Malaysia’s UC&C market plunges 14.5% in first half of 2013: IDC
By Digital News Asia November 8, 2013
- Vendor revenue fell drastically; 1H13 was worst half since 2011 across all product categories
- However market recovered from GE13 doldrums in second quarter; inching up 22% over Q1
MALAYSIA'S unified communication and collaboration (UC&C) market recorded US$35.6 million in factory revenue terms for the first half of 2013 (1H13), down 14.5% from the same period in 2012, according to IDC.
The compression is even sharper if compared to the second half of 2012 (2H12), with revenue plunging nearly 25% half-over-half, notably in the enterprise telephony's market, the research and analyst firm said in a statement.
Nevertheless, enterprise telephony continues to play an integral part in the UC&C market, contributing 46.5% of total revenues in 1H13; followed by enterprise collaboration apps (32.2%); contact centre solutions (14%); and enterprise videoconferencing solutions (7.2%).
In the 2H12 release issued by IDC earlier, the UC&C market had inched up to US$47.5 million, strongly accelerated by the growth of IT spending and investments in local businesses prior to the Malaysia’s 13th General Election (GE13).
Local businesses pushed their financing and resources to implement developments while the existing government was in place, to ensure they are familiar with the guidelines, as policies tend to change when a new government takes over.
This led to an investment slowdown in 1H13 by most local businesses, IDC said.
The possibility of a change in government also caused confidence levels to plunge among local businesses, government-linked companies (GLCs) and, to a certain extent, multinationals when it came to investing in the UC&C space.
Most IT buyers revealed that they had preferred to take a ‘wait and see’ attitude rather than invest during the GE13 period.
“Vendor revenue has fallen drastically where 1H13 has experienced the worst half since 2011 across all product categories,” said Tan Hwee Xian, market analyst at IDC's Asia/Pacific Communications Group.
“Most results of the key vendors like Cisco, Avaya, IBM, Alcatel-Lucent, Polycom and Microsoft were staggered in 1Q13.”
However, Tan said that this has not bogged down the market, with the post-election period between mid-May and June (2Q13) seeing an immediate uptake of projects as business inched up 22% in 2Q13, compared to 1Q13.
“IDC is confident that UC&C market performances in 2H13 will be better than 1H13,” she said. “However, it predicts that total revenue in 2013 would be less stellar than it was in 2012."
This marks a Compound Annual Growth Rate (CAGR) of 5%, contributed mainly by factors such as a fall in bandwidth pricing; upgrading of network infrastructure; trends towards IP (Internet Protocol) and mobility; cost savings over SIP (session initiation protocol) trunking; growing popularity of voice and data convergence; as well as open IP platforms and migration.
IDC expects that absolute revenue would continue to be significant, although growth rate will be deterred by some key threats like cloud and freemium app services that are causing the traditional on-premise market to slow and be replaced.
With widespread availability of ‘as-a-service’ models in the marketplace, IDC is expecting more opex-friendly (operating expenditure) UCaaS (Unified Communications as a Service) offerings to appear in the market and users to switch to smaller systems and/ or software-based solutions, rather than large hardware-based systems.
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