Four trends propelling digital-first enterprises for Malaysia in 2024

• Private AI, XaaS, Liquid Cooling & Sustainability to shape future of business
• Adoption will also drive innovation, efficiency & environmental responsibility

Malaysia has recorded a total of US$48.43 billion (RM225 billion) worth of approved investments in the first nine months of 2023, the highest in the past 10 years. We at Equinix are proud to be part of this transformative journey with the nation and are excited of the opportunities that lie ahead.

With two new International Business Exchange® (IBX®) data centers already announced in Malaysia, in Kuala Lumpur (KL1) and in Johor (JH1) respectively, Equinix signals its intention on landing and expanding from the nation, a testament to Malaysia’s growing potential and capabilities.

Digital infrastructure is quickly becoming a cornerstone for businesses to achieve a competitive advantage and succeed in an increasingly important digital economy. In this forecast, we will share some innovations and digital trends that will shape the future of data centers and digital services, changing the way we interact and operate, as well as nurturing a sustainable environment.

Private AI

Recognized as a key driver of economic growth, AI is poised to transform sectors like healthcare, logistics, and finance, projecting a significant increase in adoption over the next two years. The Malaysian government, aligning with the AI Roadmap 2021–2025 and MyDigital blueprint, actively supports AI development, aiming for a 30% boost in productivity across all sectors by 2030.

The pivotal trend of integrating AI into data centers is driving innovation and efficiency, shaping the digital era's future. Businesses seeking to harness AI's potential must acquire data from reliable sources and employ suitable models. The challenge lies in maximizing AI model value while protecting sensitive data, leading to the exploration of private AI for exclusive use.

Private AI allows businesses to execute their AI strategy while retaining control over valuable data. The rising adoption of cloud, edge computing, and AI demands increasingly flexible and hybrid digital infrastructure. Equinix, in response, is developing new best practices to regulate data center temperatures and efficiency, fostering environmentally friendly data centers.

XaaS

The demand for on-demand digital services in end-use sectors has significantly increased in Malaysia following the growth of its digital economy that includes various sectors including financial services, cloud services, and e-commerce. Corporate outsourcing is a key factor driving the reliance on XaaS application. According to Research & Market, The Asia Pacific XaaS segment is expected to grow at a CAGR of 19.7% between 2022 to 2028.

Additionally, the adoption of cloud computing and the focus on edge computing and AI to process and analyze data closer to the source will require increasingly flexible and hybrid approaches to digital infrastructure, further driving the growth of XaaS in the country.

The adoption of XaaS, coupled with the provision of innovative digital services such as AI and quantum computing, further supports Malaysia's aspirations for technological advancement, economic growth, and the transformation of its industries.

Liquid Cooling

As Malaysia's digital economy expands, the need for highly efficient systems rises to meet global manufacturing and digital ambitions. Advanced cooling technologies, especially liquid cooling, play a crucial role in supporting the escalating demands of AI and HPC workloads in data centers. Liquid cooling stands out as an energy-efficient method, expected to see significant growth in Malaysia with the expanding use of cloud storage.

With liquid cooling, data centers can transfer heat more efficiently than air. In fact, as per Gartner®, “liquid conducts more than 3,000 times as much heat as air and requires less energy to do so, allowing increased data center densities.” Equinix has been actively exploring and testing new liquid cooling technologies and has implemented these innovations in our own production servers for Equinix Metal^® to great effect.

The strategic use of various cooling techniques, including augmented air cooling and direct-to-chip liquid cooling, enhances data centers' ability to deploy AI and HPC solutions across industries, attracting both local and foreign investors. Furthermore, liquid cooling aligns with the industry's focus on sustainability and efficiency, contributing to energy savings and climate-compatible operations in data centers, addressing the heat generated by power-intensive infrastructure.

Sustainability

The growth of Malaysia's digital footprint does not have to come at the cost of the environment. Sustainability has been a rising trend in the tech space. With the nation’s push towards reducing carbon emissions, encouraging industry and society to adopt sustainable practices, businesses have implemented greener policies and are expected to continue doing so. Additionally, the adoption of green technology in Malaysia has been on the rise.

Sustainability is not just about doing the right thing for the environment; it is also good for business. Equinix is committed to Malaysia's sustainability goals, aligning with the National Energy Transition Roadmap (NETR), which also reflects our steadfast commitment towards climate neutrality by 2030. By reducing our energy consumption, we are saving money and making our data centers more attractive to customers who are looking for sustainable solutions.

The rising adoption of private AI, XaaS, liquid cooling and sustainability will shape the future of digital-first enterprises in Malaysia by driving innovation, efficiency and environmental responsibility. We look forward to supporting and collaborating with our customers and stakeholders towards establishing a more sustainable and interconnected world.

Cheam Tat Inn is Managing Director, Malaysia, Equinix