Photo - Frederic Giron, Vice President, Principal Analyst, Forrester Consulting
Multiple Forrester studies throughout 2012 indicate that Malaysia organisations remain less optimistic about business growth, particularly when compared to Indonesia and the Philippines. This lack of optimism stems from economic and political concerns. A significant portion of the Malaysian GDP is linked to exports of manufactured and high-tech products to Western economies and China, which explained the relative softness of the economy in 2012.
The political situation (corruption scandals, lack of trust in the current government's reform) also caused some tension in 2012 on the overall business confidence and willingness to drive investments. Whereas Malaysia seemed like a more stable and promising market three to five years ago (and before) our data suggests the broader political and social concerns are seeping into the attitude toward ICT investments. As a result of this, we revised our growth forecasts for the IT purchases in 2012 down by a couple of points to about 7 percent in 2012.
In 2012, BI/Big Data (business intelligence) and mobility were the key high growth areas in Malaysia, as in the ASEAN region. Our Forrsights Budgets and Priorities survey run in the second quarter of 2012 in Malaysia showed that BI adoption increased to 15 percent of respondents in 2012 with another 27 percent of respondents planning to invest in real time predictive and customer analytics in the next 12 months. Other Forrsights data show that information workers in Malaysia use, on average, more than three mobile devices to help them with their work. The following segments also witnessed good traction in 2012:
- The packaged software package witnessed some good growth in the financial services and public sectors. Consulting and systems integration segments benefited from these new software investments.
- There was continued investments in the data centre services space from third party data centre providers as well as telecom operators. Investments are clearly ahead of the market demand, even though we have seen some demand uptick in terms of business continuity / disaster recovery services.
On the negative side, the hardware segments dragged down the overall IT purchases growth in 2012. In particular, lengthening sales cycle in the manufacturing industry throughout 2012 impacted the overall IT spending growth. From a hardware product perspective, PC shipments suffered from a lack of demand due to the slowing economic environment, competition of smartphones and tablets and the launch of Windows 8 in the second part of 2012.
From the Forrester point of view, 2013 should be slightly better as the country benefits from a strengthening domestic consumption, the recovery of the economic growth in China and a continuing strong economic performance in other ASEAN countries. The roll out of the Economic Transformation Program should also boost investments, with some positive effect on IT spending. We expect growth of IT purchases to reach 8 percent in 2013, slightly better than in Singapore, although much slower than the expected growth in countries like Indonesia.
While the risk of global economic crisis still exists, Forrester does not expect any major economic slowdown in 2013. The reliance of the Malaysian economy on fast growing economies like China and Indonesia in 2013 should cushion any potential economic slowdown in the West. The main risk for Malaysia in 2013 is tied to the lack of political progress with the elections planned for April 2013.
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