has been a powerful accelerator, and, given the urgency for change, organizations have become more enthusiastic and optimistic about the maturity of their capabilities. Alongside this, organizations have taken time since 2018 to evaluate the challenges that stand in the way of success, increasing their investment in digital transformation and their adoption of emerging technologies and putting a renewed focus on talent and culture.

From a sector perspective, every industry has progressed in both its digital and leadership capabilities in the past two years, the research said. Retail now surpasses all other sectors, with 73 per cent of retail organizations saying they have the digital capabilities required for transformation, up from 37 per cent two years ago.

After retail, the telecom sector follows with 71 per cent of organizations saying they have the digital capabilities required. Telecom operators are reshaping the consumer value proposition by creating full-fledged digital experiences. The automotive sector leads in terms of capability growth, having increased its digital capabilities to 69 per cent per cent from 32 per cent in 2018.

Talent and culture determinants

Capgemini’s 2018 research had revealed that the people dimension was a significant barrier to digital transformation, as organisations failed to bring employees along in the transformation journey. However, more organizations today involve employees in their digital initiatives: 63 per cent in 2020, up from 36 per cent in 2018.

Despite this progress, when it comes to skill building, Capgemini found less than half of organizations (48 per cent) are investing in building soft skills such as emotional intelligence, adaptability, and collaboration. Capgemini’s research also consistently found that culture is a top barrier to successful digital transformation, with some organizations, for example, not having a culture where new ideas and experimentation are valued.

Accelerating investments in sustainability

The report highlights that while organizations must keep their eye on factors such as customer experience, operations and business technology, they should also place emphasis on sustainability and their broader purpose, which has become important for customers and employees alike. Consumers are increasingly concerned about environmental footprint and climate change impact and want to make a difference with their actions – 78 per cent of consumers agree that companies have a larger role to play in society beyond their self-interests. Interestingly, research found that currently only 45 per cent of organizations are accelerating sustainability investments, projects, and commitment.

To advance their digital transformation journey further, the report recommends that organizations reinvent the employee experience, leveraging the fluid workforce and ensuring employees’ social contracts align with the digital age. In addition, they should build robust data and platform capabilities, scale new business and engagement models and embed purpose and sustainability as a core part of the business, making it part of the organizational culture and viewing technology from the twin aspects of digital transformation and sustainability.

The progress made in building the necessary digital and leadership capabilities in just two years is striking which led us to undertake this research. The continued rapid pace of technology innovation and business model disruption over the past two years – with COVID-19 forcing many companies to reinvent themselves – has possibly driven this advancement,”said Claudia Crummenerl, Managing Director, People and Organization at Capgemini Invent.

“While organizations have progressed on a wide variety of measures across areas such as customer experience, operations, business and technology, many are still challenged to incorporate purpose and sustainability into their transformation strategies. By reinventing the employee experience and ways of working, embedding purpose into the operating model, truly becoming a data-powered enterprise, and scaling new business models beyond the pilot stage, organizations can attain digital maturity and demonstrate the resilience required to adapt to future uncertainties,” Crummenerl added.

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How China’s Data Center Industry is likely to shape up in 2021

The year 2021 could be termed as a “Year of Renewal”. The world is still in chaos with continuing uncertainties, while at the same time rapidly accelerating and transforming.

As a distinct growth pole of global economy, China’s rapid recovery from the Covid-19 has been commendable. Since the last two decades, it has benefited from fast economic growth, and the country has stood out in the developing world for its unique strengths in its market size, diversity and vitality.

Moreover, with the renewed emphasis on infrastructure in its Five-Year Plan and long-term strategy as well as the new policies boosted to empower the digital economy, new infrastructure development and significant increase in demand for data center is being seen on the ground. Case in point- the undersea data center in Zhuhai.

New Infrastructure Push

Fueled by a surge in demand for local demand for digitalization of business and consumer environment, the construction of new infrastructure including 5G and data centers has developed into a strategy, which enables it to meet the twin urgent goals of increasing employment and preparing for new changes in the global economy.

At the 2020 National People’s Congress, the CCP first emphasizes a digital infrastructure public spending programme. Now, building ‘new infrastructure’ has already become a top development priority for China. Since the Covid-19 outbreak, China has witnessed the potential of cutting-edge technologies like artificial intelligence, big data, and cloud computing.

