May 2018 - Market Presentation - Doc # AP43787718
2H17 Country Report on IT Services - Malaysia
By: Alon Anthony Rejano
This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Malaysia from July to Dec 2017 (2H17). The study 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 in 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 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 part of the Asia/Pacific Semiannual Services Tracker research, which covers 14 foundation markets across 14 Asia/Pacific countries.
According to IDC's C-Suite survey, two out of three Malaysian organizations are either planning their DX strategies or are actively implementing DX-related projects. Digital transformation (DX) in Malaysia had accelerated noticeably in 2017, both in terms of awareness and in projects being rolled out. The adoption of emerging technologies to provide new revenue streams and business models and improve customer engagement is a key theme across many industries in the country. Banking, financial services, and insurance (BFSI); telcos; and high-tech manufacturing lead in this respect.
Although most IT services vendors experienced weaker revenue growth in 2H17, Malaysia will continue to rely on its digital economy to boost economic growth. The country has consistently increased its ranking and scored favorably in leading global indices, such as the World Bank’s Ease of Doing Business Index and the Global IT Readiness Index. These key trends point to an increased need for digitalization that will result in high growth and adoption of emerging technologies in the country. As a result of market and economic changes, IDC believes that key IT decision makers have started looking at their refresh cycles for IT infrastructure and applications, with a view toward keeping their organizations relevant in the new digital economy. This leads to more opportunities for IT services providers, especially in the IT consulting space and systems integration space.
In 2H17, Malaysian organizations have become more price sensitive, especially when it comes to large US-based service providers because of the relatively weak ringgit against the U.S. dollar. Furthermore, tech buyers are either looking at cutting down their IT services and software spending especially with US-based service providers or considering cheaper alternatives that they think may bring more value to their business.
Enterprises in Malaysia are increasingly considering managed services as a strategic initiative as IT organizations are trying to lower their IT expenditure. IDC believes that the hosting, outsourcing, and even cloud computing models have become key choices to reduce ongoing maintenance costs. Given this market context, cloud adoption has become the driving force of high demand for hosting infrastructure services.
IBM, Oracle Corporation, VADS Professional Services Sdn Bhd, Tata Consultancy Services Limited, Cisco Systems, Inc., HEITECH PADU BERHAD, Accenture plc, Hewlett Packard Enterprise, Hitachi, Ltd., Dimension Data Holdings PLC, DXC Technology Co.
Application development services, Application management, Hosted application management, Hosting infrastructure services, IT consulting services, IT education and training, IT maintenance and support, Network and desktop outsourcing services, Systems integration services