US-based Amazon Web Services (AWS), the largest cloud service provider globally, is expanding its footprint in Vietnam and other ASEAN markets, where governments are taking bold steps to accelerate and simplify the process for public sector agencies to migrate to the cloud and leverage its benefits.
|A new era for cloud services investment in ASEAN, illustration photo/ Source: Shutterstock |
As part of AWS ASEAN Summit 2023 in Singapore in early May, Eric Conrad, regional managing director for ASEAN and Worldwide Public Sector at AWS, announced that the company was speeding up investments in the region.
It announced plans to invest more than $6 billion in Malaysia by 2037, while also committing to an extra $5 billion over 15 years in Indonesia. To date, it has invested over $6.5 billion in local infrastructure and jobs across Singapore.
“Today, we are seeing public sector organisations move into a new phase of their digital evolution. We believe the cloud will play an even bigger role to help ASEAN governments and public sector organisations deliver national priorities, improve the lives of citizens, and drive economic growth,” Conrad said.
AWS launched two AWS Edge locations in Hanoi and Ho Chi Minh City in August last year, an investment that will enable businesses of all sizes and across all industries in Vietnam to experience secure, high data transfer rates, and improve application-level protection.
The US cloud giant has also strengthened its network of customers and partners in Vietnam. In early April, it signed an agreement with VPBank to build digital banking experiences for VPBank customers.
At the Singapore summit, eCloudvalley Digital Technology announced a multi-year strategic collaboration agreement with AWS. The multi-year agreement aims to support eCloudvalley’s new innovation lab developing cloud-based industry solutions, and establish a new Cloud Center of Excellence to train more than 1,000 employees on AWS.
Other international players have also made similar moves. Microsoft signed many cooperation agreements with enterprises in Vietnam, including VIB, Vingroup, VTC, and VINBRAIN.
According to Vietnam’s Ministry of Information and Communications, the local cloud computing market was valued at $196 million in 2020 and is projected to reach $603 million in 2026 with an annual growth rate of 18.8 per cent. Vietnam targets that its digital economy will contribute 20 per cent of GDP by 2025, with contributions from cloud computing expecting to be 1 per cent of GDP.
The National Institute of Information and Communications Strategy added that Vietnam had set a target that by 2025, all government agencies will use cloud computing. “With the rapid development of cloud services, cloud computing will be one of the strong development trends in Vietnam,” said vice president Dr. Tran Minh Tuan.
Currently, the Vietnamese computing cloud market now has more than 40 cloud service providers, including international groups like Google, Microsoft, and AWS, and domestic ones like Viettel, VNPT, CMC, and FPT. Foreign enterprises dominate 80 per cent of the local market share.
Growing attention from the government is also expected to enable the cloud computing market to further develop. At the fifth session of the National Committee on Digital Transformation in February, minister of Information and Communications Nguyen Manh Hung said that in digital transformation, the most important factor is the use of cloud computing infrastructure.
“State agencies, organisations, and enterprises in Vietnam, instead of investing and operating information systems themselves, switch to using cloud computing services that have lower cost and are safer and more flexible,” he said. “The government will also build a state data centre so that some key data of ministries, sectors, localities, and Party and state agencies will be located there.”
Governments across ASEAN are taking bold steps to accelerate and simplify the process for public sector agencies to migrate to the cloud and leverage its benefits. Many are prioritising digital transformation, putting in place cloud-first policies directing government agencies to use commercial cloud services, or defining national roadmaps to enable modernisation of their IT services and systems.
For instance, Malaysia’s government has upgraded its Public Sector Data Centre to a special cloud computing service for the use of all government agencies. The new government hybrid cloud service, called MyGovCloud, is a combination of both private cloud services and public cloud from a cloud service provider (CSP).
To further strengthen the MyGovCloud, particularly to roll out the public cloud service, the government has also signed a cloud framework agreement with CSPs. The involvement of such companies is expected to bring in potential investments of up to $3.35 billion by 2025.
Meanwhile, Thailand’s data centre and cloud services markets are expected to grow substantially over the next five years thanks to the government’s “Cloud First” initiative, which seeks to move 80 per cent of public data to hybrid cloud systems, allowing the public sector to quickly develop services without investing heavily in ICT infrastructure.
To realise their ambitions, regional governments have also signed MoUs with cloud service providers to save on costs, boost digital skills, and drive innovation. In 2022, for example, the Malaysian government signed a new cloud agreement with AWS to help accelerate cloud adoption in the public sector.
In Thailand, the Ministry of Digital Economy and Society of Thailand signed a MoU with AWS to help with the digital transformation of the Thai government cloud. It allows government agencies to consider using AWS for the cloud, including the central cloud infrastructure.
In Indonesia, the national public procurement agency LKPP worked with AWS to provide ministries, agencies, and local governments access to AWS’ cloud services through its national e-catalogue, helping them save time and resources.
Public cloud market revenue in the ASEAN region is expected to show an annual growth rate of almost 19 per cent over the next few years, resulting in a market volume of $19.72 billion by 2027, according to a recent Statista report.
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Amazon Web Services (AWS) is making a long stretch in ASEAN with a growing number of partner community and customers, as well as investment, showing its strong position and cloud-driven transformation trends in the region.