IDG Connect has just published another of my forays into Asia’s ICT markets, this time focusing on Malaysia and whether it can possibly sneak in to take the crown of regional digital hub from its rivals in Hong Kong, Singapore and elsewhere.
The truth is that the country has flown under the radar for much of the past 20-odd years, although in reality the government had been pushing for foreign investment there since the early 1970s, when Intel and six other firms set up facilities in what was once nothing more than mud and rice fields.
Fast forward to today and Malaysia has something of an image problem, according to Ng Wan Peng, COO of Malaysia’s Multimedia Development Corporation (MDeC), the government agency leading the charge.
“While the country is fast-becoming viewed as a top Asian holiday destination, with beautiful beaches and luxury hotels, it doesn’t immediately spring to mind as a place for foreign firms to invest or in which to establish their Asian hub,” she told me.
Its efforts to change this and help the country move up the ICT value chain were spearheaded by the founding of the Multimedia Super Corridor (MSC) – a hi-tech investment zone running from Kuala Lumpur airport into the city centre. It’s designed to spur foreign investment (33% of which comes from the UK) and encourage that transformation into a “digital economy” by 2020.
The Malaysian government has put together a very generous set of inducements to invest here, including a “Bill of Guarantees” which promises MSC-status companies: a 10-year income tax “holiday” or investment tax allowance for up to 5 years; freedom of ownership; strong cybersecurity laws; and no internet censorship, according to Peng. The government also offers unrestricted employment of foreign knowledge workers, cutting visa-related red-tape.
So what else? This is what Peng had to say:
The answers range from the economical, to the cultural, to the financial. For one, we are politically and socially stable. We also believe our multi-cultural society holds a business advantage – we Malaysians are used to sitting across the table from someone of a different ethnicity to us from an early age, so we’re used to conducting business with people from all geographies and walks of life. Being a largely English-speaking population is also attractive to Western investors, while our world-class infrastructure helps to facilitate global commerce without fear of being disrupted by natural disasters.
So far so good. But there are challenges, as Frost & Sulivan APAC associated director Pranabesh Nath explained to me.
“Areas that stand out as challenges include inadequate technology infrastructure, lack of sufficient talent, small domestic market, and not enough ‘knowledge jobs’,” he argued. “Adoption of technology for consumers in terms of usage, and lower e-commerce penetration provides additional growth challenges. The government, though, recognises these shortcomings and is expect to be implementing policy to overcome them.”
Indeed, Peng explained separately without prompting that these areas of concern are being addressed by the government.
There’s certainly a will from the top to make this work which is heartening to see and some impressive growth stats already. Yet I wonder whether the problem Malaysia might face is in that delicate balance between encouraging foreign investment via tax breaks and other inducements and nurturing its home-grown companies.
“There are frameworks and policies since the ’90s on encouraging home grown companies, however these don’t seem to have worked very well,” Nath argued. “Technology and markets have also changed rapidly in the last 20 years and it is always hard to keep up to date with the latest development and growth areas.”
However, he was optimistic of a way to surmount this problem and accelerate Malaysia’s ICT growth without this coming at the expense of home-grown companies.
“The internet of things and its applications in industry sectors such as automobiles, healthcare and consumer are enabling new business models and use-cases such as wearable technology. These highly integrated solutions use all key tech areas such as cloud, big-data and high speed connectivity,” he explained.
“A strong emphasis being a leader in this area, coupled with a focus on generating a knowledge intensive economy can propel Malaysian ICT to much greater growth in the next five years. Both foreign investment and local companies’ incubation can be simultaneously pursued in these cases. Now we just need strong policies that can implement the above.”
I’ve just written up for The Reg a news story based on one of the most interesting interviews I’ve done since moving here to Hong Kong: Intel Labs China’s chief scientist, Randolph Wang.
There wasn’t enough time to put everything in that piece so here’s the unabridged version (unfortunately without pics as most of the gadgets mentioned here have never formally been shown to the public).
Wang joined the labs around three and a half years ago but spoke about the recent launch of Intel’s SD card-sized computer Edison with the zeal and excitement of a start-up founder.
This is probably pretty accurate, since he told me the labs function “more like a start-up” than part of a global chip behemoth.
He walked me through the process by which Edison was developed in those labs, by as few as 10-20 people on average, with the focus on “creating something new”, not reliant on preconceived notions on buzzwords; of “going to work, playing around and having fun”.
