ICT Remains Prominent as Malaysia Continues to Intertwine Traditional Economies with Technology, says IDC

Kuala Lumpur, Malaysia, February 9, 2012 – Information and Communication Technology (ICT) has been earmarked as a key enabler for traditional economies in Malaysia since 1996. As the nation moves towards an intelligent economy, International Data Corporation (IDC) notes that key transformative steps are being taken by the government and 2012 will witness the emergence of disruptive IT technologies becoming mainstream and playing a critical role in the development of Malaysia.

Sudev Bangah, Senior Research Manager, IDC Asia/Pacific says, "ICT still presents itself as a compelling platform for many Malaysian enterprises wanting to pursue a potential cost-beneficial delivery model of products and services. The smokescreen on the exact role ICT will play in the future of the Malaysian economy will blow-over in 2012, and IDC expects pockets of opportunities to emerge for both local and foreign organizations and this will shape the future of ICT.”

Malaysia's economic growth is expected to remain cautiously optimistic, with IT spending forecasted to reach US$8.2 billion at the end of 2012, representing a year-on-year (YoY) growth of 10.1%. Bangah cautions, "2012 has been heralded as a year of opportunity as well as uncertainty, causing many businesses to remain vigilant about the ever evolving landscape. While domestic consumption is expected to grow and foreign investments are poised to continue, this could change in a blink if the right chest pieces are not reserved for future movements."

Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 key ICT predictions in 2012 for Malaysia. These trends are what IDC believes will have the biggest commercial impact on the Malaysian ICT market.

1. From Key Enabler to Key Innovator: The Rise of ICT Prominence in Traditional Sectors
Today, CIOs are given more autonomy in making IT decisions that enable their businesses. With that, IDC is witnessing more organizations positioning IT spending for long-term strategic growth and value. In 2012, IDC predicts that traditional sectors will strategically utilize IT as a way to reach out to a wider target market by intensifying competition and expanding geographically.

2. Cloud Computing: The End of a Buzzword
The continuous interest in Cloud Computing from both end-users and vendors will cause a shift towards further exploration and understanding of the platform's value proposition. Public cloud will remain a more popular choice for a market like Malaysia due to the high composition of SMBs within the market. Of late, understanding of the technology has drastically improved and targeted effort by the Malaysian government will see key concerns addressed in the coming year.

3. Smart Devices to Drive the Rise of Mobile Commerce
The advent of the mobility concept and the affordability of devices have changed the manner in which Malaysian consumers utilize ICT. The introduction of smart mobile devices coupled with the bundling of data plans by service providers with these devices have caused a surge in smartphone adoption across Malaysia. IDC predicts that mobile commerce applications will gain ground in 2012.

4. Ultrabooks to Breathe New Life into PC Market
When the iPad hit the Malaysian market in 2010, there was a pandemonium; the iPad created a buying frenzy among consumers and the tablet was sold out within a few hours. Today, the market is flooded with a variety of tablets from various brands, and analysts and consumers alike are predicting that the demise of the PC is on the horizon. With consumer demand for PCs stifled by the abundance of alternatives as well as lack of innovation, PC vendors are searching for ideas to revive their business. In 2012, IDC expects the Ultrabook to fill the void between the full-size laptop and the tablet and the product is expected to boost sales in the consumer market which has not seen many truly innovative products over the past year.

5. Customer Centricity to Drive Socialytics
With the reality of a potential financial crisis affecting the world economy in the next 12 to 18 months, organizations across Asia/Pacific are expected to adopt a cautious and discerning approach towards IT investments in 2012. As customer centricity is seen as the top business agenda, there will be a strong focus on technologies that will aid enterprises in heightening customer focus and customer engagement, and acquiring knowledge of customers who contribute most to their businesses.

6. Low-End Smartphones to Cause a Flood of Data Usage
Malaysians are obsessed with smart devices, and smartphones are no exception. The launch of new models is usually greeted with grand fanfare. As the demand for smartphones in the country approaches fever pitch, lower-end smartphones have begun to make its way into the market. These phones provide cheaper alternatives to the high-end smartphones that have been flooding the market over the past three years.

7. Development of Content Takes Center Stage
The continuous proliferation of smart devices in Malaysia has reignited the push for the development of mobile device applications. The government is working towards the creation of a poll of talent equipped with adequate knowledge in developing innovative and creative content for eventual global monetization. The government, via several government agencies, has embarked on a concerted effort to groom local applications developers by equipping these individuals with the skills and means to create "world-class" content, fit for both domestic and international consumption.

8. Cost Reduction Remains Top of Mind for SMBs and Enterprises
In spite of the relatively positive view on ICT spending for 2012, results of IDC's recent Asia/Pacific CIO Barometer survey reveals that majority of enterprises in ASEAN will still be cost conscious when pursuing their business strategies in 2012. While majority of CIOs cited increased ICT spending for 2012 in areas of on-demand services, mobility and social media tools, focus is still placed on how enterprises can reduce their overall cost structure within the organization. Although CFOs have lightened their scrutiny on IT spending in recent years, they are still more watchful as compared to pre-crisis when ubiquitous spending on IT infrastructure was seen.

9. Talent Quest: Adequately Addressing the Talent Issue
IDC predicts that 2012 is the year the IT Services industry in Malaysia will hit a tipping point and the government must adequately address the local talent supply and demand issue. IDC expects a high demand for jobs requiring highly skilled and certified professionals to drive the IT services market in the coming year. The rising demand for tech talent in Malaysia is further accentuated by the announcement of global multinationals building their regional facilities in the country.

10. Digital Malaysia: Solidifying an Innovative Economy
2011 represented a new chapter for the country as IT started to play a significant role within the nation's economy as well as the betterment of the society. 15 years ago, the MSC Malaysia concept was introduced as a manner to encourage and support the development and adoption of ICT within the country. In line with the ripple created by MSC Malaysia within the economy, significant measures have been taken by the government via the Economic Transformation Plan (ETP) to ensure ICT remains a significant tool for the future development of the country.

For more information about this report, please contact Juliana Lai at +603-2177-9255 or julianalai@idc.com.