Several tech giants in China have announced plans to scale up their data centers. Following China’s ‘new infrastructure’ initiative, Chinese internet giant Tencent revealed its $70 billion investment on key sectors over the next five years towards making advances in cloud computing and artificial intelligence (AI) while Chinese e-commerce behemoth Alibaba announced to invest $28.7 billion into its cloud and data center infrastructure over the next three years. Also, Baidu, the leading search engine in China, has planned to set up 5 million servers in the next 10 years.

Real Estate Investment Trusts (REITS) it is!

The National Development and Reform Commission of the People’s Republic of China (NDRC) and the China Securities Regulatory Commission (CSRC) jointly issued the ‘Notice Concerning Work in Relation to Advancing Infrastructure Real Estate Investment Trust Trials’ in April, with an aim to channelise personal savings and private capital into infrastructure projects.

Then in August, NDRC announced that it had recently issued the ‘Notice Concerning Effectively Performing Infrastructure REIT Trial Project Application Work’, which indicates that the Chinese government will give priority to “national key strategic” infrastructure projects when receiving applications for REIT trials, as well as “encourage the undertaking of trials for new forms of infrastructure.”

The Notice further indicates that “national key strategic” infrastructure projects will include those associated with regional development plans for the Beijing–Tianjin–Hebei (Jing-Jin-Ji) area, Xiong’an New Area in Hebei province, the Yangtze River Delta, the Greater Bay Area, and the Hainan Free Trade Port. (Referring to 3rd ‘word of the year’)

As per this new initiative, China expedites infrastructure REITs so that fresh capital could be converted into investment capital in the long term while reducing leverage. Dozens of companies have begun preparing for launching publicly tradable REITs since the trial released. However, the applications are still under consideration as the requirements are very strict.

In the next three to five years, such products are likely to provide about 6 trillion Yuan (around $900 billion) in financial support for China’s infrastructure construction, thus further improving the speed and efficiency of China’s infrastructure build out.

New Area

This is closely linked to new development and is being framed in new ways. ‘New Area’ has rocketed to ubiquity, especially when we consider the site selection. Government influence may steer investors’s location preferences here in China.

To promote urbanization and industrialization, and now digitalization, many new areas and zones have been established to concentrate investments and the labor force as well as resources within designated region with more flexible management systems.

For example, Xiong’an New Area, in Hebei province, was announced to be a National New Area as the “Millennium Plan, National Event” by the State Council and the Central Committee of the Communist Party of China. It has become the third new special zone with “national significance” after Shenzhen SEZ and Shanghai Pudong New Area while the other two have already driven the rapid development of the Pearl River Delta and Yangtze River Delta respectively. Xiong’an New Area connects the Silk Road Economic Belt and the 21st-century Maritime Silk Road with the Guangdong–Hong Kong–Macao Greater Bay Area, so as to drive the development of the Beijing–Tianjin–Hebei economic triangle in Northern China.

Currently, China is speeding up its digital transformation of economy with a plan to build industrial ‘big data’ centers nationwide, enabling massive amounts of information to be used for developing more efficient industries. Supported by government, construction of data center is boosted in these regions such as the Beijing–Tianjin–Hebei (Jing-Jin-Ji) area, Xiong’an New Area, the Yangtze River Delta, the Greater Bay Area, and the Hainan Free Trade Port.

Power Usage Efficiency (PUE)

The word ‘PUE’ never loses its power. The availability and cost of electricity are important factors influencing data center site selection in China. The energy consumption quota of data centers must be approved by governmental agencies including National Economy and Information Commission and National Development and Reform Commission.

Electricity resources in coastal areas and tier I cities are restricted as local electricity generation is insufficient to meet consumption, meaning that obtaining approval for large energy consuming businesses can be problematic.

In order to ensure effective control of energy consumption, improving energy efficiency in major energy fields and accelerating the application of energy-saving and low-carbonizing technologies have become the main goals and tasks of local government during the 13th Five-Year Plan period.

China’s Tier-1 cities, with their high concentrations of data centers and infrastructure, have been first to act, guided by the central government’s 13th Five Year Plan targets for energy use and intensity. Beijing, Shanghai and Shenzhen have already applied strict PUE rules when approving new data centers, pushing the sector towards greener operations with higher energy efficiency.

