Malaysia has the mojo to be data centre hub: TE Connectivity

By Goh Thean Eu October 9, 2014

Disaster recovery is one area where Malaysia can take advantage
Growth opportunity when data centres migrate or upgrade to offer 40-100Gbps

Malaysia has the mojo to be data centre hub: TE Connectivity

TE Connectivity Ltd, a global provider of connectivity for copper and fibre, believes Malaysia has what it takes to become the regional data centre hub.

According to Tim Takala, technical director for Asia and its enterprise network division, there are various opportunities that Malaysia can take advantage of to achieve this goal – and one of them would be to position itself as a preferred destination for disaster recovery data centres.

“If you look at the overall perspective, in terms of the growth of data, I think the goal can be achieved just by satisfying Malaysia’s own internal needs,” Takala told Digital News Asia (DNA) in a recent interview.

“However, there is another big opportunity out there – and this is not only to satisfy internal needs, but to also become a facility for other countries, or companies from other countries, for disaster recovery,” he said.

Under the MSC Malaysia MyProCert (Data Centre) programme, the country aspires to supply five million square feet of data centre space by 2020.

Takala said that when a company decides to build a disaster recovery data centre, it will consider many factors, including the location and how far away it is from the primary data centre.

“There are a lot of recommendations on where to build a disaster recovery data centre, and one recommendation is that it should be at least 100km away from your primary data centre.

“So, how is one going to build a disaster recovery data centre that is 100km away from your primary data centre located in Singapore? This is one area I think Malaysia can definitely take advantage of,” he said.

Unrealised potential

While Takala sees the potential Malaysia has as far as the data centre industry is concerned, he admits that Singapore and Hong Kong are leading the pack in terms of the data centre market.

“But this doesn’t mean that it will stay this way forever,” he argued.

Takala said that Malaysia has a few factors in its favour to attract data centre investments. First is that the cost of its electricity is significantly lower than in Singapore and in Hong Kong.

“I think if I am not mistaken, the energy cost in Singapore is about 1.5-3 times higher than in Malaysia,” he said.

The other factors include lower real estate cost, and sufficient fibre infrastructure and talents, he added.

Budget 2015 wish list

On Oct 10, Malaysian Prime Minister Najib Razak, who is also the Finance Minister, will be announcing the country’s Budget 2015, which acts a platform for the Government to announce initiatives and plans to drive the economy.

Takala (pic above), who has been based in Malaysia for over a year, said that he hopes that the Malaysian Government can continue its efforts to transform the country into a digital economy by 2020 – this should include investments in broadband, ICT, data centre and skills development.

“As the Asean Economic Community (AEC) looms large, world-class connectivity infrastructure will be one of the most essential recipes of success in the very competitive regional free trade zone,” said Takala.

“Today, Malaysia is ahead of the curve when it comes to digital inclusion, affordability, and the general standard of connectivity among similarly developed nations.

“The reason for this is the Government and its agencies’ continued work on the Digital Malaysia initiative,” he added, referring to the programme that seeks to transform the nation into a digital economy by the year 2020.

“TE Connectivity Malaysia hopes to see these initiatives continued in the coming annual budget. We also hope to see continued investments for perfect execution of the broadband, ICT, data centre and skill development plans,” Takala said.

He said that such initiatives would be key in making sure Malaysia continues to operate from a “position of strength” in the region.

Taking advantage of the data centre boom
Malaysia has the mojo to be data centre hub: TE Connectivity
According to Takala, TE Connectivity Malaysia is in a good position to grow in the data centre market over the near- to medium-term, mainly driven by the increasing number of data centres offering connectivity speeds of 40-100 gigabit per second (Gbps).

He said that currently, many data centres in Malaysia are still offering speeds of up to 10gpbs and planning to migrate or upgrade to 40-100Gpbs.

However, this move has its own challenges and limitations, said Takala. One is the migration from copper to fibre. For data centres offering speeds of up to 10Gpbs, chances are that they have significant portions of copper connectivity.

“This is because copper is able to deliver speeds of up to 10Gpbs as long as it is within a range of 100 meters – this means 100 meters from your active switching equipment to your end-device.

“Once it exceeds 100 meters, performance will drop significantly,” he said, adding that in delivering 40Gbps over copper, the range will be reduced significantly to just 30-40 meters.

“To deliver that type of performance, you need fibre,” Takala declared.

There are two methods to wire up entire data centres using fibre. One is using single-mode fibre, which has a range of up to 40km. However, this is not cost effective.

Another method is to use multi-mode fibre, which has a shorter range of just 150 meters – but which is sufficient for a data centre, Takala argued.

He pointed out however that wiring up the entire data centre with fibre isn’t going to guarantee a consistent performance of 40-100Gbps.

“Each time the fibre goes through a connection, for example from the switch to the server, you will have a certain amount of light that gets lost. It is called insertion loss or light leaks.

“So, what we [TE Connectivity] quickly realised is to make a migration path so that when you put in the multi-mode fibre network today, it supports 10Gbps today and can support 40-100Gbps tomorrow,” he said.

According to Takala, when a data centre uses fibre to deliver 10Gbps connectivity, an insertion loss of 2.6dB (decibels, used to measure intensity here) is acceptable since more than half of the light can go through.

“However, when data centres go to 40-100Gbps, 1.9dB becomes the limit. With anything that exceeds 1.9dB, the transceivers aren’t guaranteed to work because they only generate and sense a certain amount of light.

“For us, we can achieve 1.4dB. This means 25% loss in light or light leaks, and 75% is going to get through,” he claimed.

Takala said that its fibre connectivity system’s capability to achieve a low count of light leaks will put TE Connectivity in a good position to secure more deals in developing new data centres.

“We look at what the industry is doing, in terms of the amount of light loss it is allowing, and not many can do 40-100Gbps because of the limitation [of insertion loss]. Maybe the process in making their products are not stringent enough.

“But, we, as a leading provider of fibre and copper connectivity systems, are able to achieve that,” he claimed.