Includes 3 FREE quarterly updates
BMI View: Malaysian IT spending is expected to reach US$5.6bn in 2013, up 7%, although economic
activity is expected to slow over the coming quarters. Demand for IT products and services is forecast to
stay resilient overall, even as economic growth moderates. There should be several areas of opportunity,
particularly in key spending verticals such as telecoms, and a new government Digital Malaysia Plan was
unveiled in 2012. Spending on IT products and services should be boosted by growing enterprise and
government interest in cloud computing, and ICT-friendly budget measures, but much will depend on
confidence in a sustainable economic recovery. Malaysia's IT market is distinguished by a marked digital
divide and, in the Klang Valley area around Kuala Lumpur, a mature urban population surpasses even
some developed nations in terms of IT adoption on some indicators.
Headline Expenditure Projections
Computer hardware sales: US$2.7bn in 2012 to US$2.9bn in 2013, +6% in US dollar terms. Forecast in
US dollar terms upwardly revised due to to macroeconomic factors, and PC sales will be supported by the
government's push for greater broadband penetration.
Software sales: US$876mn in 2012 to US$952mn in 2013, +9% in US dollar terms. Forecast in US
dollar terms upwardly revised due to analyst modification, and e-business applications such as enterprise
resource planning (ERP) and customer relationship management (CRM) are becoming increasingly
popular in the business market.
IT services sales: US$1.6bn in 2012 to US$1.8bn in 2013, +9% in US dollar terms. Forecast in US dollar
terms upwardly revised with government accounting for about 15% of Malaysian IT spending.
: Malaysia's score is 51.2 out of 100.0. Malaysia ranks fifth in our latest Asia RRR
table, behind developed markets such as Singapore and Australia, but ahead of ASEAN
regional peers such as Thailand, Philippines and Vietnam. Its overall rating was boosted by
relatively high 'country structure' and 'market risk' scores.
Key Trends & Developments
?? The MSC Malaysia has named cloud computing as a strategic priority and has said that it will try
to develop a national cloud computing platform. Cloud projects are not confined to the national
level, as state governments are also exploring this area. Malaysia's Melaka State Government has
started to build new infrastructure, including a common datacentre and a disaster recovery
centre. The Melaka State Government has virtualised the datacentre infrastructure to make sure
it is 'cloud-enabled'. Cloud computing is also seen in Malaysia as having considerable utility for
?? Around 90% of Bursa Malaysia companies fall into the small and medium-sized enterprise
(SME) category and these are increasingly being seen as a key IT vertical demand sector in the
country. Many are facing a tough time due to rising costs and high oil prices. At the same time,
SMEs need to become more competitive and have greater access to information and technology.
Cloud computing software delivery models, with monthly costs as low as MYR300, are seen as
having great potential to help more SMEs to access technology.
?? In 2012 the government announced its latest Digital Malaysia Masterplan to drive the next stage
of development of Malaysia's ICT sector. The plan will propose a number of measures to
strengthen Malaysia's ICT ecosystem, including talent development, as well as stimulating
demand by consumers and businesses for ICT products and services. Encouraging the creation of
more local applications for cloud computing is expected to be one focus of the Digital Malaysia
plan. The government's plan to develop a national cloud computing programme should also drive
opportunities in this key emerging area for vendors.