Photo - Roger Ling, Research Manager, ASEAN Services Research, IDC Asia Pacific.
The Malaysian IT industry is expected to have a US$10 billion economy in 2013 as the result of a 'perfect storm', according to IT market research firm IDC, which outlined a theme of 'hyper-competing' for growth, speed and economics.
IDC Asia/Pacific research manager, ASEAN services research, Roger Ling, said hyper-competing or the dynamics of strategic manoeuvring among competitors especially in new markets where the status quo has yet to be defined is no longer just a buzzword but a reality, according to the company's 2013 forecast.
"Hyper-competing is not a buzzword but the current reality for organisations looking to capitalise on a confluence of factors that are shaping industries and nations," said Ling,
"While the perfect storm is brewing, there are opportunities available as there are shifting fundamentals shaping the success and growth that will also function as pivots for the IT industry."
He said that by using the latest IDC research and internal brainstorming sessions among IDC's regional and country analysts, the following are the top 10 ICT predictions in 2013 for Malaysia.
Ling said these 10 predictions are split across three different key segments. "Part 1: Malaysia ICT spending a response to hyper-competing for growth, speed and economics, Part 2: Banking on the third wave of IT in new normal of hyper-compete, and Part 3: Underlying fundamentals."
Response to hyper-competing
1. IT spending: the temporal slowdown creeps in, but hyper-competition intensifies in a US$10 billion IT economy
"IDC predicts that in 2013, Malaysia's IT spending will cross the US$10 billion mark," said Ling. "While this is a step in the right direction, IDC notes that spending slowed down to 7.6 percent year on year as compared to a more robust double digit growth the previous year. What makes a clear case for this prediction in the context of hyper-competing are the following factors that appear to create a deadlock:
"In the context of ASEAN, Malaysia's IT share of spending seems to have declined compared to other ASEAN countries. In 2007, Malaysia made up 18 percent of the ASEAN IT market. By 2013, this is expected to reduce to 17.2 percent and by 2016 anticipate Malaysia making up a mere 16.1 percent of ASEAN IT spending.
"While Malaysia's IT spending is expected to decline in the context of ASEAN, sentiments on competitiveness and ease of doing business - which directly or indirectly lead to IT related FDI - are improving. For the 2013 report, Malaysia is ranked 12th for ease of doing business beating out India, China, Philippines and Indonesia; climbing from 18th in 2012. For competitiveness, the nation did the same, garnering a stronger perception of competitiveness."
He added that with growing credentials among a host of ASEAN countries, the decline in IT spending seemed to contradict the positive light the country is in. "IDC believes that in an era of hyper-compete there will be changes, which will create stronger IT spending for Malaysia."
2. Telecommunications Spending: From rebound to growth
"IDC expects the telecom services market to experience a year on year decline of 1.6 percent by the close of 2012, but predicts a gradual rebound reaching 3.7 percent growth in 2013," said Ling. "Voice revenues are expected to continue on its steady decline with fixed voice at -4.3 percent and Wireless voice at -11.3 percent the rebound comes with the growth in both fixed data and wireless data at 13.1 percent and 14.9 percent respectively."
"On the flip side, telecom equipment is set for high year on year growth hitting 19.7 percent in 2013. Enterprise networks will reach 18.6 percent," he said. "Service provider equipment, 9.3 percent, and smartphone's a whopping 34.6 percent in terms of year-on-year growth."
Banking on the third wave of IT in new normal of hyper-compete
3. Cloud uptake will remain lethargic, but market perception of the new normal will provide building blocks for enterprise cloud adoption
Ling said that in 2012 IDC predicted that cloud as a buzzword in Malaysia would finally come to an end. A confluence of factors led to that prediction and in 2013, the theme rides on manifesting the current reality. "Cloud is no longer a buzzword, but the journey towards the delivery shift is far from hitting peak maturity."
He said this prediction included three bold claims:
- The local cloud market is yet to thrive, it is at a state where there is still much work to be done and is an uphill battle
- The local market is entering/in the new normal where there are other shifting fundamentals impacting
-Being in the new normal creates the opportunity for cloud to prevail
4. Big Data, it's about building business use cases
"With the growth of information creation, comes the business case to make informed decisions linking to the growth in adoption for Analytics," said Ling. "Referring to IDC's latest Software tracker, the Business Analytics market in Malaysia is estimated to reach US$96.83 million in 2012 and expected to grow by over 10 percent in 2013 to hit US$107.16 million. With data flowing in volume, variety, value and velocity [the 4Vs], IDC sees a shift in how organisations are capitalising on information creation."
He said that based on IDC's annual Software Study for year 2012, 50 percent of the respondents are not aware of Big Data, which is the highest among Southeast Asia countries. "And another 50 percent of respondents have a different perception on Big Data. In Malaysia, the current business use cases for Big Data that address the issues arising from all 4Vs are far and few between. The journey to uncover business use cases will create an inflection point for organisations looking to adopt Big Data."
Ready to leverage social media
5. Social Business: A fragmented reality
"With reference to the 'success' of using social media in the political space, it is clear that Malaysians are ready to leverage on social media as a means to progress," said Ling. "From a political front the business case is clear - use social media to push political wave of change. IDC predicts that in 2013 that same notion will resurface but will highlight a fragmented reality for upcoming social businesses. On a micro level, companies are treating social media within the confines of individual and unconnected marketing campaigns; resulting in a fragmented view of customers. Each campaign produces data and insight, but these are not necessarily carried over to the next campaign or shared across departments."
6. Mobility: The Journey from Striving to Thriving continues
"IDC sees consumerisation of IT and Bring Your Own Device [BYOD] as a phenomenon not of the future but the very evolving present," said Ling. "It is interesting to note that while spending appears to favour the growth of enterprise mobility, under-utilisation is creating a deadlock to achieve the intended potential of the phenomenon. With reference to IDC's C-suite Barometer Survey for 2012, the top two imperatives for the hyper-growth case is cutting cost and efficiency gains. Coupling these imperatives with the current state of under-utilised devices leads IDC to predict that in 2013, the journey from 'surviving' with enterprise mobility will move towards 'thriving' as the hyper- compete case becomes essential."
The talent shortage: bigger cracks
7. Cracks between supply and demand of skilled ICT talent
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