VADS to build more data centres [New Straits Time (Malaysia)]
(New Straits Time (Malaysia) Via Acquire Media NewsEdge) KUALA LUMPUR: VADS Bhd, a wholly-owned unit of Telekom Malaysia Bhd, may build up to five large data centres in Malaysia over the next three years, as it anticipates more demand for its services.
"We are still in the planning stage. So far, the location of the data centres and their size have yet to be finalised. But the plan is to build three to five larger scale ones in Malaysia over the next three years," said chief executive officer Ahmad Azhar Yahya in an interview recently.
A data centre is a facility used to house computer systems and associated components, such as telecommunications and storage systems. It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (e.g. air conditioning, fire suppression) and security devices.
Currently, the company has 14 data centres in the country, comprising over 150,000 sq ft of space in total.
While the size of each of the new data centres have not been finalised, Azhar said that a larger-scale data centre could be in the range of tens of thousands to over 100,000 sq ft.
"Demand for cloud computing and data centres are expected to grow significantly over the near to medium term.
"It is possible that our data-centre business, which is a part of our ICT business, will one day become the company's largest revenue contributor," said Ahmad Azhar.
Findings by Gartner, a research firm, appeared to back Ahmad Azhar's optimism on potential demand growth for data centres.
In Gartner's research, it expects hardware spending in data centres globally will climb to US$106.4 billion (RM323.46 billion) in 2012 and US$126.2 billion (RM383.65 billion) in 2015, from about US$87 billion (RM264.48 billion) in 2010.
Data centres have been existing for many years and demand is mainly driven by the bigger-sized enterprises or multinational corporations.
However, thanks to cloud computing, small- and medium-sized enterprises will soon be directly and indirectly taking up capacity on data centres.
Cloud computing allows a person to get access to a program, software or application installed somewhere rather than on the computer which the person is using.
Simply put, the applications, programs or softwares live "in a cloud" on the Internet rather than being installed on a person's hard drive. In a business point of view, companies need not be burdened by heavy capital expenditure on expensive servers so that it can used in a particular application ... instead, it pays the cloud service provider a fee for the rights to use the application over a duration.
"Small- and medium-sized companies, wanting to compete better and manage their cost better, will be moving towards cloud computing. This trend would create demand for data centres," said Ahmad Azhar.
Currently, the company has two main core businesses - ICT and business process outsourcing.
ICT business includes data centre services and cloud computing services.
Based on the full-year ended December 2011, VADS reported a revenue of over RM847 million, a seven per cent growth against the RM792 million in 2010. ICT and BPO have equal revenue contribution.
Ahmad Azhar said both core businesses are growing equally strong.
Although revenue has been steadily improving ever since it was listed in 2002 (and delisted in 2009), Ahmad Azhar said the company's full potential is yet to be unleashed.
This was because a big bulk of its revenue came from servicing its parent company Telekom Malaysia. As at last year, just over 50 per cent of its revenue came from external sources.
"This is something we are seriously looking into. We aim to increase our external revenue signi-ficantly moving forward," he said without going into further details.
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