Value Creation in the Multi-Cloud Ecosystem in Malaysia

by Weng Yew Wong, Board of Management at DE-CIX

In today’s day and age, most companies in Malaysia have already started their journey to integrate the cloud into parts of their operations, or at least have started thinking about it. But many fail to take into account the importance of how they connect to clouds – and this makes all the difference.

According to an IBM Institute for Business Value (IBV) survey, business executives in Malaysia are increasingly planning to invest in hybrid multi-cloud platform strategies and capabilities to drive business transformation and unlock value. If properly set up, a multi-cloud ecosystem can add value for all stakeholders – from the big cloud hyper-scalers to niche and regional cloud providers to big and even small enterprises and ultimately even to the end customers.

But it’s not enough simply to have cloud services: robust and secure connectivity to the clouds and between the clouds being used is also essential. Connecting a company’s network directly with the cloud provider’s network, bypassing the public Internet, has multiple benefits: not only is the connection – and thus the data travelling through it – protected against malicious attacks, but also the direct connection means that the data doesn’t have to travel so far. Because the further data needs to travel, the slower the response time will be, causing the lag that we sometimes experience on long-distance video calls and conferences, for example. We call this delay – the time it takes for a data packet to travel from a device connected to the Internet, such as a smartphone, to a server in the Internet, and back again – “latency”: The lower the latency, the faster the response, and the better the performance of cloud applications and ultimately the user experience. This is also the case when data needs to move from one cloud service to another. By routing the data directly between the two cloud service providers by using a cloud router service, the clouds can communicate with each other (cloud-to-cloud communication) at the lowest possible latency, ensuring there is no loss of data or reductions in app performance due to delays.

Currently, even regional market players are collaborating with various organisations to provide enhanced connectivity to cloud-based solutions. This can be seen in the partnership that was established between DE-CIX Malaysia and BasicBrix Cloud Pte Ltd (Singapore) to provide connectivity to cloud-based services and offer a wide range of cost-effective, secure cloud and infrastructure services to Malaysian companies.

Complex IT landscapes and the cloud jungle
The demands being placed on IT departments are becoming increasingly complex. It’s a matter of making clever use of a wide variety of on-premise and cloud-based resources, providing interfaces for a diverse range of services or cleverly integrating them into internal systems, and managing a network that can handle all of these challenges while also incorporating connectivity to partners and suppliers.

The recent pandemic years, in particular, have accelerated this trend. Remote work concepts had to be implemented very rapidly, and many digitisation projects in Malaysia were accelerated. Above all, the associated run on the cloud is not slowing down. In fact, virtually all companies use cloud services in one form or another.

The IBV survey also reveals that by 2023, organisations in Malaysia are expected to be using an average of 9 cloud services per organisation, from a growing number of vendors. However, only 29% of businesses have a holistic multi-cloud management strategy in place today.

While Malaysian companies are only allocating 19% of their IT expenditure to the cloud, the survey shows that they plan to increase the share of spend on hybrid cloud from the current 36% to 46% by 2023.

Putting all your eggs in one cloud basket?
Given the complexity of managing hybrid and multi-cloud scenarios, it is not surprising that IT departments like to put all their eggs in one cloud basket and obtain data, applications, and other resources from just one provider. But this focus on just one cloud carries significant risks.

If you rely on just one cloud partner, you inevitably create a “single point of failure” – after all, even the biggest tech companies are susceptible to experiencing widespread outages. Especially in the financial industry, the discussion about regulation of the “Cloud Concentration Risk” is in focus.

For example, the globally-acting Financial Stability Board (FSB) is concerned that the rapid acceleration of digitalising the banking industry could “magnify the impact” of operational vulnerabilities. But, simply put, no company should put all their eggs in one basket when it comes to the cloud. It is always better to adopt a multi-cloud strategy in order to better distribute potential risks.

Multi-cloud creates flexibility and added value but is complex to manage
Additionally, when it comes to the return on investment (ROI), respondents of the IBV survey viewed that the value derived from a full hybrid, multi-cloud platform technology and operating model at scale is 2.5 times the value derived from a single platform, single cloud vendor approach.

Therefore, it is important to recognise that in this context, it’s not THE cloud, but a variety of different cloud services. It can become quite confusing and complex in order to ensure smooth interplay.

A multi-cloud approach allows for more resilient infrastructures to be built and it also has the added advantage of avoiding vendor lock-in. But this comes at a price: Such ecosystems are more complex than a centralised approach and only work if the various cloud resources, SaaS offerings, and connectivity to in-house data centres work together harmoniously. The solution is to be found in the optimization and automation of cloud connectivity.

Automated interconnection, the key to simplifying the cloud
To make the management of many clouds as simple and seamless as managing one cloud, companies need the help of an interconnection specialist, such as DE-CIX, which is the world’s leading operator of Internet Exchanges. The booking and scaling of cloud connectivity services need to be easy, something which DE-CIX achieves with their automated self-service portal and DE-CIX API, which enables the company’s own tool chain to manage the connectivity. Furthermore, using an interconnection specialist and a Cloud Exchange to enter the cloud means that a company has a direct connection to a wide range of cloud resources, bypassing the public Internet, and thus improving performance and security. At DE-CIX, for example, as many as 50 clouds can be integrated, and in addition, the Microsoft Azure Peering Service ensures a direct, high-performance connection to Microsoft’s cloud-based Office applications.

To make it even easier, the DE-CIX CloudROUTER service, for example, enables the chosen clouds to communicate directly with each other, avoiding the need for data to travel back to the in-company infrastructure and only then on to the other cloud. This reduces the latency and thus increases the performance between clouds, and also reduces the costs for data transit, as the data pathways are much shorter. Because the DE-CIX CloudROUTER is set up directly on the DE-CIX platform, there is no need to purchase additional hardware, and the implementation and scaling of the service are automated and ready in minutes. The service offers guaranteed latency, bandwidth, and predictability for centralized routing between public and private clouds. In the case of a hybrid-cloud setup, it is possible to access the DE-CIX platform and connect the in-company data centre to the multi-cloud environment.

Even though we always like to talk about THE cloud, we should not forget that there is not only one. For resilience reasons, to avoid vendor lock-in and to map individual use cases, companies are well advised to source services from multiple vendors. In doing so, it is important to remember that the way you connect to a cloud is critical. Direct interconnection over an Internet and Cloud Exchange, avoiding the public Internet and using the shortest pathways to the cloud, offers the most robust and secure cloud connectivity. As an added advantage, it can also make it easier. – Data & Storage Asean