Although Beijing, Shanghai, Shenzhen, Guangzhou and other coastal areas are the major data center markets in the country, areas like Inner Mongolia, Gansu, and Guizhou pop up to be players under central policy support. National-level big data and data center pilot projects sprout up in these renewables-rich provinces for they offer ample electricity supply and cheap tariffs. Local governments in these areas also offer discounts for electricity consumption by data centers, which can further reduce operating costs.

Built-to-suit Data Center

Data center investment continues to rise in China with growing interest. Larger population bases, more social media activity, data protection and cyber security legislation forcing users to switch to onshore data centers. Does it mean that to invest in this market never fail? Of course not. The consensus of ‘Customer-centric’ is being embraced by players in China market.

As a part of this, ‘built-to-suit’ data center was developed. Customizing a data center, ‘built-to-suit’, is a much different, more challenging undertaking for a certain type of business buyer, or even specific client.

Different from before, one-size-fits-all data center solutions are no longer a priority at a larger scale. More data center service providers are looking to be in tune with clients from pre-development and align with their expectations.

At the same time, built-to-suit also provides a cost transparency and speed to market. As it is specifically designed to fit the clients’ every need, built-to-suit data center can meet the goals with best practices. In 2020, Dictionary.com selected “Unprecedented” as the word of the year. In 2021, it could be “Transformation”.

For more insights on China, do check out our digital event China Datacenter Market Insights happening on March 5!

How has the COVID-19 pandemic affected technology adoption in the BFSI market?

With economic downturns and recessions caused by the COVID-19 pandemic hitting the world, it is a unique and uncertain time for the BFSI sector, as more and more services are going digital.

Banking, financial services and insurance organisations are activating business continuity and risk management plans to survive the impacts and challenges of COVID-19.

“Somehow, over the past three years, the practices of risk management got deprioritised, so that the other priorities like customer centricity or digital innovation world take more importance,” said Michael Araneta, the Associate Vice-President for IDC Financial Insights.

Following the COVID-19 pandemic, Mr. Araneta believes it is important for BFSI organisations to revisit risk managements plans and consider cybersecurity, which could lead to being as extensive as capital related issues regarding liquidity and asset liability management.

“This is really just a matter of activating your risk management plans, but also ensuring that you are well equipped to take on the operational aspects of this crisis,” said Mr. Araneta.

Which technologies did the BFSI sector adopt to react to the pandemic?

To react to this pandemic crisis, BFSI companies began to increase investments and priority in digital technologies to ensure their operations were running 24 hours, 7 days a week.

“The critical technologies they obviously would be using are productivity tools, but more importantly, productivity tools that are on the cloud,” said Mr. Araneta.

It was crucial for these cloud-based technologies to be made as reliable, secure, and accessible by staff as quick as possible, even if they were working remotely.

“The ability of the organisations to sustain operations on uninterrupted basis is very important,” said Mr. Araneta.

Along with cloud applications, the next set of technologies to be prioritised concerned cybersecurity and threat intelligence, as the nature of security threats had already started to change alongside the rise of digitalisation, fintechs and insurtechs long before the pandemic.

“Many of these technologies are already available, it’s just really a matter of making sure that you adopt them in a safe and secured manner,” warned Mr. Araneta.

To take a more proactive approach during this crisis, Mr. Araneta also identified the growing importance in the need to observe data analytics, new types of data and make decisions based on the data.

“The ability of the institutions to analyse data on a real-time basis, so that they can proactively react to the trends in the market became very important,” added Mr. Araneta.

As one of the largest technology research organisations, IDC’s financial insights studied the big BFSI industry trends and developments coming out of the COVID-19 pandemic. One of their major findings was that the financial data we used to rely on does not work anymore.

“The data that we used to rely on to make decisions in 2019 are completely different from the data that we need for 2020,” observed Mr. Araneta.

He speculated that this could be due to the changing conditions and macroeconomic situation that has changed the way that businesses are built.

The key is to remain adaptable and adjust to new working environments, customer needs and technologies to make sure that these are a good fit for your organisation.

> Watch the full interview with IDC’s Michael Araneta

What is the weak link in your cybersecurity strategy?

Southeast Asia is becoming a prime target for cybercriminals, with rapidly growing digitalisation and interconnectivity in the region.

