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Dec 2016 - IDC Presentation - Doc # AP41941416

1H16 Country Report on IT Services — Singapore

Author: Vidhika Sehgal
On-line Presentation

This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Singapore from January to June 2016 (1H16). It covers the market size movements and growth trends in each of the macromarkets (i.e., project oriented, outsourcing, and support and training services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of the 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.

The data and insights within this presentation are a part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

Singapore's gross domestic product (GDP) grew by 1.8% year over year (YoY) in 1Q16 and 2.1% YoY in 2Q16. This was slightly better than the last cycle, largely due to a rebound in the services sector. However, GDP growth forecast for 2016 has been revised down to 1.0–2.0% from an earlier 1.0–3.0%, due to weak global demand. Overall sentiments remain weak, given global uncertainties.

Despite a slight improvement in GDP growth, cost pressures remained high and as a result, IT budgets remained tight. Enterprises will remain selective in their technology investments, with greater focus on ROI and outcomes, especially as lines of business (LOBs) have an increased control on IT budgets. In 1H16, IT services growth picked up largely because of an increase in public sector spend under the Smart Nation plan, and this is likely to continue for the rest of the year.

Singapore's technology readiness and adoption is largely attributed to the government that believes in keeping pace with futuristic technologies in tackling several workforce, productivity, and demographic issues of the island state. With this vision, Singapore entered the build phase of the Infocomm Media Masterplan 2025 in the latter half of 2015. As a result, demand from various public sector departments rose significantly, which was evident in the open and bulk tenders that were released in 1H16.

Cybersecurity is a key area of demand across industries, with banking, public sector, and manufacturing being the key sectors that are investing in these solutions. In the government and manufacturing sectors particularly, cyber threat is due to an expected growth in the adoption of Internet of Things (IoT) devices. Demand for consulting services is high as end users try and tackle the security threats at all levels of the value chain. Adoption of cloud and mobility solutions is now moving beyond the public and banking sectors, with local enterprises, especially in the retail sector, embracing cloud infrastructure and applications.