KUALA LUMPUR (Jan 17): Research and advisory firm Gartner Inc has projected the spending on technology products and services in Malaysia to increase by 5.7% to RM65.2 billion this year, compared with RM61.6 billion in previous year.

Comparatively, worldwide information technology (IT) spending is forecasted to total U$3.7 trillion this year, an increase of 4.5% over 2017 spending of US$3.5 trillion, according to its latest forecast.

“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years.

“However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations and a possible global recession,” Gartner research vice president John-David Lovelock said in a statement.

Lovelock said businesses will continue to invest in IT despite this uncertainty, as they anticipate revenue growth, but their spending patterns will shift.

“Projects in digital business, blockchain, Internet of Things (IoT), and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth,” he added.

The research firm said the enterprise software continues to exhibit strong growth, with worldwide software spending projected to grow 9.5% this year and continue to grow another 8.4% in 2019 to total US$421 billion.

Organisations are expected to increase spending on enterprise application software in 2018, with more of the budget shifting to software as a service (SaaS).

The growing availability of SaaS-based solutions is encouraging new adoption and spending across many sub-categories such as financial management systems (FMS), human capital management (HCM) and analytic applications, Gartner said.

Furthermore, the devices segment is expected to grow 5.6% this year to US$704 billion, from US$667 billion last year.

Gartner opined the end-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward, even as unit sales are forecast to be lower, while PC growth is expected to be flat this year.

The impact of the iPhone 8 and iPhone X was minimal in 2017 as expected, Gartner added. However, iOS shipments are expected to grow 9.1% this year.

“Looking at some of the key areas driving spending over the next few years, Gartner forecasts US$2.9 trillion in new business value opportunities attributable to AI (artificial intelligence) by 2021, as well as the ability to recover 6.2 billion hours of worker productivity," Lovelock said.

Gartner's IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services.

It uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.