AIMS wins ‘inter-data centre network’ contract from MDeC

• Aimed at mitigating the high cost of bandwidth faced by Malaysian data centres
• Malaysian data centres spend from 20-25% of their operational cost on bandwidth

AIMS Cyberjaya Sdn Bhd said it has been appointed by Multimedia Development Corporation (MDeC) through an open tender to lead and deliver the ‘Inter-Data Centre Network’ initiative.
 
This initiative is aimed at mitigating the high cost of bandwidth faced by Malaysian data centres, by deploying an ultra-broadband backbone network interconnecting participating data centres within the city of Cyberjaya.
 
AIMS will be responsible for the deployment, configuration, monitoring and support of the network services and operations, it said in a statement. Financial terms were not disclosed.
 
The InterDC Network initiative was conceived with the input of local data centre players in a series of engagements and consultations organised by the Malaysian Data Centre Alliance (MDCA) and facilitated by MDeC to bring down the cost of data centre operations, AIMS said.

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IDC Research’s recent study on the total cost of doing business for data centre providers in 15 countries revealed that on average, Malaysian data centres spend from 20-25% of their operational cost on bandwidth, compared with less than 5% in Singapore, Hong Kong, Japan, the United Kingdom and the United States.
 
Bandwidth cost comes from both local and international components. Malaysia has been facing challenges in both domestic and international connectivity, which had led to relatively higher costs than Singapore and Hong Kong which are the region’s recognised data centre hubs, AIMS said.
 
“While our overall Global Data Centre Risk ranking is 16, Malaysia is ranked No 28 (out of the top 30 nations) when it comes to international connectivity (Cushman & Wakefield, 2013), which further highlights the  high international bandwidth cost,” said Wan Murdani Wan Mohamad (pic), director of Digital Enablement Division at MDeC.
 
“New submarine cables are expected to be in service by Q2 (second quarter) of 2016 and it will address the international component of the cost, but the domestic aspect needs to be equally addressed.
 
“Domestically, the current level of competition in the market is not big enough to significantly reduce the bandwidth cost within Malaysia.
 
“This is why we are looking at ways to bring down the cost of bandwidth for the benefit of local data centre service providers to create a competitive ecosystem that attracts digital content and services players to serve the region using Malaysia as a base,” he added.
 
As part of the Malaysian Government’s Economic Transformation Programme (ETP), the data centre industry has been identified as one of the key economic growth areas.
 
An initiative known as the Entry Point Project (EPP3) under the Business Services National Key Economic Area (NKEA) was introduced to position Malaysia as a data centre hub, with MDeC being appointed the lead agency to drive this initiative.
 
The ETP seeks to transform Malaysia into a high-income economy by the year 2020.
 
The initial phase of the Inter-DC Network initiative will leverage existing dark (unused) optical fibre infrastructure available in Cyberjaya to interconnect with participating data centres based there.
 
“By aggregating all of their traffic, we will be able to drastically reduce the bandwidth cost through bulk purchase as typically 10Gbps is four times cheaper that 1Gbps on a per megabit basis,” said Wan Murdani.
 
Typically, dark fibre is based on a capex (capital expenditure) investment model with a long-term lease – which enables the maximum utilisation of the fibre capacity specifically for large bandwidth applications, AIMS said.
 
Usually with dark fibre, cost does not escalate with an increase in bandwidth usage. This is another way where cost savings will be realised, the company added.
 
Currently there are more than 20 data centres based in Cyberjaya, and ultimately the Inter-DC Network will facilitate the creation of a highly connected data centre hub that will attract further investments in this sector, AIMS argued.
 
The Inter-DC Network initiative has been modelled after the Malaysian Internet Exchange (MyIX), which AIMS claimed has significantly reduced the cost of domestic bandwidth connectivity through the concept of aggregation nodes and co-location of network points of presence (POPs) for Internet service providers.
 
In addition, interconnecting these two networks could create some synergy, the company added. Initial steps to do this have already been started and accepted by both MyIX and MDCA members.
 
AIMS group chief executive officer Chiew Kok Hin (pic) said that the AIMS Group’s strong carrier neutrality factor additionally gives the connecting data centres the flexibility of choosing their bandwidth provider, to offer their service provider clients more options to reach out to their end customers.
 
“AIMS is committed to the criteria set by MDeC including the 99.9% availability as per the MSC Performance Standards, high scalability to multiple terabits of capacity, high security focus, and the ability to deploy the project in a short time by being centred in Cyberjaya where optical fibre is readily available,” he said.
 
Wan Murdani said MDeC will oversee the initial three years of implementation and growth before handing over the project to industry stakeholders by the fourth year of this initiative.
 
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