It started life apparently as an actual smart SD card which they plugged into an off-the-shelf camera and went about seeing what applications they could run on it.
The idea of a “slave device” soon became limiting, however, but they decided to keep the size, pluggable form factor and self-contained design and work with that.
“Over time we got rid of the constraints, so the SD card could be born to tell the device about it – to be a master not a slave,” he said. Eventually they got rid of the final constraint by building devices (30-40 odd of them) themselves to fully exploit the potential of Edison.
At this time the idea was not just to build simple, box-like prototypes but, in partnership with Tsinghua university’s industrial design department, to “build something beautiful”.
He told me about a pair of “crystal speakers” made of a transparent material where the light inside responds to the music being played, or of a smart bird feeder – as described in The Reg article – which recognises which bird lands on it, takes and pic and sends an alert out to the owner if it’s an interesting breed.
Another project he was keen to promote was the porcelain cup demoed by CEO Brian Krzanich on stage at CES last month.
“There’s an LED matrix embedded in the cup wall that allows the cup to display subtle info or alerts. At CES, our CEO Brian Krzanich demonstrated that the porcelain cup was working with the baby monitors (also powered by Edison) developed by Boston area start-up, Rest Devices,” he explained.
“If the baby’s respiration or temperature info is abnormal, the cup displays alert info. Alternatively, one can put applications in the cup so that it displays current temperature, or current Intel stock price, or as I was saying, with a pair of cups, the boyfriend cup lights up when the girlfriend puts coffee in her cup.”
What excited him so much was that the cup was made in a town called Jingdezhen, which has been making ultra-thin, high quality porcelain for over 1,700 years. Being so thin enables the light to shine through better, he explained.
This is a remarkable story of marrying 2000 year old craftsmanship with the latest silicon technology. But it’s more than that. The town, though famous, is located in an impoverished area. One of the things talked about by the proponents of the “Maker revolution” is the idea of spawning new industries and generating new wealth at the most unlikely places, because the democratising effect of the “Maker phenomenon”. There’s a local “porcelain research institute” that we’re collaborating with, who see great potential in producing a new line of porcelain married with the latest cutting edge Intel technology to open new markets, thus breathing new life into an ancient local industry.
This kind of thing is not the end but the beginning for Edison, and with true SoCs, in which everything including Flash and DDR memory is on-die, set to land in a couple of years there’s the potential for the micro-computer to be made even smaller and cheaper in future.
The strength of the project will, however, depend on how developers take to it, Wang concluded.
“Each Edison-powered device is meant to house multiple applications that users can download into them and third-party application writers could write for. And these things can work together,” he said.
“We’ve tried to do something with the best intentions but I’m fairly certain that the best is yet to come and probably not from inside but outside.”
From Intel Inside to Intel Outside in a few short decades.
Spent a fascinating day at Intel’s Penang facility a week ago today with The Register. Up until now it’s been something of a hidden gem for Chipzilla but, as the largest plant outside of the US, it’s a key part of its Asia and global operations.
So exactly why is it such a big deal for Intel? Well it was its first ever foray outside the US some 40-odd years ago and now employs over 6,000 designers and engineers. Crucially it acts as a hub for Intel’s other plants across Asia, providing training and support for engineers from newer facilities in Chengdu, Bangalore and most recently Vietnam.
As if any more proof were needed of its importance to Intel, the firm’s global VP of the Technology and Manufacturing Group, Robin Martin, is based there.
We learned that having everything from product development and design to testing and manufacturing on one site means the firm can respond much quicker to changing market demands and keep up with faster development cycles demanded by today’s mobile computing trends.
Perhaps an even more interesting story, though, is the emergence of Malaysia and Penang as an IT destination during the past 40 years. I spoke to Datuk Noharuddin Nordin, CEO of MIDA, the government’s investment and development agency, who admitted that the reason Intel was lured to the country in the early ‘70s was purely based on cost.
However, the government has taken that early investment and managed to grow it, attracting more big electronics MNCs with skilled labour, solid IPR protection and cheap land.
“We must remember MNCs come here because they want the greatest margins,” he said. “We have to anticipate what’s round the corner and create systems which will help to prepare for that.”
It’s not done a bad job. Intel on its own has invested $4bn in Malaysia over the past 40 years and other big names including Motorola, AMD, Western Digital, Renesas, Bosch and many more have all joined Chipzilla in Penang. Nordin claimed such investment has managed to help to move local firms up the value chain, nurture world class IT talent in Malaysia’s universities and attract MNCs from other related industries like aerospace, medical equipment and automotive.