But who or what is the weakest link in your cybersecurity chain making your business vulnerable to cyber attacks?

Register now to find out how you can protect your business and data from the growing threat of cybercriminals on Thursday 3 September.

Get involved in the conversation and connect with your peers on LinkedIn and Facebook using #WMediaEvent!

TCC Technology Interview: Is there any light at the end of the pandemic tunnel?

We need to admit that the pandemic situation is very intense and unlike any previous crisis. It has impacted more or less all companies around the world, including vendors, customers, and even ourselves.

With lockdowns and work from home orders, businesses have been forced to digitise and go online. 

In an interview with Mr Teerapan Luengruamitchai, Managing Director of TCC Technology, we find out how key stakeholders have been affected by the pandemic, how digital transformation might help and our post-pandemic future. 

How has the pandemic impacted key stakeholders?

For Thailand’s TCC Technology (TCCtech), a leading integrated technology solutions and infrastructure provider, they have three groups of customers that have been affected: the prepared, the unprepared and the potential customers.

Prepared customers can adapt quicker and may only need some support like additional space on the cloud, activating alternative disaster recovery sites and tools like Zoom, Office 365 or VPN access to their servers to help with transitions to remote working.

The second group, unprepared customers, might need more support like early state cloud adoption, training and more customer service attention. These two groups have resulted in a surge in short-term demand for TCCtech.

The third group of potential customers may face adverse impact from the pandemic from a reliance on physical business operations as opposed to the digital space. This group could experience greater loss of revenue, as they struggle to digitally transform their business due to a lack of funds or training to adopt the technology. As a result, some organisations have been forced to downsize or shut down completely. To support these companies, discounts of remote working technology may be necessary.

Mr Luengruamitchai, Managing Director of TCC Technology, said: “We understand our customers’ situation very well and work to meet their expectations, even if we have to utilize extra technology resources to help customers run their businesses smoothly in order to help our customer pass this difficult situation.  We view this as a challenge, which should be manageable with our experienced workforce and growth mindset.”

How did TCCtech respond to the pandemic situation?

In Thailand, a partial lockdown in and out of Bangkok was initiated after a state of emergency was declared on 26 March.

TCC Technology Group had Business Continuity Planning in place and a Disaster Recovery Services Offering to customers since the commencement of business. These are established with the purpose to help customers mitigate risk.

Before the outbreak, the technology group considered a number of risks and planned for various scenarios, including a pandemic. In March, TCCtech reviewed and adjusted to the specific COVID-19 case with more immediate responses like classifying the team to align with outbreak prevention guidelines, plan activation and communication.

TCCtech continues to monitor and evaluate the situation, keeping customers updated every step of the way. And their business continuity plan was activated immediately to ensure their people and customers were safe and the maintenance of essential operations. 

What did TCCtech prioritise?

TCC Technology Group placed a focus on safety and business continuity for their customers.

As a result, most staff are assigned to work from home, but they can use TCCtech’s properties to serve as alternative sites when needed whilst maintaining social distancing and minimising the number of staff working from the office. Accommodation is available for staff to stay at or near sites to be ready in case of a full lockdown.

Most customers require quick responses and advice. TCCtech’s mission critical support teams ensure continuous delivery of services 24 hours, seven days a week while staying safely separated from others.

Quote from Mr Teerapan Luengruamitchai

What are the upcoming trends in the technology industry?

The pandemic and remote working situation has made technology adoption much faster than expected with surges in demand for cloud platforms and secured connectivity. 

Technology is the key component being utilised to take care of customers and businesses. Tools like Cloud Platform as a Service and video conferencing software are quite standardised.

But the delay of decision making and payment by customers due to uncertainty in the current climate could result in deterioration of revenue. Even the majority of revenue in the “As a Service” model offering, which results in “recurring” revenue for TCCtech. 

To relieve suffering from the crisis, programs have been launched to prevent impact on revenue in the short term, though the size of the impact will depend on how long the situation persists and how well they cope with the situation.

The International Data Corporation expects in a pessimistic scenario that IT spending will decline in Asia Pacific to 1.2% growth in the first quarter of 2020, down from the forecast of 5.2%. This growth is predicted to decline even further due to the extended period of uncertainty.

