Gartner: Malaysian IT Spending to Reach MYR65.2billion in 2018

Malaysians are forecasted to spend close to MYR 65.2 billion this year on technology products and services, 5.7% increased from 2017. Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5% from 2017, according to the latest forecast by Gartner, Inc.

Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession,” said John-David Lovelock, research vice president at Gartner. Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift. Projects in digital business, blockchain, Internet of Things (IoT), and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth.”

Enterprise software continues show strong growth, with worldwide software spending projected to grow 9.5% in 2018. Organisations are expected to increase spending on enterprise application software in 2018, with more of the budget shifting to software as a service (SaaS). The growing availability of SaaS-based solutions is encouraging new adoption and spending across many subcategories, such as financial management systems (FMS), human capital management (HCM) and analytic applications.

In 2017, the devices segment experienced growth for the first time in two years with an increase of 5.7%, with expected growth of 5.6% in 2018. End-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward, while unit sales are forecast to be lower. PC growth is expected to be flat in 2018. The impact of the iPhone 8 and iPhone X was minimal in 2017, as expected. iOS shipments are expected to grow 9.1% in 2018.

 

Malaysian IT Spending Forecast (Billions of Malaysian Ringgit)

Segment 2017 YR 2018 YR 2019 YR
Sum of End-User Spending

 

 

 

 

Devices   11,314   12,429   13,463
Data Centre Systems     2,229     2,207     2,189
Software     4,697     5,207     5,786
IT Services   11,418   12,138   12,856
Communications Services   31,968   33,186   34,164
Total Sum of End-User Spending     61,626   65,166   68,459

Source: Gartner (January 2018)

Worldwide IT Spending Forecast (Billions of U.S. Dollars)

2017

Spending

2017

Growth (%)

2018

Spending

2018

Growth (%)

2019 Spending 2019 Growth (%)
Data Center Systems 178 4.4 179 0.6 179 -0.2
Enterprise Software 355 8.9 389 9.5 421 8.4
Devices 667 5.7 704 5.6 710 0.9
IT Services 933 4.3 985 5.5 1,030 4.6
Communications Services 1,393 1.3 1,427 2.4 1,443 1.1
Overall IT 3,527 3.8 3,683 4.5 3,784 2.7

Source: Gartner (January 2018)

“Looking at some of the key areas driving spending over the next few years, Gartner forecasts $2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity,” said Mr. Lovelock. “That business value is attributable to using AI to, for example, drive efficiency gains, create insights that personalize the customer experience, entice engagement and commerce, and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data.”

 

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