News Column

IT spending set to grow 11pc

July 1, 2014



KUALA LUMPUR: Malaysia's information technology (IT) spending is forecast to grow by 11 per cent to RM67.9 billion in 2014, according to the United States-based information technology research and advisory company, Gartner Inc.

Gartner said worldwide IT spending is on pace to total USD3.7 trillion (RM11.88 trillion) in 2014, a 2.1 per cent increase from 2013 spending.

The slower outlook for 2014 is attributed to a reduction in growth expectations for devices, data centre systems, and to some extent IT services, it said.

Gartner managing vice-president Richard Gordon said price pressure from increased competition, lack of product differentiation and increased availability of viable alternative solutions have had a dampening effect on the short-term IT spending outlook.

"However, 2015 through 2018 will see a return to 'normal' spending growth levels as pricing and purchasing styles reach a new equilibrium," Gordon said in a statement yesterday.

"IT is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalisation," he added.

Gartner estimates a worldwide spending of USD685 billion for devices in 2014, a 1.2 per cent increase from 2013.

"This is due to lower price points expected across mobile phones and tablets," it said.

It noted that as tablet penetration reaches 50 per cent in US households, sales of high-end tablets will decrease, with the next wave of adopters more attracted to lower priced utility tablets.

The result is the mix of tablets shifting from basic tablets to utility tablets, resulting in lower price points.

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecommunications markets.

On the other hand, IT spending in the Asia-Pacific region is forecast to reach USD746 billion this year, up three per cent from last year, revised downward from 4.4 per cent in the previous forecast, Gartner said.


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Source: Business Times (Malaysia)


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