Malaysian ICT spending to cross US$10 billion; relative growth to Asean countries slowing, services essential for sustainable growth
Confusion over definition of big data & social business; cloud and BYOD continue to dominate in 2013
MALAYSIA's information and communications technology (ICT) sector spending is expected to breach the US$10-billion mark for the first time in its history, according to a recent forecast by analyst firm IDC.
Speaking at its IDC Asean & Malaysia Top 10 Predictions for 2013 seminar here on Dec 6, Roger Ling, research manager, Asean services research group for IDC Asia/Pacific, noted that Malaysia will spend US$10.4 billion in 2013, representing a 7.7% increase from the year before (2012).
But despite the overall spend reaching a new milestone, the predicted growth percentage of 7.7% is lower than what Malaysia has been used to achieving in the past two years, a figure that has been closer to 11% on average.
Asked why this was so, Ling said that this was due to the decline of two major sectors in the Malaysian market – servers and personal computers (PCs).
“Yes, there is a decline in terms of year-on-year growth,” he said at a media briefing on the sidelines of the seminar. “The key thing that has slowed down is server and PC growth.”
Ling pointed out that in the past couple of years, Malaysian IT spending was bolstered by an increase in server purchases as well as the mini notebook (ultrabook) segments of the market. This upped the spending in earlier years but by 2012, the industry saw a decline in spending on these two sectors, he added.
“The growth is still there and is offset by spending in other areas such IT services and software,” he said. “It’s just not as robust as before.”
Jim Sailor, Asean general manager for IDC Asia Pacific, concurred, saying that the shift from hardware purchase to software and services is a big part of the decline.
Noting that this was not unusual merely in Malaysia, Sailor (pic) said, “We’ve also seen this across all the regions we cover, including Singapore. Software and services have become a much larger share of the pie, something that is experienced by other Asean countries.”
Sailor also said that compared to other countries within Asean, such as Indonesia and Vietnam, Malaysia is more advanced and already has a mature hardware install base. Given this reason, it’s not surprising to see Vietnam, Indonesia or Philippines spending a lot faster now [compared to Malaysia], he added.
Ling added, “What’s interesting is that when you look at these countries and compare them, you’ll find that Vietnam’s IT services market is higher than that of Indonesia. What’s skewing this is that Vietnam is moving into the new technologies such as cloud computing [which is less hardware based].
Ling also noted that Malaysia’s IT spending relative to other Asean countries has plateaued, and this could be a cause for worry.
“As the fundamentals [of IT spend] are changing, Malaysia cannot stay this way,” he said. “If we remain in status quo, we will continue to see a slow decline [in IT spend] in comparison to other countries in the region. What we need to do is to copy what countries like Vietnam are doing – that is to leapfrog ahead by embracing technologies such as cloud.”
Among the highlights of IDC’s Predictions for 2013 were two that were quite significant. The first is that many companies in Malaysia are not certain as to what big data is, while the second is the confusion over what social business can actually do for businesses.
Ling (pic) said that according to a recent survey conducted by IDC, 50% of respondents were not aware of what big data was, a figure that is highest among Asean countries. The survey also revealed another 50% of respondents having different perceptions of what big data actually is.
“What’s happening in the market now is that you have different pictures of what big data is and this has confused the market,” he said.
“Big data [today] is being seen merely from the context of analytics tools and organizations are trying to equate big data to these tools. The reality is that big data is much more than just analytics and vendors pushing the agenda will need to address specific verticals, such as the supply chain, and show how companies can gain from applying a big data solution holistically to their problem.”
On the issue of social business, Ling said many companies are approaching this subject in a very fragmented way, using it to do anything and everything from sentiment analysis to tracking what people are saying about their products.
“If all this analysis is done in silos, the analysis will also be fragmented. Companies would need to look at social business in a more holistic way,” he pointed out.
Of the top 10 predictions for Malaysia, other noteworthy ones include:
The telecom services market is to experience a year-on-year decline of 1.6% by the close of 2012, but will move to a gradual rebound, reaching 3.7% growth in 2013.
Cloud uptake will remain lethargic, but market perception of the 'new normal' will provide building blocks for enterprise cloud adoption. In tandem with this, IDC believes that cloud is no longer a buzzword, but the journey towards the delivery shift is far from hitting peak maturity
The consumerization of IT and Bring Your Own Device (BYOD) is not a future phenomenon but is already evolving currently. While spending appears to favor the growth of enterprise mobility, underutilization is creating a deadlock in achieving the intended potential of the phenomenon.
Bigger cracks will emerge between supply and demand for skilled local ICT workers. IDC believes that while the concept of leveraging technology as a strategic initiative is clear, therein also lies its Achilles' heel. Talent shortage is affecting both the supply and demand side and it's becoming quite apparent as organizations look towards implementing solutions to 'hyper-compete.' The shortage of skilled workers has become a blaring caveat to this.
Big data has implications with regards to the data that is being processed. Technology such as the cloud brings with it multiple issues with regards to data location and procurement patterns. Mobility and BYOD create problems with regards to data management, identity control and access and the social business phenomenon creates issues concerning overall control, data and content sharing.
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