Safehouse bets on data centre services for growth

• Serious investment into disaster recovery, backup and cloud services
• Bandwidth and power costs still high; government needs to address this

 
MALAYSIAN data centre player Safehouse has set its sights on expanding its data centre business and expects to invest as much as RM10 million (US$2.57 million) over the next five years, according to company executives.
 
Speaking to Digital News Asia, its chief executive officer Leonard Yee said that Safehouse, owned and operated by i-Tech Network Solutions Sdn Bhd (ITNS), has traditionally been a systems integrator (SI) but is now turning its attention to its data centre business.
 
Yee said ITNS began life as an internal company serving its parent company Ireka Corporation Bhd, a construction and property developer. Over the years, ITNS evolved to become an SI and enterprise security services provider.
 
In 2013, it launched Safehouse, its data centre business.
 
“Our whole aim was to diversify from merely being an SI, and in 2012 we identified the data centre business as one way to do that,” he said.
 
Safehouse’s data centre is located at Mont Kiara, an affluent suburb about 10km outside of Kuala Lumpur City Centre. The 5,000 sq feet boutique data centre provides disaster recovery services, colocation space, virtual network operation centre services, managed data centre services, and cloud services, according to the company.
 
Yee claimed that Safehouse’s revenue has been growing about 25% to 30% year-on-year in the past three years.
 
Asked what its growth projection would be for 2016, he declined to give exact details, adding only that its projected growth rate would be in line with previous years – that is, “at about 25%.”
 
Safehouse’s data centre is modular in nature and is designed to have up to five phases. Currently, the data centre services it provides take up about 80% of phase one capacity, according to Yee.
 
When asked what the RM10-million investment over five years will be used for, he said the company plans to use the money to fuel growth for the next four phases of its data centre, and to improve its cloud computing infrastructure to cater for the next growth stage.
 
“Our plan is of course subject to the demand and growth potential, but the RM10 million has been set aside to make this investment,” he said.
 
“If our business pipeline comes to fruition, we will indeed invest in this,” he added.
 
Quizzed as to what kinds of companies Safehouse serves, chief operating officer K.B. Yap said they range from financial services, education and media, to oil and gas and healthcare companies.
 
“Some of our clients are regional ones and they are based in Indonesia, India and Vietnam,” he said, declining to reveal any names.
 
Yap said that currently, the bulk of Safehouse revenue comes from disaster recovery and colocation services.
 
Target areas
 

 
According to Safehouse vice president of data centre services Eric Cheong, the company has noticed an upward trend in Malaysian companies interested in disaster recovery services in the past few years.
 
Conceding that such services are not new and have been available for many years now, he however argued that many more local companies are being compelled to make disaster recovery a priority.
 
“Many companies today are driven by the compliance requirements of their respective businesses,” he said.
 
“In order for them to pass audits, they will need to show compliance in this area.
 
“Also, disaster recovery technology and bandwidth costs are more affordable now compared with a few years ago. As a result, even smaller companies are turning to disaster recovery,” he added.
 
Cheong said that part of the aforementioned RM10 million investment will be used to beef up its two kinds of data centre services, namely, disaster-recovery-as-a-service (DRaaS) and the more traditional infrastructure-as-a-service (IaaS).
 
When asked what would set Safehouse apart from many other established Malaysian entities as well as multinationals in this field, including Amazon Web Services, Microsoft Azure and Google Cloud Platform, Cheong cited its “great customer service” and “flexible packages.”
 
“We believe our customer service, consistency in our approach, and flexibility in what we offer our customers are the three key ingredients that make us stand out,” he declared.
 
“Our sales people do try to accommodate, within reason, what our customers want.
 
“Another point is that no matter how small or how big the customers are, we will still try and do business with them,” he added.
 
Yee however acknowledged that it isn’t easy to compete with the big boys.
 
“It’s a tough business to be in so we need to be more inventive in our approach,” he said.
 
“For instance, one of our distinguishing features, besides being a modular data centre, is that we are certified ‘green.’
 
“Through our partnership with Schneider Electric, Safehouse can offer our customers free energy allowance of 2 kilowatt per rack compared to the usual industry standard rate.
 
“Our partnership with Schneider has been very helpful and its brand helps us sell too – they [Schneider] are also very supportive of our marketing efforts too,” he added.
 
Green data centres use less energy and space.
 
National concerns
 
On the general climate in the data centre business, Yee said that Malaysia still has the edge compared with many nations in the region, but two challenges could potentially stymie the industry: Bandwidth and power.
 
He said these two challenges must be addressed and that the Malaysian Government must work with agencies such as the Malaysian Data Centre Alliance (MDCA) and Malaysian Digital Economy Corporation (MDEC) (formerly known as Multimedia Development Corp).
 
Yee said that despite having discussed the cost of bandwidth and power, data centre players in the country do not see much progress, except for some initiatives such as the Inter-Data Centre Network for Cyberjaya.
 
He also argued that these efforts should be expanded outside of Cyberjaya so that data centre players such as Safehouse can take advantage of this service.
 
“The cost of power also needs to be lowered, and again, the Government needs to play a role here,” Yee argued.
 
“If the Government is serious about wanting to make Malaysia a regional data centre hub, then it needs to give all data centre players that have invested in the sector, every advantage against our South-East Asian neighbors,” he declared.
 
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