Data centres: Ctrl + Alt + Deploy

AS of May this year, at least 30 colocation data centres have been set up in Malaysia with a majority found in Kuala Lumpur and Johor housing the fastest-growing market in the country to date.

The latter is an example of the rapid growth of data centres in the country; the numerous vacancies being advertised for the positions of operations and technical engineers in various companies based in Johor Baru, Iskandar Puteri, and even Kulai, is just a sliver of a showcase of Malaysia’s preparedness to be among the largest data centre hubs in the region. It is an environment which draws new investments into the industrial needs of data centres; it was reported that data centres in the country produced RM114.7bil in approved digital investments between 2021 and 2023, spurring the creation of almost 40,000 jobs.

(Also known as “carrier hotels”, colocation data centres are large data centre facilities that rent out rack space to third parties for their servers or other network equipment.)

In the grand scheme of things, cloud computing is the name of the game and Malaysia is levelling the playing field.

Tech giants, including Google Cloud, Amazon Web Services (AWS) and Microsoft Corp, have all announced plans since two years ago to invest billions of dollars to galvanise the cloud infrastructure in Malaysia.

For instance, AWS is planning to invest up to US$6bil (RM28.16bil) until 2037, signifying its long-term plan for the country.

But will Malaysia be able to meet the expectations of such large and lofty goals?

The Malaysia Digital Economy Corporation (MDEC), which is part of Malaysia’s Data Centre Task Force (DCTF), says the country has what it takes to shore up the endeavour.

“The country is home to a skilled and proficient workforce, particularly in IT and engineering, ensuring that the industry has access to the expertise necessary to thrive,” Mahadhir Aziz, MDEC CEO, says in a recent interview.

The human factor

There is a misconception that the operation of data centres does not require a hefty workforce as they involve computerised processes. However, in reality, the industry in Malaysia especially is generating a diverse array of job opportunities across multiple disciplines throughout the entire lifecycle of a data centre.

Mahadhir says data centres are fundamentally engineering-driven enterprises, with a wide range of engineering roles required during various phases, including design, planning, site acquisition, construction, fit-out, testing, and commissioning.

“These roles span civil, electrical, cooling, mechanical, fire mitigation, and physical security engineering.

“During the operational phase, additional roles emerge in facilities and data centre management and operations to ensure smooth, sustainable operations and address any potential issues that arise.”

Beyond the technical realm, Mahadhir points out that data centres also require a variety of nontechnical roles in project management, human resources, finance, procurement, legal and compliance, and environment, health and safety (EHS).

“As businesses, data centres also necessitate the usual senior management roles, client services, customer training, sales and marketing, public policy, corporate affairs, and more.”

And at the core of every data centre is the ICT infrastructure, which creates numerous job opportunities in ICT operations and management, as seen in data centres run by major cloud service providers such as Microsoft, Google, and AWS.

“While the ICT infrastructure may belong to the client rather than the data centre company itself, these roles are critical and abundant.

“Just like the engineering side, the ICT infrastructure follows distinct phases of design, planning, staging, deployment, testing, and commissioning of physical equipment like servers, storage, networking, and cybersecurity systems, as well as management monitors or sensors, security operations centres, and network operations centres,” Mahadhir says.

And when it comes to software, the phases apply to operating systems, virtualisation, hypervisors, containerisation or software process, middleware, application software, automation, and management systems.

Opportunities abound since ICT systems have short life cycles with equipment replacement usually taking place at least every three years, which Mahadhir says leads to recurring loops of planning, staging, deployment, testing, and commissioning throughout the life of a large data centre.

“Similar to the engineering roles, the ICT side also encompasses nontechnical roles in project management, human resources, finance, procurement, legal and compliance, and EHS.

“Once operations commence, there are critical roles in systems, network and cybersecurity administration, client or managed services and customer support, all of which are essential for maintaining the seamless operation of the data centre and ensuring client satisfaction.”

Manufacturing the future

From construction to procuring generators, among others, the growth of data centres runs in line with a significant boost to the manufacturing sector which is crucial in catering to the industry’s development.

“The expansion of data centres in Malaysia is poised to generate significant indirect job opportunities across various sectors, including manufacturing, construction, and logistics.

“The growing demand for materials, components, and technology necessary for data centre construction and maintenance is expected to provide a substantial boost to local manufacturing industries,” Mahadhir says.

Malaysia’s greatest opportunity now lies in attracting investments from manufacturers of critical equipment essential for the construction and operation of data centres, along with their associated support services.

For example, Mahadhir says data centres typically rely on diesel generators for backup power in the event of power supply failures. In illustrating a potential situation, he says a hyperscale data centre with a capacity of 100MW (megawatts) may require approximately 52 units of 2MW gensets.

“With data centres currently under construction in Johor demanding nearly 2,000MW of power, there is a need for over 1,000 gensets.

“This substantial demand creates a compelling case for establishing local assembly or manufacturing facilities, not only for gensets but for all other M&E equipment required by data centres.”

On the IT front, companies such as Taiwan’s Wiwynn and the United States-based Supermicro – both established in Johor – manufacture servers and AI servers, laying a strong foundation for further growth.

“However, this is just the beginning. There are numerous other companies within the global supply chain that Malaysia can engage with, building on the country’s existing strengths in the semiconductor industry and the burgeoning data centre sector to create a comprehensive, end-to-end supply chain ecosystem,” Mahadhir says.

Furthermore, there is growing interest among submarine cable constructors following the mushrooming of data centres.

“With the Transport Ministry’s exemption from cabotage for submarine cable deployment and repair, there is increasing interest in landing cables in Malaysia. Enhanced international connectivity through these submarine cables will bring its own set of spillover benefits,” he says.

The ripple effect

Data centres are relatively new in Malaysia, says global sustainability consultancy firm ERM’s partner Pirabagaran Balasingam.

But as the industry matures, Pirbagaran says it can potentially spur innovation and research and development in the manufacturing sector, as he paints a picture of the mechanism behind the spillover effects.

“Apart from boosting the manufacturing industry, various sectors such as logistics, transport, and other support services like ours can also benefit from the expansion indirectly.

“From my experience in ERM, as a global sustainability firm, demand for assessments and solutions based on renewable energy and energy efficiency, to name a few, exists in the market, as investors are increasingly looking into reducing their environmental footprint.”

Echoing Mahadhir’s views, Pirabagaran says the construction sector will particularly enjoy a positive ripple effect made by the expansion of data centres.

“There will also be a demand for servers, storage devices, cooling systems, power supplies, and other specialised components.

“If data centre developers opt to source this equipment locally, it could lead to an increase in production and demand in Malaysia’s manufacturing sector, including strengthening the local electrical and electronics industry.”