• Legacy ICT services make it more challenging for ASEAN enterprises to adapt to the changing business needs due to COVID-19.
• COVID-19 is driving digital transformation for most ASEAN enterprises and will open up a wider opportunity for carriers and service providers.
The impact of COVID-19 on ICT and vertical industries are widely covered on GlobalData COVID-19 Dashboard. With lockdowns (or shutdowns, state-of-emergency, or similar terms used per country) in nearly the whole world, the impacts on ICT spending are somewhat consistent globally. However, the impact in the Southeast Asia region (aka ASEAN) is different. Most enterprises are in a very early stage of their digital transformation journey. While newer services such as cloud, SD-WAN, and UCaaS have become the norm in other countries, a large majority of enterprises in this region still rely on the traditional ICT such as captive data center and traditional network services. The lack of agility and flexibility in these legacy services makes it more challenging for enterprises to adapt to changes due to COVID-19 such as remote workplace and digital customer channels. As a result, enterprises are shifting their current ICT priorities to focus on cloud migration, network re-dimensioning, UC deployment and/or expansion and digital services roll-out.
For ASEAN enterprises, most applications are still hosted in-house and were designed to be accessed by users within the corporate network. Having a large number of users access from the public network (or the Internet) will cause a bottleneck at the corporate Internet gateway which will affect the end-user experience. Most network services are not agile to adapt to this change. While most providers offer bandwidth on-demand service, it is still largely a manual process that can take several days to implement. More proactive enterprises are taking various approaches to tackle these urgent needs and will be in a better position. Some are migrating the application compute and storage from in-house to a third-party facility while others are changing their network design (e.g., increase bandwidth, redimension internal network across the headquarters and branches, and implement agile solutions such as SD-WAN).
UC & CC
There is also a huge spike in UC usage. Before COVID-19, enterprises especially the domestic organizations largely relied on face-to-face engagements as well as fixed and mobile telephony as the main mean of internal communications. Business collaboration applications such as Cisco Webex, Zoom, and BlueJeans were rarely used, but today have become basic tools to enable work-from-home employees. Apart from internal UC, enterprises are also ramping up their online customer channel. E-commerce is growing fast in the region, but the adoption is still relatively low as consumers still prefer to buy from physical stores. The COVID-19 pandemic is changing user buying preference from stores to online platforms. This is pushing enterprises to build/enhance websites and online stores, digital marketing practices, and online customer support channels.
For Service Providers
COVID-19 is driving the digital transformation for most ASEAN enterprises. Enterprises are starting to realize the benefits of newer ICT technologies to their business, for example, the cost-saving in pay-as-you-grow cloud services compared to on-premises deployments. There are also other benefits such as an increase in network agility to address the diverse user requirements and gain in employee productivity from collaboration tools. Most enterprises will be more open to the latest ICT solutions and accelerate their digital transformation initiatives after COVID-19. This translates to a higher market opportunity for service providers. For example, as enterprises are migrating workloads from on-premises, data residency/sovereignty is still a key requirement. The domestic providers can highlight their local facilities, wide interconnect partners, and position multi-cloud solutions to address the diverse demands. This will also be a good opportunity for carriers to push their SD-WAN services and differentiate in the market with cloud-network convergence. Professional services will be important for service providers to understand enterprises’ challenges, offer successful migrations and help the customers to achieve their business outcomes.