Kuala Lumpur, March 6 – IDC Malaysia has recently unveiled its annual predictions for 2017 and beyond, highlighting the impact of emerging technologies and market changes that will drive the future of the Malaysian ICT industry in the next one to three years.
“Drawing on IDC's industry-defining research and insights, the predictions explore the user trends and vendor strategies that will redefine the ICT market, redistribute market share in Malaysia, and help leaders capitalize on emerging market opportunities and plan for future growth," says Pranabesh Nath, Research Director, IDC Malaysia.
Malaysian organisations face the need to transform while steering past heightening economic pressures in 2016.
"Enterprises across diverse industries such as retail, manufacturing, construction, finance, and oil and gas are at various stages of exploration and adoption of new technologies. Some enterprises are focused on internal transformation, where technologies such as enterprise mobility, data warehousing, and security technologies remain highly relevant. Others, however, want to focus more on building new external applications and services, using tools such as augmented reality/virtual reality,” he added.
IDC expects digital transformation (DX) to attain macroeconomic scale over the next three to four years. This is changing the way organisations operate and is reshaping the Malaysian economy, leading to the dawn of the ’DX Economy’.
The following is a closer look at IDC's top strategic predictions expected to unfold in Malaysia in 2017:
Big Data in the Cloud: By 2018, new cloud pricing models will emerge for specific analytics workloads, where the growth for cloud analytics solutions will be three times more than on-premises analytics solutions.
"According to IDC Asia/Pacific's Software Study 2016, a total of 42% respondents from Malaysian organisations are planning to deploy cloud-based analytics software in the next 1-2 years while some have already deployed analytics solutions. IDC foresees that Malaysian organisations will continue to shift more critical applications into the cloud platform, the demand for cloud analytics will grow exponentially," says Quan Xiong Ng, Associate Market Analyst, IDC Malaysia.
Enterprise Mobility & Device Deployment Models: By 2019, 30% of unregulated enterprise organisations will offer a choose-your-own-device (CYOD) program for eligible employees as their default device policy.
According to IDC Asia/Pacific's Enterprise Mobility Survey, bring your own device (BYOD) has become the primary choice in organisations, with 31% preferring this approach - a stark contrast from 2015 at 19%.
"Interestingly, 19% pointed to a CYOD model already in place, compared with just 14% when the same survey was conducted in 2015, indicating a growing interest among organisations to strike a balance between employee choice and IT manageability," says Jensen Ooi, Market Analyst, Client Devices, IDC Asia/Pacific.
Internet of Things: By 2018, connected vehicles, insurance telematics, personal wellness, and smart buildings will be four Internet of Things (IoT) use cases in the spotlight across Malaysia, accounting for US$700 million in spending.
IoT investment trends, attitudes, and use cases vary across regions, strongly driven by different business structures and scenarios, regulations, and innovation levels. Nevertheless, the four use cases that will be among the fastest growing worldwide in 2017/2018 are connected vehicles, insurance telematics, personal wellness, and smart buildings. These use cases show rosy expectations in Malaysian markets, accounting for US$700 million in forecast spending in 2018.
"This use case will take center stage in 2018 as heralded by the high concentration of players from different sectors (e.g., automotive manufacturing companies, IT players, utilities) progressively characterizing the market," says Nikhil Batra, Research Manager, Telecommunications, IDC Asia/Pacific. "In comparison, insurance telematics, which gives insurance companies the possibility to monitor drivers' behavior and adjust premium calculation accordingly, will continue its growth, slowly becoming the new normal for players in the sector," he adds.
Cognitive Cybersecurity: By 2018, 30% of cybersecurity environments will incorporate cognitive/AI technologies to assist humans in dealing with the increasing scale and complexity of cyberthreats.
"Based on IDC's Asia/Pacific (Excluding Japan) Business and IT Services 2017 Survey, 24% of organisations in Malaysia plan to adopt or transform their cybersecurity solutions in response to the changes brought about by digital technology such as cloud, mobility, and IoT. Given, organisations continue to engage with vendors for predominantly traditional services such as network security, content security, and security incident & event management services," says Linda Chua, Market Analyst, Software, IDC Malaysia.
Datacenter Vision: By 2018, 25% of companies in data-intensive industries will adopt formal datacenter planning, sourcing, and governance processes to speed DX efforts.
DX has virtually impacted every industry. A key sign of the maturity of this transformation is the degree by which the industry has become information-focused. For enterprises in information-intensive industries, datacenter decisions must be based on the ability to quickly deliver and scale highly secure and resilient pools of transaction, content, and analytic resources worldwide.
“Malaysia lags majority of the Asia/Pacific market in terms of DX maturity. Worldwide pressures such as the consumerization of IT and digital disruption are forcing Malaysian firms to shift their vision and strategy," says, Jun Fwu Chin, Research Director, Datacenter Group, IDC Asia/Pacific.
Service Provider Strategy: By 2020, 60% of enterprises will reconsider their current service providers, causing a shift in the systems integrator's function from traditional to digital and the emergence of new services roles.
"Rapid consumerisation of technology is creating an environment wherein enterprises are increasingly looking for new services around digital strategy and advisory as a starting point for digital engagements, as opposed to merely seeking for traditional implementation or SI capabilities," says Sherrel Roche, Senior Market Analyst, Services Research, IDC Asia/Pacific.
"For example, typical SI activity aligned to infrastructure services will transform with the effect of DX services into less 'build' and more 'leverage' of standards-based platforms common in the industry," she adds.
FinTech: Incubation will visibly be a ‘cost-first’ directive for Malaysian FSIs
Pressures on profitability brought by declining investor confidence, political risk, and the weakening Malaysian Ringgit have substantially impaired the businesses of Malaysian banks. Through 2017, the pursuit of innovation will be couched by mandates on cost optimisation.
"Malaysian financial service institutions (FSIs) remain relatively insular in terms of collaboration with third-party fintechs. Although co-administered accelerator programs abound (predominantly pursued by Maybank, CIMB and RHB), the lack of large and certain predicted returns remain a barrier for decision makers to scale up their involvement," says Sui-Jon Ho, Senior Market Analyst, IDC Financial Insights.
The technology areas discussed above are expected to be key to digital transformation initiatives of enterprises in 2017 and beyond. “A key requirement to success is in understanding the nuances of implementing some of these solutions to best fit the needs and aspirations of enterprises in Malaysia,” says Nath.
