TIME acquired 60% of AVM Cloud: What does it mean for cloud?

TIME dotcom recently made headlines for acquiring 60% stake in AVM Cloud, Malaysia’s leading private cloud computing provider, for US$ 14.51 million. The acquisition is driven by the group’s efforts to strengthen the company’s footprint in cloud services, alongside their core offerings which include telecommunications solutions, data centres as well as domestic and global network connectivity for their customers across ASEAN. Although the acquisition announcement did not boost the company’s share price on that day, the company’s market capitalisation is at its all-time high at US$ 1.9 billion.

How does this acquisition impact the cloud market in Southeast Asia?

1) Hybrid vs. Public Cloud Battle

AVM Cloud pioneered the private cloud computing scene in Malaysia since 2010. It serves over 200 corporate customers and 250 cloud tenants across various industries. Leveraging key alliances with VMware, Dell Technologies, and Trend Micro, the company has a sizeable product range and customer base.

The acquisition of AVM Cloud by TIME will mean the latter’s entrance into private and hybrid cloud space. AVM’s expertise in cloud solutions coupled with TIME’s ability to address data sovereignty issues with data centers in major cities across ASEAN means the alliance may push end-users towards a private and hybrid cloud future. As many end users have security concerns for public cloud and data locality preference and because they want a stronger data governance, they might find this offer appealing. With that, there may be a battle between the clouds in the region.

However, this alliance might not see fruition in the 6-18 months to follow, as their technologies and in-house expertise would need time to align. The real competitive threat towards providers might only begin post 2023.

Also, global providers are trying to tackle issues organizations face surrounding stringent data regulation when adopting public cloud solutions with their unique hybrid cloud approach. One recent development of such is AWS Outpost. Hence, alliance like TIME-AVM Cloud may not emerge victorious if their technology readiness is low.

2) Affordable cloud alternative

The acquisition of AVM Cloud also witnesses the efforts of TIME to provide end-to-end solutions (E2ES) for their customers and prospects. The acquisition marks the convergence of telecommunications and cloud computing. As telecom providers play an important role in the cloud market and ecosystem, having one company that can provide both a telecom network and cloud services could potentially increase their market share significantly. End-users will be able to subscribe to cloud infrastructure, migrate its system and even purchase security solutions from one provider, which ultimately streamlines operations for them. This also reduces any latency issues the end-user may face, once again adding on to TIME’s versatility as a cloud service provider (CSP), suggesting more competition in the market.

Another benefit of providing E2ES is the ability to reduce security breaches that sometimes occur during migration services by service partners. TIME’s 1,200-strong professional workforce and AVM’s 10 years of cloud expertise could mitigate some of these issues as the alliance can utilize in-house capabilities. Also, often, global CSPs have limited control over service pricing set by partners, which could result in high investment. With this alliance, there is a high possibility of addressing these issues. Henceforth, TIME-AVM Cloud may position itself as an affordable cloud alternative to gain preference by end-users.

3) A new regional competitor

In addition, TIME continues to expand its regional presence across ASEAN, with notable presence already in Malaysia, Singapore, Thailand, Cambodia and Vietnam. The company recently also signed a definitive agreement with 49%-owned Symphony Communication Public Co Ltd, one of the leading publicly-listed fixed-line telecommunication service providers in Thailand. This agreement supports TIME’s vision of developing a data center business in Thailand with the first project being the establishment of its first AIMS branded data center in Thailand.

TIME will be able to further capitalize on their regional footprint as the company is recognized for their competence in managing data centers and the newly acquired cloud computing expertise simply adds on to their value proposition. Both of TIME’s recent acquisition strategies are in-line with the rising regional demands for cloud services and data centers, accelerating the company’s growth across ASEAN. With their positioning and offerings, TIME could be a contender for global and local CSPs, especially in developing markets like Cambodia and Thailand.

Twimbit takeaways

  1. Increased competition in the local and regional cloud market is expected from TIME’s possible cloud offerings with low prices and multifaceted services from one centralised hub.
  2. TIME may be able to sway consumers towards private and hybrid solutions – by communicating reduced security concerns and possibly overcoming data locality issues.
  3. With Southeast Asia’s cloud market growing at rampant speed, the region may witness more acquisitions between Independent Software Vendors (ISV) and System Integrators (SI), and even cloud providers for future opportunities.

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