As we walked through the old colonial streets of Georgetown that evening I couldn’t help but think Penang has come a long way since its days as a British East India Company trading port.
Whether it can continue to lead in the future remains to be seen, with hugely ambitious Asian rivals like China coming up fast. However, alongside Taiwan, Malaysia has something of a first mover advantage in Southeast Asia which will be hard to match in the near-term.
I was in Singapore this week for a big Intel announcement, ably covered by my Reg colleague Timothy Prickett Morgan here. That left me with no news but a bit of wriggle room to consider the bigger picture: just where is Big Data headed, what’s the big deal with Hadoop and is Intel really a software company now?
Well, let’s take the last question first. Yup, Intel has been a software company for several years now actually. It was the $7.6bn acquisition of security giant McAfee which really sealed the deal though and its roadmap for taking security capabilities down to the OS and chip level is taking shape nicely. This week’s big news was that Intel is getting into the Hadoop game with its own distribution of the open source Big Data management framework.
It’s a smart move for Chipzilla, helping to drive extra revenue and boost take-up of its Xeon chips. According to global director of Enterprise Computing, Pat Buddenbaum, however, there was another reason for the move, namely “to instill confidence that Hadoop will remain open”.
“One of the concerns was that its primarily driven by start-ups with venture backed direction, which may fork from the 100 per cent standardised open source path,” he told me.
Intel as open source saviour? Well you can be sure that commercial interests were probably its primary motivator here, and it has no plans to make similar moves for other open source frameworks which may be at risk of forking.
So what about Big Data? Should you believe the hype? Well, although even Buddenbaum admitted it was a bit of a buzz word, the premise behind it is sound. It’s about organisations making sense of the vast quantity of data – be it internal or external, customer-related data – literally inundating their datacentres, in order to drive business growth and improve agility in realtime. Analysts I spoke to are in agreement that the Big Data trend is a positive one and Intel’s move will benefit the industry. Now it’s up to the OEMs, SIs, and ISVs to play their part and enable the democratisation of Big Data by pushing Hadoop down to the mass market via their products and services.
Don’t hold your breath though. The industry is at such a nascent stage that, according to Intel’s APAC Datacentre Products GM Jason Fedder, it’s not even clear which region if any is ahead of the curve. In the meantime the hype will continue as long as IT vendors (excluding Intel, of course) think they can flog some extra units on the back of this latest buzz word. But I’m pretty confident that in a few years’ time we won’t be talking about Big Data anymore – not because it will have fallen from favour but because it will be ubiquitous.
No news as such but key themes from that part of the business included Big Data; stellar growth in China thanks to the datacentre needs of the large internet firms over there like Tencent and Alibaba; and continued security risks as pointed out by a McAfee representative.
Jason Fedder, Intel’s Asia Pacific datacentre group GM, agreed with the view of EMC and others that China is where some of the most exciting cloud projects are taking place today thanks in part to the lack of legacy infrastructure in organisations there.
But he went further to say that the PRC is really turning itself from being a technology follower to innovator – pointing to Tencent and Alibaba’s efforts to craft their own compute standards under the Project Scorpio banner, and of the state-run telcos ripping out their IBM boxes to replace them with spanking new Xeon kit.
Intel’s been in China for some time and is about as well-supported over there as any foreign company can be given the sometimes harsh business climate afforded non-local companies.
As an example of its growing influence in the country, Fedder explained how Intel is trying to broker a deal to ensure the closed Chinese crypto-standard Trusted Cryptography Module (TCM) is made interoperable with the Trusted Platform Module (TPM) hardware authentication standard its TXT technology is built on.
However, there are some aspects of doing business in China which even Intel can’t get around fully, as IT manager Liam Keating told me. The network infrastructure is still pretty bad outside the Tier 1 and 2 cities in the PRC, a fact made worse by the Great Firewall and meaning challenges in the firm’s smaller field offices and complaints from staff, he said.
To get around this Keating and his team have been forced to look at other ways to improve traffic flow, such as “in-country cacheing” using outsourced cacheing providers, and by modifying app design to reduce the amount of dynamic content.
It’s reassuring to know that even Intel has the same problems experienced by many when it comes to China’s infernal internet infrastructure.