If the pandemic prolongs further, there may be some medium-term impacts on business performance to prepare for, including higher expenses caused by disruptions to supply chains and delayed service delivery timelines for customers, or even cancellation of services.

These delays could also cause opportunity loss and missed partnership opportunities, as informal networking becomes more difficult. With a loss of revenue or higher expenses, there may be a slowdown in tech spending and a weakening of the overall market sentiment. 

Is there any light at the end of the pandemic tunnel?

During the pandemic, people are automatically adopting technology to keep businesses running and stay in touch with loved ones. 

If there are any silver linings to take away from the tragic situation, it is that more are getting ready for digital transformation and preparing well to encounter and mitigate the impacts from this kind of situation in the future.

Digital transformation decision makers may also look for some IT solutions such as a work from home suite, including technology to track employees while working at home, which may result in businesses requiring less dedicated space and the need for tools to manage co-working spaces for their staff instead.

This should be a positive factor which helps accelerate growth in the technology market, especially in areas like cloud infrastructure and business enabled applications over the long-term. The financial performance will depend on how well they can help customers transform and invest in digitisation in the future.

Right after this interview, you may like to find more on how SMEs and CXOs get started in digitally transforming their business. More digital transformation is expected in the future, with investment growing at an annual growth rate of 17.5% and expected to approach $7.4 trillion between 2020 and 2023.

How can SMEs and C-level staff get in on the action? Find out how to implement a successful digital transformation strategy and avoid the pitfalls at W.Media’s next digital event on 14 May 2020.

Register now for Digital Transformation – Through the Lens of CXOs and SME Business Owners. Limited spaces available.

Opinion: How rethinking the normal could improve sustainable data center builds

Joshua Au

Head (Data Centre) – Information Technology Shared Services, Agency for Science, Technology and Research (A*STAR)

“The pandemic makes it increasingly hard to hold on to the idea that the business of business is merely business”. I read this quote by Harvard professor Rebecca Henderson recently and it gave me pause for thought on how to approach an article I promised months ago to write for W.Media

There is no easy way to write about the complex and nuanced relationship between the data center industry and sustainability.

Though, I am not sure what the facts are, I will share a point of view (I might even have endorsed a few white lies), and perhaps this could pique the interest of some readers to fact check and draw their own conclusions.

The data center industry responds to call for action

According to the International Energy Agency, global internet traffic has tripled since 2015 and is expected to further double by 2022, and drive up demand for data centers to process this traffic. The global data center electricity demand in 2018 was estimated to be 198 terawatts per hour, or almost 1% of the global demand for electricity.

And hence, as Gary Cook from Greenpeace puts it, it is important that people building data centers around the world build digital infrastructure in a way that is consistent with tackling climate change aggressively.

In fact, the Internet industry at large has been responsive to calls by Greenpeace.

Facebook committed in 2010 to power its operations with 100% renewable energy. Similarly, Microsoft aims to be carbon negative by 2030 and, by 2050, remove from the environment all the carbon the company has emitted since it was founded in 1975.

In December last year, Chindata became the first data center in China to set a target to power its operations with 100% renewable energy, and has since come top of the renewable energy ranking in Greenpeace East Asia’s report published this year. Chindata and Alibaba are now working together with the local government in Northern China for a cooperation mechanism that would allow Chinese cloud and data center operators to procure renewable energy directly from wind and solar generators.

Many groups have also come forward to advocate green data center practices (such as the likes of the Green Grid and the Infrastructure Masons), including the Open Compute Project Foundation, which seeks to promote a more efficient way of computing, and the EU-funded Boden Type DC One, which is experimenting with new and more efficient ways of compute. 

The list goes on.

Sustainability can be good for business

I do not suggest that all entities embark on sustainability efforts out of the kindness of their hearts or a conviction about the need to do the right thing. Shrewd companies and their shareholders can and do benefit fiscally from these efforts.

Jeffrey Jaensubhakij, Group Chief Investment Officer (GCIO) of GIC, told the World Federation of Exchanges general assembly in October 2019 that ‘the markets are rewarding companies with sustainable business practices’.

Singapore imposed a carbon tax in 2019 at a rate of $5 for every tonne of greenhouse gas emissions, putting additional pressure on data centers to be sustainable and avoid additional costs.

