The InterDC Network is an ultra-broadband backbone interconnecting key data centres

CYBERJAYA, 6 April, 2015 – AIMS Cyberjaya Sdn Bhd (AIMS) has been appointed by Multimedia Development Corporation (MDeC) through an open tender to lead and deliver the ‘Inter-Data Centre (DC) Network initiative’. This initiative is aimed at mitigating the high cost of bandwidth faced by Malaysian data centres by deploying an ultra-broadband backbone network interconnecting participating data centres within Cyberjaya. AIMS will be responsible for the deployment, configuration, monitoring and support of the network services and operations.

The InterDC Network initiative was conceived from the inputs by local data centre players in a series of engagements and consultations organized by the Malaysian Data Centre Alliance (MDCA) and facilitated by MDeC to bring down the cost of data centre operations.

Recently, IDC Researchs study on the total cost of doing business for data centre providers in 15 countries revealed that on average, Malaysian data centres spend between 20-25 percent of their operational cost on bandwidth; as compared to less than 5 percent in Singapore, Hong Kong, Japan, UK and the USA.

Bandwidth cost comprises of local and international components. Malaysia has challenges in both domestic and international connectivity which leads to relatively higher costs than Singapore and Hong Kong which are the regions recognized data centre hubs.

Wan Murdani Wan Mohamad, Director, Digital Enablement Division of MDeC says, “While our overall Global Data Centre Risk ranking is 16, Malaysia is ranked No.28 (out of the top 30 nations) when it comes to international connectivity (Cushman & Wakefield, 2013), which further highlights the high international bandwidth cost. New submarine cables are expected to be in service by Q2 of 2016 and it will address the international component of the cost but the domestic aspect needs to be equally addressed.”

“Domestically, the current level of competition in the market is not big enough to significantly reduce the bandwidth cost within Malaysia. This is why we are looking at ways to bring down the cost of bandwidth for the benefit of local data centre service providers to create a competitive ecosystem that attracts digital content and services players to serve the region using Malaysia as a base.”

As part of the Economic Transformation Programme (ETP), the data centre industry has been identified as one of the key economic growth areas. An initiative was introduced, known as the Entry Point Project (EPP3) under the Business Services National Key Economic Area (NKEA) to position Malaysia as a Data Centre hub, where MDeC was mandated as the lead agency to drive this initiative.

The initial phase of the Inter-DC Network initiative will leverage existing dark (unused) optical fibre infrastructure available in Cyberjaya to interconnect with participating data centres based there. Wan Murdani explains, “By aggregating all of their traffic, we will be able to drastically reduce the bandwidth cost through bulk purchase as typically 10 Gbps is 4 times cheaper that 1 Gbps on a per megabit basis.

“Typically dark fibre is based on a CAPEX investment model with a long term lease which enables the maximum utilisation of the fibre capacity specifically for large bandwidth applications. Usually with dark fibre, cost does not escalate with an increase in bandwidth usage. This is another way where cost savings will be realised.

“High-bandwidth data centres are a pre-requisite for Cloud, the Internet of Things and Big Data applications; and this Inter-DC Network at Cyberjaya will enable participating data centres to offer competitive prices in offering such services.”

Currently there are more than 20 data centres based in Cyberjaya, and ultimately the Inter-DC Network will facilitate the creation of a highly connected data centre hub that will attract further investments in this sector.

The Inter-DC Network initiative has been modelled after the highly successful Malaysian Internet Exchange (MyIX), which has successfully played a part in significantly reducing the cost of domestic bandwidth connectivity through the concept of aggregation nodes and co-location of network points of presence (POPs) for internet service providers. In addition there can be a synergy between these two initiatives which can be enhanced by interconnecting these two networks. Initial steps to do this have already been started and accepted by both MyIX and the Malaysian Data Centre Alliance (MDCA) members.

“MDeC believes that AIMS track record of successfully managing one of three key infrastructure nodes of MyIX, and their understanding of running a collective (data centre) industry business model will be an added advantage to this initiative.”

“Further to this, AIMS will also work with their partners who already have existing fibre infrastructures in Cyberjaya, which will enable them to complete this project in a shorter time frame, targeted to be operational by end of Q3 2015”, adds Wan Murdani.

AIMS will also act as a neutral party in ensuring the collective growth of the industry.

AIMS Group Chief Executive Officer Chiew Kok Hin says that the AIMS Groups strong carrier neutrality factor additionally gives the connecting data centres the flexibility of choosing their bandwidth provider, to offer their service provider clients more options to reach out to their end customers.

“AIMS is committed to the criteria set by MDeC including the 99.9 percent availability as per the MSC Performance Standards, high scalability to multiple terabits of capacity, high security focus and the ability to deploy the project in a short time by being centred in Cyberjaya where optical fibre is readily available.”

“We are honoured to be part of this exciting project that is set to revolutionise the data centre industry in Malaysia. By reducing our operational costs, data centres will be able to attract a higher number of investors looking to host their data in Malaysia and the ASEAN region.”

“Through the set-up of a common bandwidth infrastructure as purported by this Inter-DC Network, the local DC industry is given a booster to thrive.”

Wan Murdani shares that MDeC envisages a similar model to be extended beyond Cyberjaya in the future. “As far as this initiative is concerned, MDeC will oversee the initial three years of implementation and growth before handing over the project to industry stakeholders, by the fourth year of this initiative.”