Cisco Malaysia Pre-Budget Response – Malaysian National Budget 2009

Kumaran Singaram, Managing Director, Cisco Malaysia:

Cisco’s wish-list:
· Propel the growth of world-class, energy-efficient data centers to attract private investment
· Develop, attract and retain intellectual capabilities to strengthen human capital
· Standardise taxes on IT equipment to encourage technology adoption among SMBs

No one today disputes the fact that technology plays a significant role in driving productivity, innovation and national transformation. As the National Budget 2009 aims at building a resilient nation for sustained growth and shared prosperity, it is imperative to spur further adoption and capitalise on the power of technology in enabling business efficiency and driving competitive advantage. One of the areas that Cisco feels the government should focus on is the establishment of energy-efficient data centers with world-class facilities in Malaysia. As energy costs continue to escalate, data centers need to be re-architected to minimise power consumption, while at the same time maximising data availability, storage efficiency, security and compliance.

This is an area that Malaysia can provide leadership in the region given the abundant supply of land and the presence of an excellent basic infrastructure. Cisco sees many MNCs looking for places in the region to situate their data centers and Malaysia should capitalise on this to achieve the country’s goal of attracting private investment.

Using the network as a platform, Cisco has the technologies and the expertise to help organisations in Malaysia build these next generation data centers.

The quality of human capital, especially professionals and skilled workers, is another critical area in attracting greater investment flow. Cisco applauds the government for recognising its importance, and hopes for continued efforts in developing, attracting and retaining intellectual capabilities to strengthen human capital.

However, one area that the government could look into with regards to retaining talented human capital is in the tax structure, particularly in the taxation of stock options and grants. The government should consider their decision to tax such items as it takes away one attraction that Malaysia used to have for knowledge workers.

There is also a vital need to promote indigenous skills development and enhancement in order to strengthen the domestic human capital. This can be achieved by enhancing the quality of education and creating opportunities for capability development, especially in the area of networking technologies.

An extensive pool of networking specialists is required to support current and emerging industry needs, as networks become more complex and Web 2.0 and other collaboration technologies place greater demands on the infrastructure. There exists a shortage of professionals with such skills in Malaysia. Cisco has been doing its part through the Cisco Networking Academy program to address the skills gap, partnering with established educational institutions and we hope to see more support from the Government for such initiatives.

Another area that Cisco hopes to see additional focus on is measures to help the small and medium-sized businesses (SMBs), in particular to encourage the adoption of business-critical technologies among these companies.

Apart from the recently announced RM500 million worth of soft loan allocated for SMBs to upgrade their processes and modernise their operations, Cisco recommends the government to ratify further standardisation of taxes on IT equipments keeping in mind that capital expenditure is a big concern for the SMBs. There is a need to evaluate and re-classify advanced technologies such as Unified Communications that are proven to deliver business benefits to organisations. Subsequently, a lower and consistent tax structure should be imposed to ensure that SMBs are able to afford these technologies.