Oracle: US$6.5 bil investment in Malaysia ‘more than a data centre’ - Relevant News

Oracle: US$6.5 bil investment in Malaysia ‘more than a data centre’

Oracle has 85 cloud regions around the world and is planning to build another 77. (Photo by Oracle)

KUALA LUMPUR, 27 NOVEMBER 2024 — MALAYSIA’s push towards digitalisation is drawing keen interest from global tech giants, with Amazon Web Services Inc (AWS), Microsoft Corp, Google and Oracle Corp committing a combined investment of US$16.9 billion (RM75 billion) through to 2038.

These investments reflect Malaysia’s position as an emerging hub for regional cloud infrastructure, signalling its potential to become a gateway for Southeast Asia’s expanding digital economy. They also showcase Malaysia’s market opportunities within the context of a broader artificial intelligence (AI) and data centre development strategy across the region.

Oracle Corp, in particular, had last month announced a massive investment plan of over US$6.5 billion to set up its first public cloud region in Malaysia, making it the latest major investment by a global tech giant in the country.

It was reported that Oracle’s initiative is poised to be one of the largest — if not the largest — single tech investments to date in Malaysia, surpassing the US$6.2 billion that AWS announced last year.

In an exclusive interview with The Edge, Oracle Japan & Asia-Pacific senior vice-president for technology and customer strategy Chris Chelliah says this cloud region isn’t just another data centre in Malaysia. Instead, it involves multiple data centres working together, ensuring redundancy and scalable resources. This way, businesses can get the services they need without the delays that come from having everything in one place.

“The cloud region is more than just a single data centre. To us, there is a clear distinction. You can think of a data centre as a four-wall apartment, while a cloud region is more like the electrical appliances that make the apartment liveable. In other words, you could say that our cloud region is a tenant of the data centre.

“We are a platform provider, not a data centre owner. So, if you think about it, all our US$6.5 billion will be allocated to building cloud facilities, not data centres. Whereas other companies are talking about billions of investments, including the cost to build a data centre. This really shows the magnitude of our investment commitment in Malaysia,” he says.

Oracle Malaysia managing director Fitri Abdullah highlights that the group intends to create infrastructure that supports the digital transformation of businesses in Southeast Asia.

“A cloud region helps us deliver cloud services with low latency and high availability, which means companies can run efficiently and securely. This investment reflects the growing demand for cloud and AI services in the region,” he explains.

Given that every industry has different needs for digital transformation, Fitri says Oracle’s cloud region will be flexible enough to serve sectors such as finance, healthcare and manufacturing.

Moreover, it will also enable Oracle’s Malaysian clients — including government agencies and companies in the airline and hospitality sectors — to access cloud services hosted locally, rather than relying on external providers.

“We plan to engage with our customers to understand their needs, so we can offer solutions tailored to their specific challenges. Moving to cloud computing is essential for businesses that want to stay competitive.

“Our investment in the cloud region in Malaysia is about making this transition easier, giving businesses a solid foundation for adopting digital technologies. We believe our cloud solutions will open new doors for growth and innovation,” Fitri elaborates.

Third in Southeast Asia

For perspective, Oracle has 85 cloud regions around the world and is planning to build another 77, which is more than all the three hyperscalers, namely Google, Microsoft and AWS, combined.

Nevertheless, Malaysia will be equally important as compared to other cloud regions, says Chelliah.

“With our 36 years of history in Malaysia, a key reason for establishing a cloud region here is to serve our clients better. In fact, over the past eight years, Oracle Malaysia’s clients have been migrating to the cloud. This latest investment in the cloud region will enable us to provide more cutting-edge features to them,” he explains.

Currently, Oracle has 12 cloud regions in Japan and Asia-Pacific, two of which are in Singapore. Thus, the upcoming Malaysian public cloud region will be its third in Southeast Asia.

“By putting our cloud region in Malaysia, we’re not just serving local clients; we’re aiming for businesses all across Southeast Asia. Our goal is to create a seamless experience for our customers, so they can access a range of cloud services that are reliable and efficient.

“With each data centre in the region contributing to this ecosystem, data stays close to where it’s needed, cutting down on latency and improving performance,” Chelliah reiterates.

Fitri says Oracle aims to support small and medium enterprises because they are crucial to Malaysia’s economy. “Our cloud solutions are designed to help these businesses compete with larger firms. By making advanced technologies accessible, we hope to fuel innovation and growth among SMEs.

“Our investment in the cloud region shows we’re confident in Malaysia’s growth potential. We want to support local businesses on their digital transformation journeys, providing the tools they need to succeed in an ever-changing technology landscape,” he continues.

Fitri adds that there is a lot of potential for growth in Malaysia’s cloud computing market, and Oracle’s cloud region is built to meet that demand, offering flexible solutions that match modern business needs.

“As we move forward, we expect to see more companies eager to adopt cloud and AI technology for their growth strategies. We’re looking forward to what lies ahead with our cloud region in Malaysia.

“The infrastructure we’re building is meant to drive digital transformation across various sectors, helping businesses innovate and thrive. Our investment shows we believe in Malaysia as a technology hub in Southeast Asia,” he stresses.

Meanwhile, Chelliah acknowledges the importance of security, and hence, Oracle’s cloud region will have advanced measures in place to protect sensitive data. “We know that businesses need to feel secure about their data, so we’ve built our cloud architecture to meet both local regulations and international standards.”

Texas-headquartered Oracle is a US multinational computer technology company specialising in database software and cloud computing.

According to Chelliah, building a cloud region is not just about the infrastructure, but also about the software and services that empower businesses.

“We want to make it easier for our customers to focus on what they do best while we handle the complexities of the cloud. Oracle’s strength in databases is a huge advantage for us. It gives us synergies when we offer cloud services.

“Our database technology allows us to deliver robust data management solutions that are essential for businesses moving to the cloud. This expertise is what sets us apart from our competitors,” he says.

When asked, both Chelliah and Fitri declined to speculate on the economic impact that will be generated by Oracle’s investment, although they expect this project to create thousands of jobs in Malaysia.

“It’s not just about building data centres; it’s also about contributing to the local economy and helping develop talent. We’ll be collaborating with educational institutions to train the next generation of technology professionals,” says Fitri.

“Our vision is to create a space where businesses can use our cloud solutions to enhance what they do. By empowering local companies, we hope to drive innovation and growth across different sectors. The cloud region will be central to this, providing the necessary infrastructure for businesses to scale efficiently,” says Chelliah.

Over the past year, major players in the tech industry have also made significant investments in the region.

Notably, Microsoft announced cloud service investments totalling US$1.7 billion in Indonesia, while AWS revealed plans for an investment of US$9 billion in Singapore and US$5 billion in Thailand.

Meanwhile, Google recently broke ground on a US$2 billion data centre in Malaysia, which is expected to contribute over US$3 billion to the country’s economy by 2030.

As Southeast Asia positions itself as an important hub for digital transformation, the influx of investments from these tech giants signals not just a competitive landscape but also their belief in the region’s potential. However, only time will tell if the concerns and scepticism surrounding data centres and cloud regions — in Malaysia, particularly regarding their consumption of water and electricity — are justified.

The real test will be whether this growth brings lasting benefits to local businesses and communities, shaping a sustainable future for the region’s digital economy.

Source: The Edge