Alibaba Cloud, the cloud computing arm of Chinese internet giant Alibaba Group, has seen increase in demand from various industries in Malaysia market, according to William Xiong, Alibaba Cloud Vice President and General Manager of Enterprise Service Cloud.

“We expect an increase in demand from various industries in the market. Our goal is to continue to serve more local customers to enable their digital journey as one of the leading cloud service providers in Malaysia,” he told TechNode Global in an interview.

“Malaysia has a very high willingness to embrace technology so we are going to put priorities here too,” he noted. “In fact, we started Energy Expert (Alibaba Cloud’s sustainability solution for enterprise) in this region first, in the Malaysia market. We recently see Agmo–a digital solutions specialist in Malaysia as our first international customer of EMAS Superapp solution to drive the EV evolution by adopting our cutting-edge technological superiority.”

He said Alibaba Cloud will continue investing in the market and develop and nurture the use of latest and advanced cloud computing solutions to provide customers the ability to take their business digital.

In recent years, Southeast Asia has become an important battleground for Internet giants from US and China which offer cloud computing services as they vie for dominance in the region which has seen rapid digitalization. Companies such as Google, Microsoft, Alibaba, Huawei, Amazon.com are investing heavily in cloud computing in Southeast Asia, building data centers, among other initiatives.

Amazon Web Services (AWS), the cloud computing division of Amazon.com announced in March it plans to invest $6 billion in Malaysia over the next 14 years to strengthen its cloud services infrastructure in the country. The infrastructure hub will enable customers in the region to store data securely, AWS said then.

In August last year, Google Cloud announced its plans to bring three new Google Cloud regions to Malaysia, Thailand, and New Zealand, to meet growing demand for cloud services in Asia Pacific.

In the same month, Tencent Cloud, the cloud business of global technology company Tencent, and Acclivis Technologies and Solutions, a wholly-owned subsidiary of CITIC Telecom International Holdings Ltd, announced that they have signed a strategic collaboration agreement to bring private, public and hybrid cloud and ICT solutions to enterprises in Southeast Asia and China.

In November last year, Huawei launched the Indonesia Region, a regional hub of Huawei Cloud’s 29 global availability zones. Huawei plans to spend $300 million on upgrading its local cloud infrastructure for the next five years, according to reports then.

Alibaba Cloud has built five global data centers during 2021 to 2022, according to earlier reports. The hubs in the Philippines, Thailand, and South Korea were built from scratch, while the firm added a third to an existing two in Indonesia and Germany.

Besides launching the innovation center in Malaysia, Alibaba Cloud said in 2021 that it plans to invest $1 billion in funding and resources within the next three years as part of its Project AsiaForward, which aims to foster one million digital talents, empower 100,000 developers and accelerate the growth of 100,000 tech start-ups across Southeast Asia and Hong Kong.

According to IDC, Southeast Asia is the fastest-growing cloud computing market and is expected to be valued at $40.32 billion by 2025.

This wave of interest is spurred by increased cloud reliance as more organizations acknowledge the long-term benefits of embracing the cloud. Governments in the region are investing in cloud computing to fuel digital transformation, which in turn drives greater innovation in the private sector, Telecom Review Asia wrote in a report last year.

Xiong, however, also shared some of the challenges Alibaba Cloud sees while expanding in Malaysia and the rest of Southeast Asia.

“Traditional IT enterprise mindset is our challenge. But the pandemic has served as the impetus for the acceleration of digitalization in Malaysia as well as the rest of Southeast Asia,” he said. “We have seen Covid-19 bringing more opportunities than challenges. More and more companies see cloud solutions and services help them deliver new products and services seamlessly and cost-effectively, making them more adaptable to the shifting demands of the market.”

In the interview, Xiong also shared about how digitization can help carbon neutralization, insights on the latest development and technology for carbon management, and Alibaba’s own approach to carbon reduction, among others.
Below are the edited excerpts:

What are the opportunities Alibaba Cloud sees in Malaysia and Southeast Asia region? How important is the country and region to Alibaba Cloud?

Malaysia has a very high willingness to embrace technology so we are going to put priorities here too. In fact, we started Energy Expert (Alibaba Cloud’s sustainability solution for enterprise) in this region first, in the Malaysia market. We recently see Agmo–a digital solutions specialist in Malaysia as our first international customer of EMAS Superapp solution to drive the EV evolution by adopting our cutting-edge technological superiority.

We expect an increase in demand from various industries in the market. Our goal is to continue to serve more local customers to enable their digital journey as one of the leading cloud service providers in Malaysia.

We will continue investing in the market and develop and nurture the use of latest and advanced cloud computing solutions to provide customers the ability to take their business digital. In doing so, Alibaba Cloud is committed to fulfilling its role as an enabler of Malaysia’s Digital Economy transformation.

What are the challenges Alibaba Cloud sees expanding in Malaysia and the rest of Southeast Asia?

Traditional IT enterprise mindset is our challenge. But the pandemic has served as the impetus for the acceleration of digitalization in Malaysia as well as the rest of Southeast Asia.

We have seen Covid-19 bringing more opportunities than challenges. More and more companies see cloud solutions and services help them deliver new products and services seamlessly and cost-effectively, making them more adaptable to the shifting demands of the market.

