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Why has Gartner just revised Malaysia's 2017 IT spending forecast?

AvantiKumar | April 17, 2017
Gartner's John-David Lovelock explains why Malaysia's IT spending 'rebound' is still on for this year.

KL Golden Triangle view

Credit: GraphicStock

 

 In January 2017, analyst firm Gartner's Malaysia IT spending forecast for the year was that it would reach RM70.2 (US$15.73) billion in 2017, an increase of 7.3 percent over 2016.

As reported in Computerworld Malaysia at the time, John-David Lovelock (pic below), Gartner research vice president, attributed Malaysia's forecast - which was stronger than the 2017 Worldwide IT spending forecast increase of 2.7 percent (US$3.5 trillion) - to several major emerging technology trends that will push IT spending higher for Malaysia this year.

John-David Lovelock, Research Vice President, Gartner

The new Malaysia IT spending forecast is now projected to reach MYR 71.7 billion in 2017, which is an increase of 8 percent over 2016, said Lovelock.

Meanwhile, the Worldwide IT spending is projected to total US$3.5 trillion in 2017, which he said was a 1.4 percent increase from 2016.

This global growth rate is down from the previous quarter's forecast of 2.7 percent, due in part to the rising U.S. dollar, explained Lovelock.

"The strong U.S. dollar has cut $67 billion out of our 2017 IT spending forecast," he said. "We expect these currency headwinds to be a drag on earnings of U.S.-based multinational IT vendors through 2017."

What's really in store for Malaysia's IT industry

 Gartner's generally positive outlook for Malaysia remains in line with expectations from Malaysia Digital Economy Corporation (MDEC) and national ICT industry association PIKOM. (An in-depth roundup of insights from government, industry and analyst leaders can be found here.)

In January, Lovelock said: "2017 was actually poised to be a rebound year in IT spending globally. Some major trends have converged, including cloud, blockchain, digital business and artificial intelligence."

However, " some of the political uncertainty in global markets has fostered a wait-and-see approach causing many enterprises to forestall IT investments," he commented.(Please visit - What makes Gartner think 2017 is a 'rebound year' for Malaysia's IT spending? )

Among the revised forecasts, Lovelock pointed out that the data centre 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."

 

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