With sustainability increasingly tied with corporate governance under corporate ESG functions, sustainability is now seen as another means of creating shareholder value – think of the Dow Jones Sustainability Index.

We are not out of the woods yet

The problem of climate change is so big that it cannot be effectively dealt with by any one party.

But just how do you begin to describe this problem? According to (some) scientists, burning of fossil fuels leads to billions of tons of CO2 emissions yearly, and in turn rising global temperatures.

Global warming would weaken the thermohaline circulation leading to more droughts, changed weather patterns, reduced global crop production, rising sea levels making coastal areas uninhabitable and a medium ice age. In other words, apocalypse.

In 2019, the Intergovernmental Panel on Climate Change reported that limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society. More specifically, global net human-caused emissions of carbon dioxide would need to fall by about 45% from 2010 levels by 2030, reaching net zero around 2050

However, observers might be discomforted by the lackadaisical commitment shown by some nation states in the COP25 Climate Change Conference, and in their targets declared in the Nationally Determined Contribution submitted every five years under the 2015 Paris Agreement.

Suffice to say, not all nations and scientists are persuaded of the rationale and urgency to curb carbon emissions.

There is also a more immediate effect that more of us can make sense of. Burning of fossil fuels contributes to fine particulate population, and breathing in microscopic pollutants inflames and damages the lining of the lungs over time, which can make the human body more susceptible to respiratory infections and various other medical conditions.

So despite the herculean efforts of the data center industry where the burden may be not evenly shared by all industry members, I am not persuaded we should be happy with the progress we, the human race, are making.

Putting the cart before the horse by rethinking the normal

I think we should fundamentally rethink how we frame the subject of sustainability, being cognizant of the complex and evolving needs of the different stakeholders.

A good sustainability strategy is one that mobilizes industry, government and consumer. If you take out of one of the tripod legs, it’s just not going to work very well. We stand to gain collectively and individually from a more coordinated and collective response. 

Has the data center industry done enough? Is there more it should do? I leave that to you to decide. Because data centers are simply businesses, and businesses exist to continually make a profit, just as workers work to continually put food on the table. Which means they will give what consumers are willing to pay for and policy makers allow them to, on the premise they can make enough to stay afloat

Modern consumers are increasingly addicted to the convenience and reliability of the internet, and as the engine of the Internet, data centers power the way we live, work and play. It is the consumer behavior and their spending dollar that determines what is produced to feed that spending.

If we accept that some of these services (that we are addicted to) can be slower and even less reliable, would that change how we design and operate data centers? – Some might recall the triangle being referenced in the Green Grid white paper on the performance indicator.

Fast and reliable has been the normal, and we all want to return to normal. But what if normal is what got us into this mess in the first place?

Rebecca Henderson suggests three reasons why we are slow to change: Denial (“It’s not going to happen”), Greed (“My current needs are infinitely above other peoples’ needs, including my future needs”), and Overload and Incompetence (“I am too overwhelmed to act otherwise”).

Because to respond effectively would require us to reinvent the way we live, work and play. It means we have to overcome the self-denial, the greed and the incompetence that is embedded in the way we live, work, play and govern. It might even mean we need to disrupt or reinvent the way industry, governments and consumers talk to each other.

I cannot imagine what it means. What I can imagine is spending two weeks in isolation where I am forced by law to change my habits and stay indoors.

And to add salt to the wound, my Internet connection failed on me this week for nine hours. It seemed like the end of the world for me, but the morning arose again the next day.

It is still business as usual for me, even after the Internet took a nine hour break. And perhaps we might think differently of what business as usual means at the end of this pandemic.

Coronavirus and conspiracies: has the 5G market taken a hit?

Coronavirus and conspiracies: has the 5G market taken a hit?

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In an unexpected twist in the coronavirus saga that couldn’t have been predicted mere months ago, conspiracy theories linking 5G to the outbreak are spreading rapidly.

The baseless theory that originated in January claims that 5G towers transmit radiation that weakens immune systems, helping to spread the virus.

With China delivering one of the first and largest commercial launches in November 2019, the rumours were able to pick up speed. 

The theory continued to gain popularity, as the fake news was spread on social media groups and by celebrities with millions of followers, including Hollywood stars Woody Harrelson and John Cusack, singer Keri Hilson and rap artist Wiz Khalifa. 

