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Monday, April 14, 2014

Enterprises need time to adopt latest technology

Published: Saturday April 12, 2014 MYT 12:00:00 AM 
Updated: Saturday April 12, 2014 MYT 7:48:50 AM

BETWEEN the dotCom bubble and the rise of mobile applications in recent years, there were businesses that rode on the growth of the Internet.

They were the “second generation” of technology companies set up in the late 1990s through to the 2000s.

However, they are different from the latest breed of Internet-based companies, which rely on mobility, touchscreens and software, in the sense that they use more hardware and fixed devices in their businesses.

These companies include Censof Holdings Bhd, My EG Services Bhd (MyEG), Datasonic Group Bhd and JobStreet Corp Bhd.

A common denominator for MyEG, Datasonic and Censof is that a major portion of their clients are government agencies.

These “second-generation” tech companies have not really picked up on the mobile application trend. So, the question which arises is how they have been faring as technopreneurs in the 2010s.

Censof deputy group managing director Tamil Selvan Durairaj says tech companies have to keep pace with changes, but not all clients will want to utilise the latest technology immediately.

“Both enterprises and the Government, for valid reasons, take time to utilise the latest technology. Because of this, we need to ensure that our product portfolio continues to support the technology they are currently using, and also offer a path to allow them to use the latest technology when it is right for them.”

Tamil Selvan says that tech companies with big clients need to allow incremental adoption of new technology if that was easier for the client.

Censof is set to benefit from the impending implementation of the goods and services tax or GST.

Meanwhile, MyEG managing director T. S. Wong notes that the tech sector continues to be competitive, as the entrepreneurial spirit is intact, whether start-ups or established companies.

“The consumer tech market is obviously very competitive. Just look at the number of mobile application developers and hardware vendors in the market.”

However, Wong has another concern. He thinks the industry is not evolving in the right direction because the players are fragmented.

“Most outfits have between 10 and 20 personnel who undertake customised projects for their clients only. We need to create bigger companies which have the resources to compete against well-capitalised foreign players like Lazada, Zalora, Mudah and Rakuten by offering services for the masses and building their own brands.”

He says that while Malaysia has a good pool of technopreneurs, many are in the start-up scene and, unfortunately, most remain as start-ups for a long time due to the lack of seed and venture capital financing.

“As a result, whilst our entrepreneurs may have good products in the beginning, over time, they cannot compete with much-better-capitalised, foreign-funded and owned entities.”

It is a chicken-and-egg situation, he explains, because while there are not enough success stories featuring local tech start-ups, what really attracts investors are success stories like Jobstreet and Silverlake.

MyEG, an e-Government services provider, is currently implementing an electronic monitoring system for the Royal Malaysian Customs Department to monitor transactions at licence holders and the corresponding amount of tax to be collected.

JobStreet has gone ahead to create its own mobile application since 2010, given its business model as an Internet recruitment website that gives it the flexibility to adapt seamlessly.

Being the least reliant on hardware and clients’ mandate is a key reason why JobStreet’s business is scalable.

It has a foothold in Malaysia, Singapore, the Philippines, Indonesia, Vietnam and Japan.

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