Malaysia ICT Top 10: Flooded with Technology but anchored by the 3rd Platform, says IDC
19 Dec 2013
Kuala Lumpur, December 19, 2013 – IDC sees Malaysia having strong growth prospects for technology in 2014. The Malaysian IT market is anticipated to cross the US$10 Billion mark creating a wealth of opportunities in the local market space.
Although the growth prospects are there, IDC cautions that the flooding of technology only serves one part of the fundamental necessity for the 3rd platform of technology to proliferate. In order for Malaysia to move toward being a fully advanced tech market, the floods must be guided in the right direction.
"The mindset of jumping on the bandwagon is expected to change in 2014 with organizations looking at clear business use cases with ROI to ensure a transition from adopting a product to a holistic solution powered by ICT to support key business objectives,” according to Roger Ling, ASEAN Research Manager of Software & Services, IDC.
“We are 3rd Platform ready, but the building blocks are not necessarily grounded firmly or arranged strategically. This will be the case for 2014 as organizations look to research, explore, and deploy intelligently" adds Ling.
Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 ICT predictions in 2014 for Malaysia.
1. IT Spending Back on Track Surpassing the US$10 Billion Mark
IDC predicts that in 2014, Malaysia's IT spending will be back on track, finally crossing the US$10 billion mark. The coming year will serve as a platform for a possible inflection point for growth but it will not be without both challenges and opportunities. IDC sees overall IT spending for Malaysia as generally fragmented, so while IT spending is moving in the right growth direction, IDC also cautions that in 2014 and beyond without transformation to the 3rd platform the nation may just be flooded with technology that is not being deployed in an efficient way.
2. Data Revenue Takes Poll Position in 2014
IDC predicts that the telecom services market will hit a steady 8% YoY growth at the close of 2014, up by 1% from the previous 7% growth experienced in 2013. Key to this growth is a landmark theme where Data revenue gains dominance by surpassing Voice revenue for the first time. IDC sees the growth in Data revenue as a fundamental necessary for the 3rd platform as it provides the ubiquity in connection necessary for proliferation. The shift also signifies the need for Telco service providers to innovate to succeed with dwindling voice revenue streams ahead.
3. Adoption of cloud solutions moves from conceptual to practical. Increased hand holding and cloud provider innovations will align better with customer business cases in 2014
After a lethargic uptake during the course of 2013, IDC still perceives the nation as being at a relatively nascent stage of cloud adoption. In IDC's Cloud Maturity Model, the findings best represent the nation at the start of stage 2: Opportunistic, characterized by companies experimenting with more standardized offerings and developing short-term improvements regarding access to IT resources via cloud.
According to Dan Fadalini, Senior Market Analyst for IT Services, IDC Malaysia, "We now see companies taking an educated approach to cloud and more cloud providers are responding to their curiosity. It will be imperative for vendors to step up efforts to create clearer business use cases to ensure successful deployment.
4. Enterprise IT to remain unconvinced about achieving 'Returns on Mobility'.
According to IDC's Enterprise Mobility Maturity Model, as of 2013, Malaysia remains in the 2nd of the 5 stages of Mobile Maturity, otherwise known as the 'Opportunistic' stage. This means that organizations are currently employing a more tactical approach to mobility rather than strategic. Based on results from IDC’s Future Workspace Survey 2013, 57% of organizations are currently deploying devices to their employees, but only 10% are currently using a mobility solution.
According to Daniel Pang, IDC's ASEAN Research Manager of Client Devices, "There is no doubt that Mobility is a key tenet of the 3rd platform and is making its mark in the country, but the real question is whether organizations will adopt enterprise mobility solutions moving forward. It is evident that at this point in time, Malaysia is flooded with technology but not solutions, and firmly entrenched in the ‘Opportunistic’ stage until organizations can be convinced that ROI is achievable."