According to a new survey report entitled “The Next-Generation Cloud Strategy in Asia” targeting 1,000 cloud strategy decision-makers across eight Asian countries, the impact of COVID-19 has led to significant changes in their use of IT, with 54 percent reporting an increased use of cloud- based software and 41% reporting acceleration with their cloud migration. The survey data also shows that Malaysia’s uptake of the use of software in the cloud has clocked in a 56 percent increase as a result of the pandemic.

How does digitization help carbon neutralization among companies?

Digitization is critical to overcoming sustainability challenges. The culture of embracing digital technology within a business organisation will encourage sustainable innovation. Implementing sustainable digital technologies can reduce waste and make a business more energy efficient, ultimately reducing carbon emissions. Therefore, choosing the right strategies in investing for sustainable solutions is crucial to achieve the United Nations’ sustainable development goals, such as SDG12 [Responsible consumption and production] and SGD 13 [Climate action] goals. Today climate change is one of the biggest challenges in terms of sustainable development in the world.

How we can measure the carbon footprint, and especially after measuring, how we can optimise the carbon footprint is what everyone tries to do. For me, in the future what is exciting is how we can make it very inclusive and scalable in terms of sustainability in activities.

What are the sustainable benefits in adopting SaaS?

A SaaS solution is a means of software delivery that allows services and data to be accessible from different devices with a web connection, instead of having to have software installed onto individual computers or networks.

Digital SaaS sustainability solutions can help enterprises to calculate their organization or product carbon footprint by providing insightful analysis and AI based recommendations to reduce the carbon footprint. Sustainable technology has been identified by Gartner as one of the Top 10 Strategic Technology Trends for 2023, highlighting its ability as a powerful tool to help shape the innovations of the future. When carefully and thoughtfully implemented, this technology can provide a valuable resource for helping to manage and lower
the emissions of companies.

How does Energy Expert help organisations and countries curb carbon emissions?

Energy Expert helps our global customers to achieve their net zero targets through insightful actions and informed sustainability practices. Through streamlined solutions, Energy Expert helps customers automate the carbon accounting and reporting process and obtain real-time sustainability impact statistics for them to make informed decisions.

It enables customers to identify the sources of the carbon emissions from their daily business activities as well as the full life cycle of their products, based on the PAS 2060 and ISO 14064 standards on carbon neutrality.

Customers can also quantify their carbon footprint through prebuilt calculation models and our datasets. It also provides real-time visibility into carbon emission patterns and the progress of their sustainability performance through visualisations on dashboards and online reports.

So far, Energy Expert has helped more than 2600 enterprises worldwide across a wide range of industries save energy or reduce carbon emissions since its launch last year.

What is Alibaba’s own approach to carbon reduction? Are you meeting your own targets?

We started with creating a sustainability framework that is appropriate to our role and influence. Alibaba Group is targeting Scope 1 and 2 carbon neutrality, and 50 percent carbon intensity reduction for Scope 3 by 2030. New Scope 3+ dimension to facilitate additional 1.5 gigatons of decarbonization across the Alibaba Ecosystem by 2035.

Alibaba Cloud will take the lead and aim to achieve Scope 3 carbon neutrality by 2030. Alibaba Cloud is also committing to power its cloud computing with 100 percent clean energy no later than 2030.

Apart from that, we also were the Number 1 renewable energy purchaser in 2021 among China’s tech companies according to BloombergNEF.

In its financial year 2022 (FY2022), Alibaba cut a total of 619,944 tons of carbon emissions from changing its energy mix to include more clean energy; over this time period, 21.6 percent of the electricity for Alibaba Cloud was from clean energy. In the first half of 2022 alone, Alibaba purchased more than 800 million kWh of clean energy, a 150 percent increase over the full year of 2021.

Alibaba Cloud’s data centers reached an annual average power usage effectiveness (PUE) of 1.247 in FY22, an Asia-leading standard; customers in China can avoid 85.5 percent of their computing emissions by moving to Alibaba Cloud from on-premise equivalents. I believe we are on track to achieve our target at the moment.

Is there anything that is especially challenging for enterprises to start on the path to carbon neutrality?

One of the biggest challenges that people face is they are keen to take initiatives to reach their sustainability goal but they don’t know how to start. That requires a lot of expertise and companies needed to hire and invest a lot to undertake the sustainability journey.

I think what we are trying to do is to make it inclusive not only for large companies, but also for small and medium enterprises (SMEs). We want to make it accessible to any organisation. With the right system in place, you
can start running it and enter your own parameters. We want to basically simplify the process.

Even for the companies who don’t have the experience or experts but they still embark on this journey. My recommendation is to start small, to start with some POC (proof of concept) first with the sustainability initiative. We also allow a company to calculate for 1 particular product, this is very affordable. Then they can do the cost justification. If we don’t know how to start, we better start with something that is concrete and we can have a see through result and then we can generalize to the rest of the business.

To me, it’s not only about doing business, it’s also about how to make it more inclusive, for not only large enterprises but also for SMEs, researchers and universities to utilise. Hopefully we can involve more players in the sustainability drive.

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