AWS Ramps Up Its Momentum to Capture High-Growth Cloud Opportunity in ASEAN

A. Amir

Summary Bullets:

  • AWS has a comprehensive cloud portfolio and a growing partner ecosystem to address the diverse demand of ASEAN enterprises.
  • It also brings new features such as AWS Outposts in 1u/2u form-factor and greater scalability to address the ASEAN enterprises’ cloud challenges.

In a recent AWS analyst briefing session, the company shared the ASEAN recap of the AWS re:Invent 2020 (held in December 2020) and its business updates in the region. While there are various new products, capabilities, partnerships and initiatives announced at its annual flagship event, some of the key highlights in the ASEAN regions include expanding its footprint and bridging the cloud gaps.

Wider and Deeper Footprint

Public cloud adoption is still low in the ASEAN region but the market is expected to double in the next five years from US$8.4 billion in 2019 to US$16.8 billion in 2024 (for more, please see2021 ASEAN ICT Predictions,” January 14, 2021). As the global public cloud market leader, AWS is actively expanding its footprints in the region to stay ahead of the competition and capture the promising opportunity. It launched new edge services in Thailand, was selected as one of the four main cloud partners for the Malaysian government last month, and is set to open a new region in Jakarta, Indonesia this year (the second one in ASEAN after Singapore). It also has seven edge locations across Malaysia, the Philippines, and Singapore. While the infrastructure in ASEAN is somewhat comparable against other hyperscalers such as Azure and Google, AWS has a wider partner ecosystem to further extend its reach to domestic enterprises in the region. ASEAN is an emerging region but has highly diverse profiles from a country to another. Over 95% of businesses in the region are SMEs and these enterprises prefer to partner with their existing providers and local players. For AWS, while a comprehensive portfolio is important to provide a wider option in the market, a wide partner ecosystem is crucial for the provider to position the right solutions tailored for the local needs. This also sets it apart from other cloud providers although competitors are catching up fast.

Bridging the Cloud Gaps

Besides, AWS also focuses on bridging the cloud gap of the ASEAN enterprises. While AWS continuously expands its footprint (e.g., regions and edge locations) to bring cloud technologies closer to users, many ASEAN enterprises still prefer deployments within their own premises due to data residency requirements. AWS is addressing this through AWS Outposts, which is available in Indonesia, Malaysia, Singapore, and Thailand. The solutions enable enterprises to run AWS cloud services on-premises or in third-party data centers, with a consistent experience for applications and workloads across Outposts and AWS regions. However, with the surge in digitalization, on-prem data center space has become a premium. Most enterprises did not have sufficient space to allocate a full rack to run AWS services. Understanding enterprises’ painpoint, at the re:Invent 2020, AWS announced two new Outposts form-factors (1u and 2u) apart from the existing 42u full rack. This will make Outposts more accessible to enterprises, especially SMEs, and hence further drive cloud adoption in the region. Besides addressing data residency, Outposts solutions also address low-latency applications and local data processing needs for vertical use cases like smart retail, connected equipment at energy plants, and robotics process automation in manufacturing.

Another key challenge for the ASEAN enterprises with cloud is cost. Cloud is relatively expensive for most enterprises in the region due to economic factors such as currency exchange and power purchasing. Through its customer-centric approach, AWS has reduced its costs 85 times since the service was launched in 2006 and has continuously introduced new billing models to assist customers with cost optimization approaches. It shared several new features that offer greater scalability with micro-pay-per-use capabilities. This includes reducing its AWS Lambda billing granularity from 100ms to 1ms to reduce the overall cost, especially for real-time functions such as interactive web calling and data streaming. Besides, AWS also announced Amazon Aurora Serverless v2, which takes real-time scalability to the next level. With the capability to scale hundreds of thousands of transactions in a fraction of a second, it provides just the right amount of resources required by an application. AWS also claimed that it can save enterprises up to 90% of the database cost.

What’s Next

While AWS is moving in the right direction, there are several areas it should consider further extending its market leadership in the region.

  • ASEAN domestic telcos have a strong reputation in the market and they are building their cloud portfolio to expand their enterprise business. AWS could accelerate its collaboration with the telcos through its Telco Practice (for more, please see “AWS Woos Telcos to Extend Cloud Services to Edge, Develop IoT Capabilities and Use AIOps to Enhance Service Management,” July 28, 2020), Partner Network and Outpost Service Ready programs in order to reach out to more enterprises.
  • 5G is not new in the region. Providers in the Philippines, Thailand, and Singapore have been offering the technology for some time and are aggressively expanding their coverage. The telcos are also gearing up their efforts to develop enterprise 5G solutions through collaborations with industry players (for more, please see “Enterprise 5G Opportunity in ASEAN,” August 31, 2020). AWS could expand its AWS Wavelength initiatives with the ASEAN telcos to drive the ecosystem and its brand share in the region.
  • IoT is picking up fast in the region. With a comprehensive portfolio, AWS could leverage its partners to position its IoT offerings in the market.

For end user, enterprises looking to achieve greater workload orchestration across different applications and best-of-suite solutions with advanced capabilities should consider AWS cloud services. AWS has a wide service portfolio and a growing partner network to cater not only to global businesses, but also to domestic enterprises in ASEAN. It also continuously enhances its capabilities such as Outposts in 1u and 2u form, greater scalability, IoT solutions, and local language support for its CCaaS (Amazon Connect). This can enable enterprises to accelerate their digital transformation journey and achieve the desired business outcomes.

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