Despite the conspiracy being completely unfounded, incidents of phone masts being vandalised and engineers harassed have been reported.

How has the coronavirus outbreak affected the 5G market?

5G is known to allow greater and faster data processing. The new wireless communication technology is seen as an integral part of digital transformation strategies and interconnected technologies in various industries. 

Before the outbreak, a number of countries looked to adopt 5G wireless communications technology. The rollout in Singapore was estimated to reach 50% coverage by 2023. This is much slower than 4G rollout, which could be explained by a lack of revenue opportunities in the consumer space. 

The pandemic could lead to slower rollouts for 5G with market analysts at Frost & Sullivan predicting a possible slow down in rollout schedules.

Miss Mei Lee Quah, Associate Director of Telecoms and Payments Strategy at Frost & Sullivan, said: “The coronavirus outbreak highlights the urgent need for upgrading digital infrastructure and for deploying 5G networks.”

But the highly anticipated transition from 5G New Radio Non-Standalone to a Standalone mode may also be delayed. A Standalone mode will eventually allow 5G to be used for both signaling and information transfer rather than relying on existing LTE networks.

Miss Quah added: “In some places where it makes economic sense, the outbreak has actually driven the market for fixed wireless access, although the bulk of the solutions are still on 4G rather than on 5G.”

Investments in 5G NR infrastructure had been ramping up, while spending in 4G LTE infrastructure had been slowing down. 

But in the midst of the coronavirus outbreak, Miss Quah noticed mobile operators increasing spending on 4G LTE to support the increase in work from home and online arrangements, leading to a significant increase in the use of high-speed broadband for media and entertainment at home.

Sachin Mittal, the Head of Telecom, Media & Technology Research at DBS Bank, predicts that the outbreak’s impact could linger with a 10% decline in mobile revenues.

Research firm Strategy Analytics also lowered its forecast on global 5G smartphone shipments to 199 million from 250 million in the first quarter. The reason given was the virus had taken a toll on the worldwide semiconductor market, which especially goes into smartphones.

Smartphone giants Huawei, Samsung, and Apple are also experiencing a slowdown in the production of their 5G products.

For consumers, the China Academy of Information and Communications Technology announced a 56% drop in smartphone sales in February 2020 compared to 2019

It is unknown as of yet how the conspiracy theories could affect the 5G market, but other than some repair works to phone masts, the damage could be minimal. 

The need for 5G will continue

Despite the conspiracies and slowdowns, some countries are pushing for 5G to support the healthcare industry, much like data centers and cloud services. 

Miss Quah said: “The coronavirus outbreak will have a short term impact on 5G.”

The healthcare industry could drive early 5G adoption, but more innovative use cases will be dependent on releases 16 and 17 expected in 2020 and 2021.

She added: “Demand for 5G is expected to pick up again once the critical stage of the outbreak is over and countries are able to flatten the curve of new infections.”

In her conversations with mobile operators, vendors, and end-user companies, Miss Quah found the majority to agree that there is a clear need for 5G in their industry ecosystem.

What are the challenges in driving 5G adoption?

Miss Quah found that mobile operators’ and vendors’ biggest challenge with driving 5G adoption is the lack of sufficient industry partnerships to build solutions that capitalise on 5G. She noted that some are heading in the right direction by seeking out a deeper understanding of end-user needs.

For end-user companies within vertical industries, they are currently struggling to come up with innovative ideas that can unlock the potential of 5G. It can be difficult to find suitable best practice strategies since we are still at the early stages of 5G with few benchmarks available.

Knowledge sharing, building industry partnerships, and greater funding for innovation may help overcome these challenges.

But these barriers in no way indicate that 5G will not work.

On the contrary, Miss Quah said: “I envision that 5G will eventually drive the much anticipated innovative end to end services that have the potential to transform the world as we know it.”

Want more 5G insights?

Join 5G market and investment expert Sachin Mittal from DBS Bank at our first free digital event, ‘Inside Asia – Technology & Market Next Moves’, on 30 April at 11 am SGT.

You will get the chance to connect with a whole host of industry experts along with peers from across the world to explore the current state of the industry and future investment opportunities in 5G, data centers, cloud services, and more.

Watch Inside Asia – Technology & Market Next Moves on demand.

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Author

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Stuart Crowley

Editor, W.Media

stuart@w.media

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