Malaysia’s IT product spending may reach RM65b by next year

KUALA LUMPUR: Spending on information technology (IT) products and services in Malaysia is forecast to reach RM65.2 billion this year, an increase of 4.6 per cent from this year, said Gartner Inc.

Worldwide IT spending, meanwhile, is projected to total US$3.8 trillion (RM15.9 trillion) next year, an increase of 3.2 per cent from expected spending of US$3.7 trillion this year.

“While currency volatility and the potential for trade wars are still playing a part in the outlook for IT spending, it’s the shift from ownership to service that is sending ripples through every segment of the forecast,” said Gartner research vice-president John-David Lovelock.

In a statement, he said this indicates that more enterprises will use cloud services instead of buying their own servers.

“As enterprises continue their digital transformation efforts, shifting to ‘pay for use’ will continue. This sets enterprises up to deal with the sustained and rapid change that underscores digital business,” he said.

Enterprise software spending is forecast to experience the highest growth with an 8.3 per cent increase in 2019.

Software as a service is driving growth in almost all software segments, particularly customer relationship management (CRM), due to increased focus on better customer experiences.

Cloud software, meanwhile, will grow at more than 22 per cent this year compared with just six per cent growth for all other forms of software.

In 2018, data centre systems are expected to grow six per cent, buoyed by a strong server market that saw spending growth of more than 10 per cent over the last year, and thias year will come in at 5.7 per cent growth.

However, by next year, servers will shift back to a declining market and drop one to three per cent every year for the next five years.

This, in turn, will impact overall data centre systems spending as growth slows to 1.6 per cent in 2019, Gartner said.

IT services will be a key driver for IT spending next year as the market is forecast to reach US$1 trillion this year, an increase of 4.7 per cent from thias year.