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'Local unhealthy data centre market' led to Jaring asset acquisition, says AIMS Group

AvantiKumar | July 27, 2015
Existing customers of Malaysia's pioneer ISP will be migrated before 22 August 2015 deadline, said AIMS Group's Mohammad Azman.

Mohammad Azman Abdul Rahman, COO of AIMS Group 

Photo - Mohammad Azman, COO, The AIMS Group.

 

Malaysian carrier neutral data centre services operator The AIMS Group has secured the datacentre, cloud and network customer-related assets of Jaring Communications (Jaring), Malaysia's first ISP.

AIMS Group's chief operations officer Mohammad Azman said AIMS said the estimated total value of these customer assets - comprising unexpired contracts - exceeds RM50 (US$13.3) million.

Jaring had been placed into liquidation on 8th May 2015 under a High Court order, with KPMG Deal Advisory (KPMG) tasked to head the liquidation.

"AIMS was awarded Jaring's [customer] assets based on a balance of many factors - in terms of price, product portfolio, experience and skilled resources to fast track the necessary migrations between AIMS and the acquired Jaring operations," he said.

"The Group's decision to selectively acquire Jaring assets was carefully deliberated upon," added Azman.

 "We are very confident that AIMS will be able to optimise the purchase of assets from Jaring for our customers, as well as for the betterment of the data centre sector in Malaysia," he said.

Reality check

Azman said that the "example the demise of country's first Internet Service Provider (ISP) was a reality check on the current unhealthy state of the local data centre market."

"Just over the last few months, we have seen both Patimas and Jaring face liquidation and their customers facing operational risk and being forced to migrate their infrastructure to alternative service providers," he said.

"This actually marks a worrying trend, which can be directly attributed to the high number of players in the market - that is forcing many services providers to move into a price war to attract customers," said Azman.

"While the [ongoing] price wars may seem as benefitting end customers, it is both the service providers and their customers that will be suffering in the longer run," he said. "This imbalance caused by oversupply of space in the Malaysian data centre industry and depressed price levels is driving out some of the players, forcing some to shut down their operations."
 
However, Azman said that with the right business model, strategic positioning and partnerships, "...the AIMS Group will continue to display financial resilience and is well positioned to continue growing its revenue and market share and expand it data centre footprint both locally and within the region."
 
AIMS will be contacting customers in due time to ensure fast and smooth migration before the Jaring service termination deadline of 22 August 2015.

 

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