Malaysia IT spending to grow 4.6% in 2019 to RM65.2 billion, says Gartner

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KUALA LUMPUR (Nov 13): Spending on technology products and services in Malaysia is forecast to increase 4.6% to reach RM65.2 billion this year, according to Gartner, Inc.

In a statement today, the the reasearch and advisory firm said worldwide IT spending is projected to total US$3.8 trillion in 2019, up 3.2% from expected spending of US$3.7 trillion in 2018.

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

“What this signals, for example, is more enterprise use of cloud services — instead of buying their own servers, they are turning to the cloud.

“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.

Gartner said enterprise software spending is forecast to experience the highest growth with an 8.3% increase in 2019.

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

Cloud software will grow at more than 22% this year compared with 6% growth for all other forms of software.

It added while core applications such as ERP, CRM and supply chain continue to get the lion share of dollars, security and privacy are of particular interest right now.

Gartner said 88% of recently surveyed global CIOs have deployed or plan to deploy cybersecurity technology in the next 12 months.

It explained that in 2018, data center systems are expected to grow 6%, buoyed by a strong server market that saw spending growth of more than 10% over the last year, and in 2018 will come in at 5.7% growth.

However, it said by 2019 servers will shift back to a declining market and drop 1% to 3% every year for the next five years.

This, in turn, will impact overall data center systems spending as growth slows to 1.6% in 2019, it said.

The firm said IT services will be a key driver for IT spending in 2019 as the market is forecast to reach USD$1 trillion in 2019, an increase of 4.7% from 2018.

It said an expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organizations to optimise enterprise external spend for business services such as consulting.

In a recent Gartner study, 46% of organisations indicated that IT services and supplier consolidation was in their top three most-effective cost-optimization approaches.