technology

Gartner Says Malaysian IT spending forecast to reach MYR 71.7 billion in 2017

Malaysia IT spending is forecast to reach MYR 71.7 billion in 2017, an increase of 8 percent over 2016, according to Gartner, Inc. Comparatively, Worldwide IT spending is projected to total $3.5 trillion in 2017, a 1.4 percent increase from 2016, according to Gartner, Inc. This growth rate is down from the previous quarter’s forecast of 2.7 percent, due in part to the rising U.S. dollar.

“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.”

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.

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. “We are seeing a shift in who is buying servers and who they are buying them from,” said Mr. Lovelock. “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
Communications Services 1,380 -1.4 1,376 -0.3 1,394 1.3
Overall IT 3,414 0.4 3,460 1.4 3,559 2.9

Source: Gartner (April 2017)

Driven by strength in mobile phone sales and smaller improvements in sales of printers, PCs and tablets, worldwide spending on devices (PCs, tablets, ultramobiles and mobile phones) is projected to grow 1.7 percent in 2017, to reach $645 billion. This is up from negative 2.6 percent growth in 2016. Mobile phone growth in 2017 will be driven by increased average selling prices (ASPs) for phones in emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone. The tablet market continues to decline significantly, as replacement cycles remain extended and both sales and ownership of desktop PCs and laptops are negative throughout the forecast. Through 2017, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase.

The 2017 worldwide IT services market is forecast to grow 2.3 percent in 2017, down from 3.6 percent growth in 2016. The modest changes to the IT services forecast this quarter can be characterized as adjustments to particular geographies as a result of potential changes of direction anticipated regarding U.S. policy — both foreign and domestic. 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.

Table 2. Malaysia IT Spending Forecast (Millions of Malaysian Ringgit)

 

Segment 2016 YR 2017 YR 2018 YR
Devices 10,503 11,938 13,212
Data Center Systems 2,077 2,083 2,157
Software 4,492 4,930 5,415
IT Services 11,833 12,498 13,222
Communications Services 37,503 40,272 42,027
Grand Total 66,408 71,720 76,033

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior information technology (IT) leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to supply chain professionals, digital marketing professionals and technology investors, Gartner is the valuable partner to clients in more than 11,000 distinct enterprises. Gartner works with clients to research, analyze and interpret the business of IT within the context of their individual roles. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has almost 9,000 associates, including 1,900 research analysts and consultants, operating in more than 90 countries. For more information, visit www.gartner.com.

 

 




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