HSS Engineers eyeing partnerships with data centre specialists

Malaysia’s HSS Engineers Bhd is looking to kick-off the development of data centres in Malaysia and South-East Asia, as technology usage has surged post the Covid-19 pandemic.

Its executive vice chairman Tan Sri Kunasingam Sittampalam said the company is engaging with global specialists and is in an advanced talk with one of the parties involved.

“At least one of them is at the very final stage of discussion. They do work with Amazon.com Inc, Microsoft Corp and Apple Inc and they do not have a partner in this part of the world. We will sign a memorandum of understanding with them soon,” he said in a virtual press briefing after the company’s sixth AGM.

Sittampalam said that the pandemic has caused businesses to transition their operations online which has led to a high demand for data centres.

One of the key drivers for companies such as HSS Engineers to get into data centres has to do with the Singapore government’s recently imposed a moratorium on the establishment of new data centres, due to power and land shortage. “Neighbouring countries such as Malaysia and Indonesia can benefit from the spillover demand,” said Sittampalam.

“The sector in Malaysia is expected to experience revenue growth of more than US$800 million (RM3.3 billion) by 2030. In addition to this, industry statistics anticipate the data centre market in SouthEast Asian countries, such as Singapore, Malaysia, Indonesia and Thailand, to grow at 14 per cent compounded annual growth rate to US$3.5 billion in the next decade,” he said.

He added that the company is leveraging its project management consultancy (PMC) experience to directly pursue opportunities with Digital Nasional Bhd for the implementation of 5G technology in the country.

When asked if HSS Engineers is in talks with the government for 5G, Sittampalam said: “Actually, the government has called for a bid and we have participated in it. I cannot disclose further on it,” adding that the project consists of multiple stakeholders, project complexities and intensive resource requirements.

As such, it would require significant coordination in the implementation which is a scope similar to the group’s current role as DMO (delivery management office) for multiple projects under the Northern Corridor Implementation Authority.

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Tencent aims for tech domination with US$70bn ‘new infrastructure’ investment

Tencent, China’s tech giant, revealed it will invest US$70 billion in ‘new infrastructure’ over the next five years in the race for tech domination.

The world’s largest online gaming company plans to spend on cloud computing, big data centers and cybersecurity to compete with the likes of Alibaba Cloud and Amazon.

Tencent joins China’s ‘new infrastructure’ strategy to boost economy

Tencent’s announcement on Tuesday follows China’s ‘new infrastructure’ initiative to leverage on the country’s boom in demand for cloud services and upgrade digital infrastructures to enable growth.

The Senior Executive Vice President of Tencent, Dowson Tong, was quoted by Guangming Daily as saying: “Expediting the ‘new infrastructure’ strategy will help further cement virus containment success.”

China’s economy shrank by 6.8% in the first three months of 2020, ending almost 50 years of consistent growth.

Reuters reported Tencent’s investment will look to expand into business services, as consumer internet growth slows and companies shift number-crunching from their own computers to the cloud.

The WeChat creator’s shares grew by 2.5% after the investment announcement. This growth comes after Tencent saw a slower revenue increase of 22% in their FinTech and Business Services, including Tencent Cloud, in the first quarter of 2020 compared to 39% in Q4 2019.

Mr. Ma Huateng, the Chairman and CEO of Tencent, said: “So far, our businesses have proved resilient and cashflow-generative, enabling us to increase our investment to fulfill our mission of ‘Tech for Good’.”

Tencent’s online gaming revenue grew by 31% year-on-year to US$5.2 billion, and this may increase even more with Tencent’s move into cloud gaming.

Tencent takes on Alibaba Cloud

Tencent had 18% of China’s cloud market in the fourth quarter of 2019, grew by 111% globally and ranked as the third largest Infrastructure-as-a-service provider in Asia Pacific last year.

Tencent also became the first company with more than one million servers in China, the country with the second largest cloud market.

Alibaba Cloud commanded 46.4% of the Chinese market, making it not only the largest in China, but also the rest of Asia Pacific.

In a webcast, Daniel Zhang, Chairman and CEO of Alibaba Group, identified that the Software-as-a-Service market and wider ecosystem is more mature in the United States compared to countries like China where a developer ecosystem ‘is just starting to get going’.

The data intelligence backbone of Alibaba Group achieved a revenue growth of 58% year-over-year to US$1.7 billion in the first quarter of 2020.

Alibaba Cloud recently announced a US$30 million SME cloud adoption program along with US$28 billion worth of data center investments covering 21 regions, including Indonesia, Malaysia and Singapore to support digital transformation in a post-pandemic world.

Mr Zhang predicted the pandemic will further accelerate digital transformation of enterprises with industries like public sectors choosing to move to the cloud, despite concluding the fiscal year with a quarter impacted by the economic effects of the COVID-19 pandemic.

Tencent also expected to see accelerated cloud services and enterprise software adoption from offline industries and public sectors over the longer term.

Tencent’s US$70 billion investment will also focus on key sectors, including artificial intelligence, 5G networks, blockchain and Internet of Things operating systems.

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Cloud gaming is projected to grow by US$4.8 trillion worldwide and tech giants like Google, Amazon, Alibaba Cloud and Tencent are looking to take on established players in the gaming industry such as Microsoft, Sony, EA and NVIDIA as well as cloud gaming pioneers Vortex, LiquidSky, Parsec and Shadow.

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