Google Cloud makes inroads in Southeast Asia

Google Cloud has been pushing into the enterprise space in Southeast Asia for several years now, going beyond its base of tech unicorn customers such as Indonesia’s Tokopedia and Singapore’s NinjaVan.

The cloud supplier has been signing up more enterprise customers of late, including Indonesian conglomerate Salim Group, because the Covid-19 pandemic has speeded up digital transformation efforts across the region, said Ruma Balasubramanian, Google Cloud’s new managing director for Southeast Asia.

“We’re seeing lots of demand in the traditional enterprise and a year ago that may not have been true,” Balasubramanian told Computer Weekly. “The pandemic has created a sense of urgency.”

Balasubramanian, a former Cisco executive who took up the region’s top job in December 2020, said retailers, for example, are doing “interesting things around sales events and gamification” while building their digital front door on the cloud.

Such initiatives were more of nice-to-have a year ago, but have taken off in the past six to 12 months, she said. “They’ve just had a lot more momentum in terms of shifting to the cloud.”

The enterprise segment is often difficult to penetrate for cloud providers, which have had to navigate organisational hierarchies and fulfil strict compliance and security requirements, particularly those in regulated industries.

But Balasubramanian does not see that as a challenge, as the region’s cloud penetration stands at about 20%, she said. “The remaining 80% is very interesting to us, and that is squarely in the mid-market, as well as large enterprises,” she added.

To crack the market, Balasubramanian said Google Cloud is leveraging some of its industry technology such as contact centre artificial intelligence (AI), which is being adopted by telcos, retailers and service providers in the region.

And like its rivals, Google Cloud has teamed up with enterprise software giants SAP and VMware to tackle major enterprise workloads that are being moved to public cloud services.

But in Southeast Asia, most public cloud suppliers operate cloud regions only in Singapore and Indonesia, driving enterprises outside the two countries to host workloads beyond their shores. Although this arrangement works for companies like Globe Telecom in the Philippines, others may be held back by data residency requirements.

“One of the reasons Indonesia was so important to us in terms of having a public cloud presence is that for many quarters, we were tracking some of the data sovereignty requirements there,” said Balasubramanian. “We felt it was absolutely crucial for that market to build a public cloud presence there.

“As for some of the other markets across Southeast Asia, we are still examining them and are actively working with regulators across Vietnam, Thailand and Malaysia, in particular, to assess what is happening there and the opportunities for a local presence.”

In February 2021, the Malaysian government announced the MyDigital digital economy blueprint to shore up the country’s digital infrastructure, among other goals, including an investment of between 12 and 15 billion ringgit over the next five years for four cloud service providers – Microsoft, Google, Amazon and Telekom Malaysia – to build and manage hyperscale datacentres and cloud services.

Balasubramanian stressed, however, that not having a cloud presence is certain markets has not hindered Google Cloud’s growth. “No customer has said they absolutely need a public cloud region in their country in order for them to do business with us,” she said.

According to Canalys, Google Cloud was the third-largest cloud service provider globally in the fourth quarter of 2020, with a 7% market share.

It reported growth of 58% in that quarter as it pushes its “open cloud” strategy, emphasising sovereignty, sustainability and multicloud management, and maintains a focus on five vertical industries – retail, healthcare, financial services, media and entertainment, and manufacturing.

The company has also aligned its sales force and channels to these industries as it builds a partner network with industry-specific expertise and deep specialisations in its priority technologies, such as machine learning, analytics and data management.