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Community Blog What Can Malaysia's SMEs Gain from Cloud Technology?

What Can Malaysia's SMEs Gain from Cloud Technology?

This article discusses the benefits that cloud computing offers to Malaysia's SMEs to positively generate sustainable growth today.

By Avanti Kumar

Akin to small and medium businesses (SMEs) around the world, Malaysia sees its SMEs as highly significant contributors and catalysts of the nation's economy and societal progress.

According to the SME Corporation of Malaysia (SME Corp. Malaysia), the central coordinating agency under the Ministry of Entrepreneur Development and Cooperatives (MECAD), the country's MSMEs (micro, small and medium businesses) 'form the backbone of the economy, representing 97.4% of overall business establishments in 2021'. SMEs contributed 38.2% or more than RM512.8 billion to the country's GDP last year.

Although pandemic related lockdowns are gradually being eased, SMEs face an uphill task in surviving and reinventing themselves for growth. Today's fragile global scenario includes challenges such as reduced capacity, staff and skills shortages, increasing costs, and supply chain disruptions.

How SMEs can Empower Themselves

As we noted in an earlier article Why Businesses Should Adopt Cloud Computing, in sync with the world's near seismic shift towards digital solutions in today's fragile, highly challenging environment, Malaysia is dialling up the use of digital technologies to counter such challenges and to act as a critical catalyst on the path to solid economic recovery and growth.

However, as reported in local media, the country's SMEs face difficulties in transitioning to digitalisation - with 77% still at the basic stage of the transformational curve.

In the endemic phase of COVID-19, cloud computing has been widely acknowledged as the foundation of the digital journey. Malaysia's public cloud market for example, which amounts to 3.63% of the total IT spending in the country, has already reached USD643.4 million, according to research site Twimbit. This makes Malaysia the second-biggest cloud market in ASEAN after Singapore.

A recent article opines that the coming of the internet has effectively turned small businesses into 'micro-nationals'. A global market is now instantly available through the use of technologies such as an eCommerce trading platform, a web presence. There are more than 150 million of these businesses in the world, employing more than half a billion people.

Primary providers such as Alibaba Cloud have enabled the smallest businesses to trade as effectively as a large enterprise. This has allowed such businesses to take full advantage of the services offered by logistics firms, as well as more efficient marketing, ordering and shipment capabilities, even with small numbers of staff - sometimes by just one or two employees- as such linked services are offered by eCommerce trading platforms.

The widening acceptance of online payments, from credit cards to cryptocurrencies, together with the declining costs of internet facilities, from data and storage to web design, hosting and platform access are additional drivers.

However, the use of technology and a reliable connectivity infrastructure need to be energised by a changing mindset, a type of leadership that embraces and champions digital skills and services.

Primary Providers, Scaling Up

Realising the full potential of gains from the use of cloud technologies means turning to primary providers like Alibaba Cloud, which will immediately connect you to comprehensive services - including core web hosting, site building, eCommerce, and promotional services - that will help SMEs reach global markets. You can find products ideal for all enterprise application requirements, like easy-to-use high-performance SSD virtual servers to host your business at a low cost, along with informative courses and dedicated support for these services.

Let's talk briefly about using top technologies to scale up: SMEs can build up platform capacity and gain new features seamlessly by the adroit use of robust cloud solutions such as -

• Upgrading seamlessly to Elastic Compute Services to match growing business demands.

• As you scale, a seamless user experience is key for your customers. There are three core cloud technologies to help achieve this: Auto Scaling technology, available free of charge; Server Load Balancer, to help improve your website capabilities; and CloudMonitor services to help you stay on top of the status of your cloud services and respond appropriately to any instances.

This linked article goes into further detail of other end-to-end digital services (such as security services, access management and so on), which will help a small business compete on the same level as a large enterprise.

An ebook, Scaling Up: E-Commerce and Alibaba Cloud for SMEs is also available, which tracks a fictional SME that has set out to scale up and diversify its business.

