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What's really in store for Malaysia's IT industry in 2017?

AvantiKumar | Jan. 9, 2017
(MAJOR UPDATES) New leadership insights from PIKOM, MDEC, CyberSecurity Malaysia, Cyberview, IDC, Gartner, BAE Systems, 11street, Canvas/Instructure, Cloudera, Hitachi Data Systems (HDS), Hitachi Sunway, Red Hat, Cisco, AIMS Group, Fortinet, Sophos, Emerio, Brocade, Cognizant, Outsystems, Symantec, VADS, and Veeam.

Vijay Sundararaman, Country Manager, IDC Malaysia

 "Every organisation in Malaysia now has some sort of cloud adoption plan," analyst firm  IDC's Malaysia's Country Manager, Vijay Sundararaman, (pic above ) told Computerworld Malaysia in a recent interview when talking about the reality of country's goal to achieve developed nation status by 2020. (For the full interview, click here.)

"The adoption of '3rd Platform' technologies - such as Cloud, Mobility, Social and Big Data/Analytics - has accelerated as enterprises commit to Digital Transformation (DX) on a massive scale. In 2017, IDC predicts that DX will attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global economy and expects we will see in 2017 the dawn of the 'DX Economy.'
"Currently, we see Malaysia as a 'Technology Optimiser', where adoption is proceeding at a brisk pace in many technology areas across industries, but there are local cultures, traditions that need to be embedded that slows the process down somewhat.

"Only a quarter of the enterprises in Malaysia were not considering mobility adoption, with the remaining 3/4th of enterprises already deploying either devices or enterprise mobility management solutions and mobile apps. This is a sea change compared to a couple of years ago, when most enterprises did not have a good awareness about the role of mobility solutions in driving productivity and efficiency."
"Beyond the individual adoption of technologies, the key question really is what is happening within the enterprises themselves, and what is the impact to the economy? Another area we are looking at this year is the impact of digital transformation in industry verticals such as retail, manufacturing and services within Malaysia."

"In Malaysia, 82 percent of the IT spend funding originated from the CIO's office, while only 18 percent was driven by LoBs. Compare this to Australia where the ratio stands at 56 percent CIO / 44 percent LoB and Japan where it is currently at 67 percent /33 percent.  So typically, we tend to see stronger partnerships between the CIO and LoBs in Japan, Australia, New Zealand, Singapore, and even China. Countries such as Malaysia, Indonesia, Korea, and Taiwan still seem to be following the traditional model where IT drives changes throughout the organization. We expect this to change over the next two years."
Speaking of challenges, one key external challenge that most industries (particularly consumer oriented) have been grasping with in the past year or so is the rise of digital platforms and the services they provide. They tend to be social in nature, usually free or ad supported, and decentralised. The consumer demographic is also very different today, and many companies that are more traditionally oriented do not fully realize the impact this can have to their organisations if they are not nimble enough.
In Malaysia, specifically, most enterprises are keenly aware on the need to build a strategy around adopting these digital/transformative technologies. However, there is a lot of noise in the market that buyers have to navigate to find the right solution for their organisations. So much so that, having a clear understanding on what to adopt, how to adopt and what are the real values that can be derived from these implementations still seem to be slowing down adoption rates.
"Malaysia has generally done well in its journey towards a digital economy. Key focus has been the access, adoption and usage of digital tech towards both consumers and businesses."
"For example, high speed internet connectivity is one of the fundamental requirements in accelerating the adoption and usage of digital services in the economy, which produces a positive impact in overall GDP growth. Recognising its importance, the Malaysian government has placed a high emphasis in this area in previous budgets, and continues to make this a priority in the 2017 edition by mandating fixed line internet services to be increased to a baseline of 20Mbps. This will improve access, but adoption will still lag because cost of bandwidth is still high (for both businesses and consumers) in Malaysia."

"In my view, two important focus areas (if we are to meet the 2020 goal) should be the acceleration of digital transformation within existing businesses in the key industries of Malaysia such as Manufacturing, Agriculture, and Services.  Also, we need to ramp up SME sector performance, which can drive a much larger part of GDP than it does currently."
"According to the government's own statistics, 73 percent of SMEs in Malaysia have little to no usage of ICT in their business operations, which implies awareness of the benefits of digital platforms to enhance their business may also be low. This needs to be rectified urgently."
"Most importantly, the spirit of entrepreneurship coupled with a deep understanding of cutting edge tech (e.g. Virtual Reality or Artificial Intelligence) is required for SMEs and new start-ups to really succeed in creating new digital businesses, and compete and thrive against their global counterparts. This will be crucial because the new marketplace is digital, and is borderless. Will it be possible by 2020? With the right policies and a sense of urgency, it is possible. Is it probable? I suppose we will have to find out in 3-4 years' time."


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