For many years, Malaysia was ignored by the data center market. Malaysia is a relatively small country in South East Asia, and hyper scalers showed little interest in building there. As a consequence, Malaysia had to take the initiative.
During a recent DCD>Talk, we sat down with Wan Murdani from the Malaysia Digital Economy Corporation (MDEC) to discuss how Malaysia moved from being overlooked to being ranked 22nd in the world and second in ASEAN by the Arcadis Data Center Location Index.
According to Murdani, progress did not commence until 2010, when the government was effectively persuaded that data centers were a crucial component of their four-pillar national economic transformation plan.
“We had nothing back then; there were no hyperscalers or significant investments in data centers. However, we demonstrated to the world that the government is committed to attracting this investment, as Murdani explained.
With government support, MDEC was able to initiate the process of conducting due diligence on the requirements that investors would seek when entering new markets.
“From there, we determined which locations are sufficiently prepared to be positioned as potential investment locations,” Murdani explained. This is where we received support from telecommunications companies, connectivity providers, energy providers, and state administrations.
MDEC has addressed three aspects in order to put Malaysia on the data center map.
Malaysia’s ability to demonstrate that there was a demand for digital infrastructure has never been an issue. Murdani reports that there are at least 440 million Internet users in ASEAN, and that the digital economy’s GDP is approximately $3 trillion. Malaysia can therefore export digital infrastructure services to neighboring countries that contribute to this enormous quantity.
Murdani explains, “We are tasked with focusing on three primary areas.” “The primary objective is to attract digital investments. Therefore, we are the foremost Investment Promotion Agency (IPA) for digital investments. The second objective is to assist native businesses in penetrating the regional market. The third factor is global talent. Consequently, these three factors are crucial for driving the economy.
MDEC hopes that “digital economic activities” will contribute about 25 percent to the national GDP.
“When we first began promoting this type of investment, people questioned us and argued that we were not bringing high-paying jobs,” Murdani admitted. “I believe it was appropriate at the time because there were no direct jobs to be generated by these types of investments. However, more indirect positions are created.
“For instance, if you’re bringing one thousand servers into Malaysia, you’ll need people to refresh the servers, as well as engineering services and organizations that can meet the mechanical and electrical needs of the data center. Certain developers are required to develop product services that rely on a data center. These are the intangible employment that were not part of the initial investment, but the ecosystem has been created for us to drive these types of positions.”