Where Alibaba Cloud Comes into Play

A key player in strengthening Malaysia's startup ecosystem, Alibaba Cloud's contributions started back in 2017 when Alibaba Cloud opened operations of its first global public cloud platform to deliver cloud-powered services, with special focus on assisting Malaysia's SMEs and entrepreneurs.

Furthermore, the Alibaba Cloud Innovation Centre Kuala Lumpur (ACICKL), reportedly the first of its kind outside China, was launched in 2021 to encourage transformation among local SMEs, startups and talents through a comprehensive set of services and capabilities. Tham Lih Chung, Executive Director of Handsprofit Sdn Bhd, a local partner of Alibaba Cloud and operator of the ACICKL, said, "Digitalisation is always perceived as complex and costly. Yes, it is true if you do not have the right knowledge and guidance. Alibaba Cloud Innovation Centre's mission is to support local businesses in their digital adoption process via mentorship, technological expertise, networking opportunities, events and workshops - all under one roof."

Examples of support include the annual Alibaba Cloud AsiaForward Startup Day, a free interactive knowledge exchange session, which offers leading Southeast Asian startups of all stages, leading venture capitalists (VCs) and notable Malaysian startups to discuss the opportunities in the region's hottest sectors such as fintech, robotics, artificial intelligence and eCommerce.

This is followed by a series of Alibaba Cloud DemoDay, which gives local startups and new SMEs a platform to pitch fresh business ideas to a panel of VCs and stand a chance to win coveted technology-driven prizes to propel their businesses forward.

New Horizons, New Growth

IDC's recently released Top ICT Predictions 2022 paints a picture of a regional shift to digital-first strategies resulting in at least 65% of Asia/Pacific's GDP being digitalised by 2022. The research further envisions that one in three companies will generate more than 30% of their revenues from digital products and services by 2023.

Writing in his expert opinion piece, Kun Huang, General Manager of Malaysia, Alibaba Cloud Intelligence, confirms that the use of digital tools has made cloud computing a mega trend in recent years. "Cloud computing offers tremendous benefits for startups in various ways. A huge advantage of cloud computing is the reduction in hardware costs. Previously startups require a large upfront investment in on-premises IT infrastructure and skilled workers."

"Cloud also enables a pay-as-you-go and pay-as-you-grow investment strategy which makes it much easier to invest in cloud computing that automatically adjusts the resources as per the user's needs and thus promotes low-cost computing."

He cites the example of ClicknCare"a local startup that provides teleconsultation services connecting Bangladeshi workers with doctors has deployed cloud computing. With cloud technology, the business has made it possible to cater a website where users can book online video calls with certified doctors, while Bangla-speaking agents help patients with the delivery of medicines and other needs. The flexibility of cloud adoption has filled the gap in Malaysia's digital health by connecting doctors and patients in many emerging countries, which previously was impossible."

Another local example from last year, is the collaboration between Alibaba Cloud and Sarawak Digital Economy Corp Bhd (SDEC). SDEC CEO Sudarnoto Osman explained that the aim of digitalising Sarawak's SMEs will help local businesses to 'achieve business agility, elasticity and scalability in a better way and optimise the cost for information technology management by maximising Alibaba Cloud's proven technology.'

"SDEC's vision is to accelerate economic prosperity through digitalisation. As a state linked company, we need to synergise our efforts with all stakeholders towards accelerating the adoption of digitalisation among local SMEs," added Osman.

Pivoting to a digital first strategy may be accelerated by taking advantage of the paths offered by primary providers. For example, the ACICKL has set out to train 30,000 local professionals by June 2022 as part of Alibaba Cloud's initial commitment to building digital talents and supporting business development and digitalisation in Malaysia.

This is especially significant, as noted in a previous article entitled Top Cloud Technologies to Look for in Malaysia. The state-of-the-art capabilities and capacities used by larger companies are now within reach of small companies with startup resources and budgets.

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