Malaysia's Unified Communications and Collaboration Market Plummeted in 1H13 by 14.5% Over Same Period in 2012: IDC
06 Nov 2013
Kuala Lumpur, 6 November 2013 - Malaysia's unified communication and collaboration (UC&C) market has recorded US$35.6M in factory revenue terms for 1H13, a diminishment of 14.5% over same period in 2012.
The compression is even sharper if compared to 2H12, where revenue has dwindled nearly 25% half-over-half, notably in the enterprise telephony's market. Nevertheless, enterprise telephony continues to play an integral part in the UC&C market, dominating 46.5% of total revenues in 1H13, followed by enterprise collaboration apps (32.2%), contact center solutions (14%) and enterprise videoconferencing solutions (7.2%).
In the 2H12 press release issued by IDC earlier, UC&C market had inched up to US$47.5M, strongly accelerated by the growth of IT spending and investments in local businesses prior to the 13th General Election (GE).
Local businesses pushed their financing and resources to implement developments while the existing government is in place, to ensure they are familiar with the guidelines, as policies tend to change when a new government takes over.
This led to an investment slowdown in 1H13 by most local businesses. Besides the uncertainties, the change in the governing coalition has further plunged the confidence level of local businesses, government link companies (GLCs) and to certain extents, MNCs to invest in UC&C space. Most IT buyers have revealed that they preferred to take a "wait and see" attitude than to invest during the GE.
"Vendor revenue has fallen drastically where 1H13 has experienced the worst half since 2011 across all product categories. Most results of key vendors like Cisco, Avaya, IBM, Alcatel-Lucent, Polycom and Microsoft were staggered in 1Q13," says Tan Hwee Xian, Market Analyst at IDC's Asia/Pacific Communications Group.
"Albeit signs of retrograde observed during GE, such transitory factor has not bogged down the market, in fact, the post-election period between mid May and June (2Q13) has seen an immediate uptake of projects as business inched up 22% in 2Q13, compared to 1Q13. IDC is confident that UC&C market performances in 2H13 will be better than 1H13. However, it predicts that total revenue in 2013 would be less stellar than it was in 2012," Tan adds.
FIGURE 1: Malaysia Unified Communications & Collaboration (UC&C) Revenue, 1H13
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According to IDC's Asia/Pacific Collaborations and Video 2013-2017 Forecast, Malaysia's UC&C is estimated to hit US$113.2M in vendor revenues by 2017. This marks a 5% of Compound Annual Growth Rate (CAGR), contributed mainly by factors such as a fall in bandwidth pricing, upgrade of network infrastructure, trends towards IP and mobility, cost saving over SIP trunking, growing popularity of voice and data convergence as well as open IP platforms and migration.
IDC expects that absolute revenue continues to be significant, growth rate however will be deterred by some key threats like cloud and freemium app services that are causing the traditional on-premise market to slow and be replaced.
With widespread availability of as-a-service models in the marketplace, IDC is expecting more OpEx-friendly UCaaS offerings to appear in the market and users to switch to smaller systems and/or software-based solutions, rather than large hardware-based systems.
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IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
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Tan Hwee Xian