Kyndryl remains focused on sustainable growth in ASEAN

“We see opportunities, at least in ASEAN, to be still very lively compared to many other parts of the world,” says Andrew Lim, MD for ASEAN and Korea at Kyndryl.

When it comes to digital transformation and AI adoption in Southeast Asia, Kyndryl continues to be at the forefront in providing customers with the best solutions that meet their demands. The IT infrastructure services provider partners with a variety of vendors and continues to expand its presence in Southeast Asia with a growing number of customers.

Some of Kyndryl’s leading customers in the region include Singapore Airlines, Singapore Aero Engine Services Private Limited, Indonesia’s Barito Renewables, Thailand’s Bank of Ayudhya and Bank of the Philippine Islands. Kyndryl provides these customers with a variety of services that range from GenAI adoption to cybersecurity.

CRN Asia caught up with Andrew Lim, MD for ASEAN and Korea at Kyndryl to understand more about their growth in the region as well as the challenges and opportunities they from customers in Southeast Asia.

Can you tell us more about Kyndryl’s presence in the region.

For our business in ASEAN, we operate out of six countries - Singapore, Malaysia, Indonesia, Philippines, Thailand and Vietnam. Vietnam is our smallest piece of business. We have a small footprint in both Hanoi and Ho Chi Minh. But our biggest piece of business is in Singapore, like many other multinational organizations.

More than 60% of our business comes from the FSI industry, specifically in both banking and insurance on the enterprise side. We have a mixed portfolio across all the countries, but banking and insurance are our mainstay.

As you know, banking and insurance have mission-critical systems. We manage and operate mission-critical systems for our clients in the ASEAN region. Over the past year or so, we have been able to acquire some new clients, and new logos across the region. In the last fiscal year, we managed to acquire 10 new logos into our portfolio. They are a mix of both managed services clients as well as project services clients and consulting clients.

What are customers looking at now in their tech journey?

ASEAN has pretty much gone through the digitalization phase, especially during the pandemic years. Lots of companies embarked on new ways of working, new offerings in new business models in order for them to touch their clients in a manner where it's feasible during the pandemic years. And as a result, I think a lot of clients have already spent the bulk of their expenditure on digitalization.

Now it's all about harnessing what they have in terms of modernizing their infrastructure to be able to be ready for the next phase of AI. That's what we're seeing in the marketplace. What we're seeing also, especially in the ASEAN space, as the hyperscalers continue to make investments, especially in countries like Indonesia, Malaysia, Thailand, not so much in Singapore, because Singapore is already a fairly mature market in terms of adoption of cloud but platform as a service as well, not only infrastructure as a service.

We see that this is a phase where countries like Malaysia, who's still very much, I guess, less cloud ready than other countries, they are adopting it in the coming years, in the coming year or two, we see this acceleration. And as part of this acceleration now, we are in a world of AI, as we all know. We are also seeing a lot of clients having demands on how to better manage their data, how to better get their data ready so that they can harness the potential of AI.

And as a result, I think compute as an overall will increase and should increase in the next few years.

How challenging is it for customers in this region to adopt AI?

It's definitely an environment that is constantly changing. As you can see previously, early movers like Microsoft's Co-Pilot and OpenAI's ChatGPT had a distinct advantage. But moving on now, that advantage is gone. As you see different models come out recently, Google came out with a Gemini 2 platform and then very soon came out with Gemini 2.5 platform.

These are all fast-moving technology areas. And this has been one of the biggest challenges as clients look to adopt various models in harnessing the power of AI. They have to consider what's coming up next.

As a technology service provider, we have to be agile in terms of how we work with this set of technologies and constantly be updated on the new things that are coming out to be able to help out, to be able to give advice to our customers with regards to adoption and how we can adopt them for future ready businesses.

Apart from AI, is cybersecurity also seeing increasing demand from customers?

Cybersecurity in ASEAN is the fastest growing space for us. As investments in digitalization increase and have increased over the past few years, there's also a lot of threats from outside actors to a corporation's assets.

Cybersecurity investments are growing double digits, at least for the next few years, from an addressable market perspective. And we've also been growing that practice by extending the footprint of both our cybersecurity practice and our cybersecurity solutions, especially in partnerships in those areas to a considerable size. We've made investments, especially out of the Singapore market to avail those skill sets for our organizations, our client organizations across the region.

And this also was exhibited in the partnership with LifeTech in Malaysia. LifeTech is a security operations center (SOC) provider. We not only work with LifeTech in helping them elevate their security posture in terms of their offerings but also partner with them from a go-to-market perspective for their marketplace.

Does Kyndryl also work with the mid-market companies and SMEs?

We do. Not in every case, but sometimes as you work on AI opportunities, especially GenAI opportunities, sometimes it's faster for a mid-market or small-medium enterprise to adopt.

Once they adopt that use case, they have less legacy to deal with. This allows us to move with more agility and to be a little bit quicker in terms of rolling that out. Whereas large enterprises sometimes have to deal with a lot of legacy and legacy systems, legacy policies need to be overcome before they can move to production with regards to GenAI use cases.

While enterprises are a big part of our business, there are a lot of very nice-sized medium enterprises that we work with that sometimes can have that substantial spending that we would like to access. We continue to work on this front. Of course, we don't so much differentiate between the global 2,000 enterprises versus the local mid-market segment.

How is Kyndryl and customers preparing for any potential fallout from tariffs?

For us, on the services side, there is no real impact, at least not now. We hope that there won't be any on the services side. I don't think there will be any. We don't see that much right now.

Of course, on the product side, there are discussions on whether we should buy now, should we buy later considerations that our customers are going through. We are working with them. Not all cases are equivalent. Of course, there is concern depending on the type of organization that you work with.

If you work with, let's say, a logistics provider, then there's clearly concerns about some softness potential in the marketplace. We continuously work with them and monitor this situation.

We don't see that as anything that is impeding us or putting a roadblock on many of the initiatives that our clients are looking at.

With that being said, what is Kyndryl looking to achieve most this year?

I think we're very clear that the focus will be on growth. We’re looking at sustainable growth. We have a nice piece of business in the ASEAN region, having presence in those critical countries.

We see opportunities, at least in ASEAN, to be still very lively compared to many other parts of the world. We see opportunities in AI and the ever-evolving technology landscape. We see positives in investments from hyperscalers in our ASEAN region, in the ASEAN countries.

And we see modernization as something that we can definitely do very well for our customers in this space. We see security as a fast-growing business for us, given the needs of the marketplace and the needs of our clients.

So, these are the areas where we will continuously make investments and continuously double down to ensure that we have the best possible capabilities to address the ever-changing needs of our clients.