“Projects in digital business, blockchain, Internet of Things and progression from big data to algorithms, machine learning and artificial intelligence will continue to be main drivers of growth (in IT spending).”
JOHN-DAVID LOVELOCK, Gartner Inc research vice-president
SPENDING on technology products and services in Malaysia is forecast to reach RM65.2 billion this year, up 5.7 per cent from last year.
Worldwide information technology (IT) spending is also projected to rise 4.5 per cent to US$3.7 trillion (RM14.62 trillion) this year, compared with last year.
According to Gartner Inc, global IT spending began to turn around last year, with continued growth expected over the next few years.
“However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations and a possible global recession,” said its research vice-president JohnDavid Lovelock.
He said despite this uncertainty, businesses would continue to invest in IT as they anticipated revenue growth, but their spending patterns would shift.
“Projects in digital business, blockchain, Internet of Things and progression from big data to algorithms, machine learning and artificial intelligence (AI) will continue to be main drivers of growth,” he said.
Gartner said enterprise software continued to exhibit strong growth, with worldwide software spending was projected to grow 9.5 per cent this year, and would grow another 8.4 per cent next year to US$421 billion.
“Firms are expected to increase spending on enterprise application software this year, with more of the budget shifting to software as a service (SaaS).
“The growing availability of SaaS-based solutions is encouraging new adoption and spending across many subcategories, such as financial management systems, human capital management and analytic applications,” it said.
On the other hand, Gartner said the devices segment was expected to grow 5.6 per cent this year. Last year, the segment experienced growth of 5.7 per cent for the first time in two years.
“End-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward, even as unit sales are forecast to be lower.
“Personal computer growth is expected to be flat this year as continued Windows 10 migration is seen driving positive growth in business markets in China, Latin America and Eastern Europe.
“The impact of the iPhone 8 and iPhone X was minimal last year as expected. However, iOS shipments are expected to grow 9.1 per cent this year,” it said.
Lovelock said Gartner forecast US$2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity.
“For example, business value is attributable to using AI to drive efficiency gains, create insights that personalise the customer experience, entice engagement and commerce and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data.
“Capturing the potential business value will require spending, especially when seeking the nearterm cost savings.
“Spending for customer experience and revenue generation will likely benefit from AI being a force multiplier — the cost to implement will be exceeded by the positive network effects and resulting increase in revenue,” he added.