Malaysia IT spending to reach RM65b in 2019

KUALA LUMPUR: Spending on information technology (IT) products and services in Malaysia is forecast to reach RM65.2 billion this year, an increase of 4.6 per cent from 2018, according to Gartner Inc.

Worldwide IT spending, meanwhile, is projected to total USD$3.8 trillion in 2019, an increase of 3.2 per cent from expected spending of USD$3.7 trillion in 2018.

“While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast,” said John-David Lovelock, research vice president at Gartner.

In a statement, he said this indicates that more enterprises will use cloud services instead of buying their own servers.

“As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business,” Lovelock added.

Enterprise software spending is forecast to experience the highest growth with an 8.3 per cent increase in 2019.

Software as a service is driving growth in almost all software segments, particularly customer relationship management (CRM), due to increased focus on providing better customer experiences.

Cloud software, meanwhile, will grow at more than 22 per cent this year compared with 6 per cent growth for all other forms of software.

“While core applications such as enterprise resource platform, CRM and supply chain continue to get the lion share of dollars, security and privacy are of particular interest right now.

“Some 86 per cent of recently surveyed global chief information officers have deployed or plan to deploy cybersecurity technology in the next 12 months,” the statement said.

In 2018, data centre systems are expected to grow 6 per cent, buoyed by a strong server market that saw spending growth of more than 10 per cent over the last year, and in 2018 will come in at 5.7 per cent growth.

However, by 2019, servers will shift back to a declining market and drop 1 per cent to 3 per cent every year for the next five years.

This, in turn, will impact overall data centre systems spending as growth slows to 1.6 per cent in 2019, Gartner said.

IT services will be a key driver for IT spending in 2019 as the market is forecast to reach USD$1 trillion in 2019, an increase of 4.7 per cent from 2018.

“An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organisations to optimise enterprise external spend for business services such as consulting.

“In a recent Gartner study, 46 per cent of organisations indicated that IT services and supplier consolidation was in their top three most-effective cost-optimisation approaches,” it added.

Source: NST