by Mathivanan Venkatachalam, Vice President of ManageEngine
Malaysia’s economic forecast for 2024 shows growth potential, as the International Monetary Fund (IMF) predicts a 4.3% uptick. This optimistic projection is underpinned by strong domestic demand and substantial public spending efforts. However, economists caution against potential hurdles such as geopolitical risks and looming recession concerns, which may impact Malaysia’s economic trajectory.
Recognizing these challenges, the Malaysian government has proactively embraced a digital-first strategy. By dedicating up to a staggering RM 150 billion to digitalization initiatives, they aim to strengthen the economy’s resilience. This includes initiatives like modernizing the public sector, empowering small and medium businesses through the Economic Stimulus package, and fostering wider digital adoption across industries.
Where are Malaysian organizations focusing their investments?
To align with these initiatives, organizations are focused on technology adoption to drive digital outcomes. This is reflected in the IT spending trend of the Asia-Pacific region, which is expected to grow by more than 8% in 2024. In Malaysia, the focus of IT spending is on technologies that will directly enhance the digital experience, powered by initiatives like MyDigital and MDEC.
Let’s take a look at some of the technologies shaping the Malaysian tech adoption landscape.
- Infrastructure modernization
As Malaysia strides towards 80% 5G coverage by the end of 2024, businesses are racing to modernize their applications and infrastructure. This drive towards 5G demands a shift to modern architectures—like hyper-converged infrastructures, containers, and microservices—which would enable organizations to capitalize on the enhanced capabilities 5G provides. However, this shift brings its own set of challenges: increased complexity leading to container sprawl, as well as quicker release cycles, heightening the risk of failures. To overcome these hurdles, organizations are bolstering their strategies with vigilant monitoring, agile management solutions, and strategic automation, ensuring stability and efficiency in their rapidly evolving digital landscapes.
- AI
According to the AI readiness survey by Cisco, 97% of the Malaysian organizations surveyed feel urgency from their CEO and leadership teams to deploy AI as part of their business operations, but only 13% of them are fully prepared to deploy and leverage AI. Nevertheless, with a push from the government through the Centre for AI Innovation (CEAI), organizations are increasingly taking measures to incorporate AI into their business ecosystem. This includes measures like preparing their infrastructure to handle the demands of AI workloads, upskilling their workforce to be AI-literate, and partnering with solution providers to implement tailored AI practices that drive efficiency and innovation within their operations. Additionally, the establishment of AI governance and a nation-wide code of ethics will solidify trust and build a responsible foundation for AI adoption.
- Cloud
As companies increasingly adopt digital innovations like generative artificial intelligence (GenAI), they will require cloud computing resources and infrastructure to expedite and sustain business expansion. This aligns with the momentum in the Asian-Pacific region, where organizations are expected to spend a substantial USD 83.1 billion on public cloud services by 2027. Malaysia—with AWS launching their regional cloud in the country and committing to invest USD 6 billion by 2037—is poised to provide businesses with scalable and secure cloud solutions. Furthermore, as part of the government’s comprehensive Digital Economy Blueprint and the MyDigital initiative, Malaysia has established formidable partnerships with renowned cloud service providers (CSPs) and has made significant investments in developing hyper-scale data centers and cloud infrastructures. The intention of businesses to adopt the cloud serves as a pivotal mediator between the technological, organizational, and environmental (TOE) factors influencing their decision-making process and the actual usage of cloud services. Deploying cloud services tailored to each business’ specific needs will allow them to maximize the utilization of their intangible assets, such as data analytics, customer insights, and digital capabilities.
- Adopting a security-first approach
With 5,917 incidents reported in 2023 and ranking as the 8th most breached country globally (over 494k accounts were leaked in 2023), Malaysia finds itself at a significant crossroads in the persistent fight against cyber malfeasance. With the government allocating RM 60 million to CyberSecurity Malaysia to tackle these cyber threats, organizations have begun taking a proactive approach to security by integrating security measures into every stage of their digital transformation journey. Some of the key areas where businesses are keen on increasing their spending include compliance, data protection and privacy, and security measures for networks, infrastructure, applications, and the cloud.
Overcoming hurdles in technology implementation
While investment in these technologies seems promising, organizations are facing several challenges with adopting and implementing the same. These challenges include establishing robust data governance policies to support modernization efforts, navigating vendor lock-in and rightsizing issues, dealing with fragmented and unstructured data, a lack of skilled professionals, and the proliferation of interconnected devices (which increasingly empowers insider threats). Without a strategic plan in place to manage these challenges effectively, the substantial investments being made could yield minimal returns. Additionally, organizations are increasingly shifting towards a predictive approach to IT, recognizing the need to anticipate and mitigate potential issues proactively. This transition reflects a demand for a forward-thinking mindset, crucial for organizations to derive maximum value from their technological investments and remain competitive in Malaysia’s dynamic digital landscape.
Here are three strategic recommendations for Malaysian organizations to integrate these technologies into their business practices successfully:
- Organizations should first evaluate how the technology fits into their strategic goals. Following this assessment, they should allocate their budget and resources effectively to technologies that directly support their business objectives.
- Prioritize investing in training programs to upskill the workforce, enabling them to leverage the new technologies effectively. Additionally, it is crucial to acquire a comprehensive tool that integrates AI-driven analytics for data governance, cybersecurity, and compliance.
- Finally, organizations should consider integrating full-stack observability tools to gain a comprehensive view into their multi-tiered, distributed modern infrastructure. This will enable them to swiftly identify and resolve issues, minimize downtime, and ensure uninterrupted user experience.
Furthermore, precision in segmenting and optimizing the IT budget is paramount for success. Through a relentless commitment to evaluating technological investments and operational expenses, pinpointing opportunities to refine processes, eradicating inefficiencies, and amplifying resource utilization, organizations can wield their financial resources effectively. By meticulously segmenting the IT budget, funds can be directed precisely to areas that yield the highest value and closely align with strategic objectives. This proactive management approach not only ensures efficient resource allocation but also magnifies the return on investment for technology endeavors. It lays the groundwork for organizational resilience, adaptability, and competitiveness in Malaysia’s transforming digital landscape, heralding a future defined by innovation and sustainable growth.
