So here’s some news, according to Gartner, Inc., they are predicting that Malaysia IT spending will reach to 71.7 billion ringgit this year. Although that’s an increase 8% from 2016, the growth rate has actually went down from the previous quarter’s forecast of 2.7%, where the Worldwide IT is projected to spend $3.5 trillion for 2017, which was a 1.4% increase from 2016 due to the rising USD.
"The strong U.S. dollar has cut $67 billion out of our 2017 IT spending forecast," said John-David Lovelock, research vice president at Gartner. "We expect these currency headwinds to be a drag on earnings of U.S.-based multinational IT vendors through 2017."
"We are seeing a shift in who is buying servers and who they are buying them from," Mr. Lovelock. continued. "Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment."
Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)
| 2016 Spending | 2016 Growth (%) | 2017 Spending | 2017 Growth (%) | 2018 Spending | 2018 Growth (%) | |
|---|---|---|---|---|---|---|
| Data Center Systems | 171 | -0.1 | 171 | 0.3 | 173 | 1.2 |
| Enterprise Software | 332 | 5.9 | 351 | 5.5 | 376 | 7.1 |
| Devices | 634 | -2.6 | 645 | 1.7 | 656 | 1.7 |
| IT Services | 897 | 3.6 | 917 | 2.3 | 961 | 4.7 |
| Communication Services | 1380 | -1.4 | 1376 | -0.3 | 1394 | 1.3 |
| Overall IT | 3414 | 0.4 | 3460 | 1.4 | 3559 | 2.9 |
The data center system segment is expected to grow 0.3 percent in 2017. While this is up from negative growth in 2016, the segment is experiencing a slowdown in the server market (Source: Gartner in April, 2017)
Mobile phone sales have been the driving force as well as other smaller improvements in sales of printers, PCs and tablets. With the combination of these worldwide spending on devices, it’s projected to grow 1.7% this year reaching $645 billion. This is also thanks to the emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone.
Meanwhile, the tablet market has been declining quickly, same goes to the PCs and laptops according to the forecast. Through 2017, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase.
Table 2. Malaysia IT Spending Forecast (Millions of Malaysian Ringgit)
| 2016 | 2017 | 2018 | |
|---|---|---|---|
| Devices | 10503 | 11938 | 13212 |
| Data Center Systems | 2077 | 2083 | 2157 |
| Software | 4492 | 4930 | 5415 |
| IT Services | 11833 | 12498 | 13222 |
| Communications Services | 37503 | 40272 | 42027 |
| Grand total | 66408 | 71720 | 76033 |
In addition, the anticipated change in the U.S.A. policy may result a lot of potential directions for both foreign and domestic regions. The business-friendly policies of the new U.S. administration are expected to have a slightly positive impact on the U.S. implementation service market, as the U.S. government is expected to significantly increase its infrastructure spending during the next few years.
The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.
Stay tuned for more news at TechNave.com.
COMMENTS