Covering Disruptive Technology Powering Business in The Digital Age

Commentary By: Ivo Ivanov, CEO, DE-CIX

Malaysia—or any other country for that matter, needs future-ready infrastructure to leverage innovation and make the most of the digital economy.

From exploring the integration of Artificial Intelligence (AI) into our daily lives to anticipating the opportunities presented by 6G, Malaysia is reshaping the landscape of the digital society and economy. This transformation holds significant economic value, as the digital economy may contribute an impressive 24.4% to Malaysia’s gross domestic product (GDP) this year against a backdrop of a forecast economic growth of 4.2%, as indicated by a recent study conducted by a local digital association, PIKOM.

Digital and internet-driven applications form the foundation of future value creation, a truth universally acknowledged worldwide. In the Malaysian context, this certainty extends to the pivotal role of data-intensive AI applications, collaborative business models, and immersive internet in ensuring prosperity for tomorrow. Additionally, it is imperative to recognise that current infrastructure may fall short in meeting the demands of future applications. The impending need for swift data exchange will elevate latency as the new currency in Malaysia’s evolving digital economy.

The Significance of Every Millisecond

Latency, the duration of time taken during data transfer, plays a crucial role, especially in scenarios where milliseconds can make a difference. Take, for instance, autonomous vehicles that only recently have started to navigate Malaysian roads; onboard computers must make split-second decisions on obstacles, pedestrians, and open lanes. Similarly, in local plants or factories, where AI facilitates the safe collaboration between humans and machines, and in immersive experiences like the metaverse, latency becomes a decisive factor.

Feeling, seeing and hearing—our brains require 20 milliseconds to process tactile sensations, 13 milliseconds for the central nervous system to interpret visual stimuli, and less than 1 millisecond for auditory perception. In matters of latency, our perception remains steadfast. This unwavering quality becomes the arbiter of the metaverse’s success or failure.

Why is this the case? Simply because our engagement with immersive applications is only complete when the experience feels entirely natural. If the synchronisation between visuals and audio is amiss, it is not merely an inconvenience; it is deemed unacceptable.

Why Future-Ready Infrastructure Is Necessary: Reduced Latency, Enhanced Prosperity

In the evolving landscape of the internet, an increasing number of devices in Malaysia must rapidly exchange vast amounts of data. This, ultimately, necessitates the need for future-ready infrastructure. Low latency becomes imperative to ensure the safety of autonomous vehicles, seamless collaboration between robots and engineers in local factories, and the sustained growth of the digital economy, contributing significantly to the nation’s prosperity.

To pave the way for the next-generation internet, be it through fibre optics, mobile networks, or satellite connections, it is important to elevate the current infrastructure’s capabilities to handle faster data packet exchanges. In other words, future-ready infrastructure is needed. This requires a collaborative effort that prioritises customers and applications, not only between the network and users but also among different networks themselves.

One approach involves strategically relocating extensive data lines and high-performance computers closer to areas where intelligent applications are integral to daily life and work. The ultimate objective is to establish a robust, globally distributed, and interconnected infrastructure with future-ready capabilities, fostering agility from the cloud to factory server rooms and even the compact edge units in smart vehicles.

The correlation between reduced latency and heightened prosperity is evident in markets where the interconnection ecosystems that surround DE-CIX Internet Exchanges (IXs) thrive. For instance, in Dubai, a remarkable reduction in latency from 200 to 3 milliseconds between 2012 and 2022 has spurred regional entrepreneurship.

“Latency, the duration of time taken during data transfer, plays a crucial role, especially in scenarios where milliseconds can make a difference. Take, for instance, autonomous vehicles that only recently have started to navigate Malaysian roads; onboard computers must make split-second decisions on obstacles, pedestrians, and open lanes. Similarly, in local plants or factories, where AI facilitates the safe collaboration between humans and machines, and in immersive experiences like the metaverse, latency becomes a decisive factor.”

During the same period, on-site data centres tripled, and network numbers increased eightfold. A similar trend is unfolding on the Iberian Peninsula, particularly in Madrid, where the data centre count has risen from 20 in 2016 to over 30 today, with 15 more in the pipeline. Our joint study with Digital Realty and IDG market researchers, soon to be unveiled in Spain, reinforces this trend: where networks intersect, data centres emerge—generating employment, fortifying the economy, and securing prosperity.

According to IDG experts, every euro invested by the Spanish data centre industry contributes seven euro to the gross domestic product. Similarly, in Malaysia, the expansion of data centre infrastructure, spurred on by interconnection infrastructure like robust IXs,  correlates with economic growth, job creation, and enhanced prosperity.

Fostering Progress Together

The path forward necessitates collaborative efforts within the industry to address technological challenges and prepare for future digital advancements. By investing in technological infrastructure today, Malaysia can ensure its readiness for the forthcoming era of digital progress.

Deloitte is estimating the impact of the metaverse to GDP in Asia to be between US$0.8 trillion – US$1.4 trillion per year by 2035, roughly 1.3–2.4% of overall GDP per year by 2035. With the potential for substantial economic returns, particularly in emerging concepts like the metaverse, the opportunities for Malaysia’s digital future are vast and promising.

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