Malaysia’s IT spending to grow 10% in 2014, outpacing APAC: Gartner
By Digital News Asia January 9, 2014
- Total IT spending in APAC forecast to reach US$758bil in 2014, up 4.2% from 2013
- Worldwide IT spending projected to reach US$3.8 trillion in 2014, up 3.1% from 2013
MALAYSIA’S total IT spending is forecast to grow 10.2% to reach almost RM69.8 billion (US$21.24 billion) in 2014, said Gartner Inc, while total IT spending in the Asia Pacific region is forecast to reach US$758 billion in 2014, up 4.2% from 2013.
This is slightly lower than the 2013 growth of 4.7%, while worldwide IT spending is projected to total US$3.8 trillion in 2014, a 3.1% increase from 2013 spending of US$3.7 trillion, according to the latest forecast by the market research and analyst firm.
In 2013, the global market experienced flat growth, growing 0.4% year over year. Spending on devices (including PCs, ultramobiles, mobile phones and tablets) contracted 1.2% in 2013, but will grow 4.3% in 2014 (see Table 1 below), the firm said in a statement.
Gartner analysts said convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, will take place as differentiation will soon be based primarily on price instead of devices' orientation to specific tasks.
Enterprise software spending growth continues to be the strongest throughout the forecast period. The 2014 annual rate is expected to grow 6.8%. Customer relationship management (CRM) and supply chain management (SCM) experienced a period of strong growth.
“Investment is coming from exploiting analytics to make B2C (business-to-consumer) processes more efficient and improve customer marketing efforts,” said Richard Gordon, managing vice president at Gartner.
“Investment will also be aligned to B2B (business-to-business) analytics, particularly in the SCM space, where annual spending is expected to grow 10.6% in 2014.
“The focus is on enhancing the customer experience throughout the presales, sales and post-sales processes,” he added.
Last quarter, Gartner's forecast for 2014 IT spending growth in US dollars was 3.6%, 0.5 percentage points higher than the current forecast.
"A downward revision of the 2014 forecast growth in spending for telecom services – a segment that accounts for more than 40% of total IT spending – from 1.9% to 1.2% is the main reason behind this overall IT spending growth reduction,” said Gordon.
“A number of factors are involved, including the faster-than-expected growth of wireless-only households, declining voice rates in China and a more frugal usage pattern among European customers.
“The latter coincides in Western Europe with a breakout of fierce price competition among communications service providers to retain customers and attract new ones," he said.
The data centre systems spending growth outlook for 2014 has been cut from 2.9% in its previous forecast to 2.6%. This is mainly due to a reduction in the forecast for external controller-based storage and enterprise communications applications, Gartner said. These segments represent 32% of total data centre system end-user spending.
Gartner has slightly revised downward the IT services compound annual growth rate between 2012 and 2017. The largest contributor to this revision comes from reductions in IT outsourcing – specifically, in colocation, hosting and data centre outsourcing growth rates.
“We are seeing CIOs (chief information officers) increasingly reconsidering data centre build-out and instead planning faster-than-expected moves to cloud computing. Despite these small reductions, we continue to anticipate consistent four to five percent annual growth through 2017,” said Gordon.
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