Embrace of the cloud enabling more cost-efficient operations

Businesses in Vietnam are stepping up their digitalisation efforts

In late May and into this month, ASEAN and the wider world witnessed the return of major technology shows from giants. Following the 2021 AWS ASEAN Summit on May 17-18, last week Intel and Ericsson held Computex 2021 and Ericsson Unboxed Office 2021, giving insights into new products and technology trends. The events came at a time when businesses are pushing ahead with tech-based transformation in order to adapt to new challenges and the acceleration of digital transformation efforts.

AWS Summit Online ASEAN

Big gains

Despite a year of suffering and upheaval, many big names like AWS, Intel, and Ericsson thrived in 2020 and are further boosting their footprint in Vietnam and the wider region by leveraging new innovations.

Based on recently announced fourth-quarter results, AWS boasts a $50 billion annual run rate business with 28 per cent on-year revenue growth. According to Conor McNamara, managing director for ASEAN at AWS, several factors have played a key role in the company’s success.

“Firstly, AWS always places customers at the centre of all its decisions. Some 90 per cent of our products and features at AWS come directly from their feedback, and the other 10 per cent is when we invent on their behalf,” McNamara explained.

In addition, the group takes a long-term approach to its business and always looks to delight customers, even when it presents a risk to its short term business performance. Finally, it remains laser focused on operational excellence to the point where the difference between perfection and current performance is indistinguishable to customers, McNamara added. AWS’ growth momentum continued in the first quarter of 2021, with revenues of $13.5 billion, 3.1 per cent higher than the $13.1 billion consensus estimate.

In this technology trend, Intel is also a winner. Full-year revenues for 2020 set an all-time record for Intel of $77.9 billion, up 8 per cent on-year. This marked its fifth consecutive year of record revenues. Impressively, Intel’s first-quarter revenue exceeded January guidance by $1.1 billion led by continued, strong PC demand. PC unit volumes were up 38 per cent on-year, and notebook volumes also set a new Intel record.

“Intel delivered strong first-quarter results driven by exceptional demand for our leadership products and outstanding execution by our team. We’re rapidly progressing our plans with a reinvigorated focus on innovation and execution,” said Pat Gelsinger, Intel CEO. “This is a pivotal year for Intel. We are setting our strategic foundation and investing to accelerate our trajectory and capitalise on the explosive growth in semiconductors that power our increasingly digital world.”

At Computex 2021, Intel announced a slew of new products in a move to make big gains this year.

Global demand

Similarly, Ericsson, a leader in 5G with 127 commercial contracts and 79 operating networks around the world, saw organic sales grow by 5 per cent for 2020. Börje Ekholm, president and CEO of Ericsson said, “Our strategy, built on increased investments in research and development for technology and cost leadership, continued to bear fruit in the first quarter of 2021. We saw organic sales growth of 10 per cent, primarily driven by market share gains in networks. We are well positioned to take advantage of the continued market momentum with a competitive 5G product portfolio and cost structure.”

“There is strong momentum in global 5G demand with lead markets moving forward at a high pace, creating opportunities for Ericsson to grow its core business,” Ekholm added. “To that end, we continue to invest in further strengthening our portfolio and growing our global footprint. With the investments we are making in our business in 2021, we are creating a strong platform for the long term with strengthened competitiveness in the core business as well as in Enterprise applications.”

ASEAN cloud-driven trend

The unprecedented events of last year have put companies in Vietnam and beyond under threat, forcing them to transform faster, and more efficiently. Petronas, the national petroleum company of Malaysia, decided to choose AWS cloud in its transformation and achieved the most optimised cost to serve across the total value chain, facilitating competitive pricing and segmentation.

Petronas has been active for years in Vietnam through Petronas’ subsidiary PC Vietnam Ltd., and the transformation is also benefiting its journey here. Aadrin Azly, chief digital officer of Petronas, told VIR, “The tools that Petronas build and deploy on the AWS cloud platform are available enterprise-wide based on business needs. The move to cloud has enabled us to be more agile, scalable, and become more cost-efficient.”

