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Malaysia's IT spending up 6.4%, to surpass US$19B in 2013: report

AvantiKumar | Aug. 1, 2013
Emerging Asia Pacific countries remain 'a light spot' in our global forecast of IT spending, says Gartner's Derry Finkeldey.

Derry Finkeldey Principal Research Analyst Gartner modified 

Photo - Derry Finkeldey, Principal Research Analyst, Gartner.


According to analyst firm Gartner's July study of global IT spending, Malaysia should reach RM61.9 billion (US$19.05 billion) in 2013, which is up 6.4 percent over 2012, reflecting a generally positive trend in emerging economies in the Asia Pacific region.

"The countries of "Emerging Asia Pacific" continue to grow and are a light spot in our global forecast," said Gartner principal research analyst, Derry Finkeldey.

"The 2013 constant-currency spending growth in Malaysia has remained the same, with constant $ spending growth change in 2013 forecast increasing by +0.1 percent. In US$ terms, we forecast that Malaysia's IT spending will grow 5.9 percent in 2013, rising to 6.5 percent in 2014 (6.4 percent and 6.7 percent respectively in constant currency terms)," said Finkelday to Computerworld Malaysia.

She said the forecast comprises - Telecommunications services (RM33.9 billion; US$10.43 billion), Devices (RM13.3 billion; US$4.09 billion), IT services (RM9.8 billion; US$3.01 billion), Software (RM3.3 billion; US$1.01 billion), and Data Centre Systems (RM1.7 billion; US$0.52 billion).[See Table 2.]


Gartner Malaysia IT Spending - July 2013 modified 

Downward revision in worldwide IT spending

Meanwhile, worldwide IT spending should reach US$2.7 trillion in 2013, which is a 2 percent increase from 2012 spending of US$3.6 trillion. Last quarter, Gartner's forecast for 2013 IT spending growth in U.S. dollars was 4.1 percent. The 2.1 percentage point reduction mainly reflects the impact of recent fluctuations in U.S. dollar exchange rates; growth in constant currency is forecast at 3.5 percent for 2013, down only slightly from last quarter, said Gartner managing vice president Richard Gordon. [See Table 1.]

"Exchange rate movements, and a reduction in our 2013 forecast for devices, account for the bulk of the downward revision of the 2013 growth," said Gordon. "Regionally, 2013 constant-currency spending growth in most regions has been lowered. However, Western Europe's constant-currency growth has been inched up slightly as strategic IT initiatives in the region will continue despite a poor economic outlook."

He said the forecast for spending on devices in 2013 has been revised down from 7.9 percent growth in Gartner's previous forecast to 2.8 percent. The decline in PC sales, recorded in the first quarter of 2013, continued into the second quarter with little recovery expected during the second half of 2013. "While new devices are set to hit the market in the second half of 2013, they will fail to compensate for the underlying weakness of the traditional PC market. The outlook for tablet revenue for 2013 is for growth of 2.8 percent, while mobile phone revenue is projected to increase 7.4 percent this year."

"In addition enterprise software spending is expected to grow 6.4 percent in 2013," said. "Growth expectations for customer relationship management (CRM) have been raised to reflect expanded coverage into e-commerce, social and mobile. Expectations for digital content creation and operating systems have been reduced as software as a service (SaaS) and changing device demands impact traditional models and markets."

Telecom services spending should grow 0.9 percent in 2013. "Fixed broadband is showing slightly higher than anticipated growth. The impact of voice substitution is mixed as it is moving faster in the consumer sector, but slightly slower in the enterprise market."


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