GST to boost Malaysia’s enterprise software market: IDC

  • Businesses need to upgrade or replace legacy systems to be GST-compliant
  • 2013 revenue saw 0.4% YoY decline, IDC forecasts 6-8% revenue growth for 2014

GST to boost Malaysia’s enterprise software market: IDCTHE latest IDC’s enterprise software forecast shows that the upcoming implementation of the Goods and Services Tax (GST) in 2015 is one of the key drivers for growth in the Malaysian enterprise application (EA) market.
IDC expects 2014 to be a much better year compared to 2013, the market research and analyst firm said in a statement.
The new tax regime would be a boost to many EA vendors as it forces businesses to either upgrade or replace their legacy system with a system that is GST compliant.
“With GST coming into effect in the early part (April) of 2015, we predict there will be a scramble from businesses to be fully GST-ready in line with government regulations,” said Wong Yih-Khai (pic), market analyst, software, IDC Malaysia.
“The implementation will be one of the catalysts for growth in Malaysian EA market for 2014 and possibly in 2015 as well,” he added.
The latest forecast published in IDC’s Asia/Pacific Semiannual Enterprise Applications Tracker for 2H2013 (the second half of 2013) showed the purchasing pattern for Malaysian EA market generally peaks during the second half of the year.
The year 2013 was not an exception, with the market bouncing back from a slow first half due to the uncertainty that surrounded the nation’s general election (GE13) in May.
Although the Malaysian EA market did grow slightly in the later part of 2013 (3.2% revenue growth compared with the first half of 2013), the total revenue for 2013 was slightly lower compared with the total revenue for 2012 (0.4% decline year on year).
Total revenue in the second half of 2013 for the Malaysian EA market was US$118.7 million (RM383 million), representing 50.8% of the total revenue generated in the whole of 2013.
This shows that there were some key deals that were closed towards the latter half of 2013, a positive sign for the Malaysian EA market. In terms of total revenue, manufacturing continues to be the biggest contributor followed by retail, communications and media.
IDC also forecasts there will be a 6-8% of total revenue growth for Malaysian EA market in 2014 compared with the previous year.
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