5. Malaysia’s Big Data market anticipated to hit US$24.2 million but remains tactical in nature
IDC expects the Big Data market in Malaysia to close at U$18.0 million at 2013 with an estimated YoY growth of 33.9%. Moving into 2014, the market is expected to grow at 34.4% reaching U$24.2 with a 5 year CAGR (2012 to 2017) estimated at 32.1%. IDC sees evidence of the nation currently at an opportunistic stage of maturity with the main focus on tactical use of Big Data. IDC predicts that unless a wave of transformation occurs this will be the case for the coming year. To move into the next stage of maturity (repeatable stage), organizations need to adopt a strategic approach to Big Data adoption as opposed to being siloed as is currently commonly seen.
According to Liew Siew Choon, Market Analyst of Software Research at IDC Malaysia, “The Big Data market will grow bigger and enter into the next stage only when the issue of skillsets and resources are resolved. This in turn will lead to a complete ecosystem whereby channel partners with the right skills will have the capability to deliver end-to-end Big Data solutions, including consultancy and other services.”
6. Enterprise social networking: Sandbox for peak internal collaboration in 2014 will be a priority
Based on IDC’s 2013 Social Enterprise survey, company’s satisfaction with the usage of social for internal collaboration is very low. The survey also highlights that over 68% of the respondents will look for new ways to improve and transform their internal collaboration strategy on a social platform. In 2014, IDC predicts that creating a sandbox to test, deploy and successfully operate a social based internal collaboration solution will be essential for the overall growth of the social technology pillar in the coming years.
7. Channel transformation in the 3rd platform will be a key agenda in 2014
The transition to the 3rd platform is not a direct changeover but a parallel changeover that will transform the IT channel ecosystem. IDC is of the opinion that this will be a key factor in 2014 as the influencing power of channels is a double edged sword that can expedite or slow down the movement into the 3rd platform. What we will see in 2014 is a move toward the synergy that needs to be achieved by IT vendors and the channel ecosystem to be successful in new age. Not all will succeed in this evolution.
8. BYOD is real and happening now, and organizations will need to make a stand on what it means
Driven by the use of devices and applications that are more personal, IDC sees BYOD not just as a phenomenon but a current reality. The reality faced by organizations now is not only are employees bringing their own devices, they are also leveraging consumer applications in the workspace. IDC predicts that tough decisions will be made in 2014 as to what BYOD will mean to each and every organization as the repercussions will need to be managed and strategically planned for.
9. Government to Connect to Citizens via Mobile Devices and Social Media, Accelerating a New Type of Citizen/Government Relationship
The 4 pillars of the 3rd platform create unique ecosystems and solutions as well as an overall collaborative ecosystem that creates opportunities for “mash-ups” or combinations of solutions which enable the transformation from traditional to intelligent economies. In 2014, IDC predicts that the mash-up of both Mobility and Social will create a platform for Government transformation connecting Citizens via Mobile Devices and Social Media, accelerating a new type of Citizen/Government Relationship. In 2014, IDC expects to see more services provided on mobile devices in Malaysia because the citizen world is rapidly becoming mobile and devices are going to be the default gateway to accessing the Internet.
10. Innovation in the 3rd platform will create unique mash-up opportunities but may also create a Perfect Storm for Project Failure
While the potential for the four pillar technologies to enable new business value continues to receive attention, IDC predicts that by 2015, the increasingly frequent application of these technologies to meet business demands will increase the risks of project failure to unacceptable levels, forcing CIOs to adopt new risk mitigation strategies. The ready availability of new business solutions based on mobile technologies designed for social consumption, large-scale analytics, and delivery by cloud infrastructure is creating complex applications that are often dependent on relatively untried technology and immature vendors. With that in mind, IDC is of the opinion that the full potential of the 3rd platform through mash-ups (combinations of the 4 pillars: Cloud, Mobility, Big Data, and Social) will be the goal to chase but will need to be done in a planned, cautiously optimistic manner.
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