Prior to the pandemic, enterprises have long considered the move to the cloud. And while many took the first steps to drive initial workloads to the cloud, the shift into the digital world moves ever faster, particularly with the days of IT capabilities being centralised in data centres steadily declining. Dean Samuels, chief technologist at AWS, said “Over the last 15 years, we’ve seen an evolution in the AWS region in terms of global expansion. Up until today, we have had over 25 geographically distinct regions around the globe, where customers are able to leverage the various AWS services from our platform. In the next 12-18 months, we’ll actually have another five regions that will come online.”

Trends across sectors

In Vietnam like elsewhere in ASEAN, domestic and foreign-invested enterprises are making similar moves. For instance, Vietnam-based video conferencing provider TranS, who leveraged AWS to seamlessly scale, has seen its user count grow from 1,000 to 450,000.

Similar trends in telemedicine have also been seen where organisations like Doctor Anywhere, Dr. Raksa, and HaloDoc have been able to expand their service offerings while scaling seamlessly and cost-effectively on the AWS cloud.

In the banking and services sectors, FE CREDIT, the largest consumer lender in the country and a subsidiary of VPBank, went all-in with AWS in April; and the previous month Vietnam Maritime Commercial Joint Stock Bank selected AWS as its preferred provider for TNEX, Vietnam’s first digital-only bank.

In ASEAN, many unicorns including Grab, Traveloka, Tokopedia, and hundreds of others are also joining the cloud game. The next wave of ASEAN unicorns choosing cloud to build their business on, including Razer and Zilingo, has been also seen – and the same can be said of regional startups, including Pomelo Fashion, Thailand’s largest fashion e-commerce platform.

Santosh Gon - Chief information officer, Aviva Singlife Digital transformation was one of our key strategies over the last 18-24 months. The primary outcome was to drive productivity of our distribution workforce to provide them with the right tools and the right data, such that it enables them to do the new business more digitally. That includes things like lead management, fact finding, electronic submissions, and automated underwriting to name a few. With the merger of Aviva and Singlife, we have broadened our strategy. The focus now is on distributors, as well as customers and our partners. The strategy is now aligned towards the wider ecosystem, where we are leveraging digital and data to drive a more coherent strategy. Technology is being seen as a key driver of our business strategy. Now, we’re focusing on skill building around new capabilities, such as cloud, AI, and cognitive automation. Yessie Yosety - Chief of information and digital officer, XL Axiata XL Axiata is a part of Axiata Group, one of the largest telecommunication conglomerates in Asia. In response to COVID-19, we changed our strategy to reimagine the business model, reimagine our operations, and reimagine our ways of working with a culture of uncompromising integrity, team synergy, simplicity, and exceptional performance. We are thus embracing the cloud transformation journey. In all, Xl Axiata is pursuing double the productivity and around 15-20 per cent cost savings over five years from leveraging public cloud. The most important part when you are embarking on a cloud transformation journey is to build a centre of excellence, and we will need to establish this. On our future plans, we are planning to expand our applications on the cloud to big data analytics, automation, and AI. Dr. Justo A. Ortiz - Vice chairman, UnionBank of the Philippines Union Bank’s transformation journey involves culture, strategy, space, process, people, and partnerships. In the process pillar, among the tech we decided to build capabilities on is the cloud, which complimented our push for financial inclusion and inclusive prosperity. Financial inclusion is a big theme in the Philippines, with about 70 per cent of the adult population unbanked or underbanked. Aside from it serving as Union Bank’s higher purpose, the challenge of banking them is also a test for us to become a low-cost producer by reimagining our existing processes, both back-end and front-facing. Going to the cloud is among the first steps. But the journey is not only about technology, but mostly about people’s mindset and culture, new ways of thinking, and new ways of doing to unlearn, relearn, and keep learning.