Malaysia Information Technology Report Q2 2016
BMI View: Malaysia's IT market has medium-term potential as incomes rise and the economy continues todevelop, creating growth opportunities in the retail and enterprise markets. We identify income gains forMalaysia's middle class 2017-2020 as the stand-out opportunity, directly through potential for easing pricesensitivity in the PC market, and indirectly through the impact on enterprise sentiment. In contrast to themedium-term outlook, we have a mixed growth forecast for 2016 as regional economic uncertainty andfurther ringgit depreciation against the US dollar will squeeze growth, but still a significant improvementfrom 2015 when the hardware segment was hit hard by a combination of depreciation and the introductionof the Goods and Services Tax in April. We forecast total IT spending will increase at a CAGR of 6.8%2016-2020 to MYR26.3bn in 2020.
Latest Updates & Industry Developments
Computer Hardware Sales: MYR9.0bn in 2016 to MYR10.6bn in 2020, a compound annual growthrate (CAGR) of 4.2%. A more supportive economic environment and a shift in product cycle dynamicswill see the hardware segment regain momentum and growth both in value and volume terms.
Software Sales: MYR4.4bn in 2016 to MYR5.9bn in 2020, a CAGR of 7.7%. Enterprise modernisationwill broadly support software spending, while cloud computing software delivery has the potential todeepen the application market to Malaysian small- and medium-sized enterprises.
IT Services Sales: MYR6.8bn in 2016 to MYR9.8bn in 2020, a CAGR of 9.5%. IT services spendingforecast to outperform through wider adoption of outsourcing, cloud computing and Internet of Thingsapplications by enterprises.
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