IDC unveils Top 10 ICT predictions to drive Malaysian digital economy

• Malaysia has good policies in place but is lacking in implementation and collaboration
• By 2022, 21% of Malaysian GDP will be digitalised with a chance of higher growth

INTERNATIONAL Data Corporation (IDC) unveiled its top predictions for the Malaysian IT industry for 2019 and beyond, predicting that by 2022, over 21% of Malaysia's gross domestic product (GDP) will be digitalised against the current level of 18%.

Growth is expected in every industry driven by digitally-enhanced offerings, operations, and relationships, driving US$82 billion in IT-related spending from 2019 through 2022.

This was revealed at IDC FutureScapes in Kuala Lumpur on Jan 30, aimed at providing enterprises with a framework for evaluating its IT initiatives in terms of value to business strategy within a typical three-year business planning cycle.

IDC believes that Malaysian financial institutions, telecommunications, media, and retail industry are the leading industries that have successfully started to digitally transform and align their overall strategy with Malaysia’s “Industry4WRD” digital strategy.

However, senior research manager of IDC Asean, Baseer Siddiqui (pic), said there is more to be done in the nation’s journey towards achieving greater economic progress.

“Malaysia needs to do more to unlock the full potential of its digital economy. Industries in Malaysia must transform themselves by adopting best practices and emerging technologies to sustain and compete.”

 In a panel discussion with Malaysia Digital Economy Corporation’s (MDEC’s) vice president of growth ecosystem development, Norhizam Kadir, Baseer highlighted that Malaysia has good policies in place but questioned its implementation and the collaboration between different agencies.

Norhizam responded: “I agree to a certain extent there is a need for streamlining between various government agencies. But there are other challenges with SMEs in Malaysia in terms of awareness – 98% of companies incorporated in Malaysia are SMEs but their contribution to the Malaysian economy only amounts to 35%.

“We need the SME mindset to change. The government provides a platform. There is a need for the industry, especially SMEs to capture these opportunities,” he added.

IDC Malaysia’s top 10 IT industry predictions to guide stakeholders are as follows.

1 - Digitalised Economy:

Over 21% of Malaysia’s GDP will be digitalised by 2022, with growth in every industry driven by digitally-enhanced offerings, operations and relationship – driving US$82 billion in IT related spending from 2019 through 2022.

Baseer explained that 21% is not an absolute number and there is a chance of higher growth if the economy does well.

“There has been a government and policy change recently. There is a RM5 billion budget earmarked to drive Industry 4.0 but the funds have not been disbursed as of yet. The money needs to be spent on technology to see growth.”

2 - Digital-native IT:

By 2023, 70% of all IT spending will be on 3rd platform technologies, as over 50% of all enterprises build “digital-native” IT environments to thrive in the digital economy.

“We are seeing a lot of multicloud adoption. Solutions provided by companies’ trusted IT suppliers may no longer fit in with what the company needs,” said Baseer.

3 - Expand to the Edge:

By 2022, over 25% of organisations' cloud deployments will include Edge computing, and 25% of endpoint devices and systems will execute artificial intelIigence (AI) algorithms. “Edge computing provides a lot of benefit in terms of reducing network usage and lessening load on main data centre.”

4 - AppDev revolution:

By 2022, 60% of all new apps will feature microservices architectures that improve the ability to design, debug, update and leverage on third-party code and 25% of all production apps will be cloud-native.

He explains: “You have the flexibility to modularly design an app and add to it on the go. In this digital age, the race to invent and market is important. This way, you don’t have to completely design the entire app before launching.”

5 - New developer class:

By 2024, a new class of professional developers producing code without custom scripting, will expand the developer population by 20% — accelerating digital transformation.

6 - Digital innovation explosion:

From 2018 to 2023, with new tools/ platforms, more developers, agile methods and lots of code reuse, 4.0 million new logical apps will be created in Malaysia. Globally, 500 million apps are expected to be built.

7- Growth through specialisation:

By 2022, 20% of public cloud computing will be based on non-z86 processers including quantum. Organisations will spend more on vertical SaaS apps than horizontal apps.

8 - AI is the new UI:

By 2024, AI-enabled user interfaces and process automation will replace one-third of today’s screen-based apps. By 2022, 20% of enterprises will use conversational speech tech for customer engagement.

9 - Expanding or scaling trust:

By 2023, 30% of servers will encrypt data at rest and in-motion. Over 20% of security alerts will be handled by AI-powered automation and three million people will have blockchain-based digital identities.

10 - Consolidation vs Multicloud:

By 2022, the top four cloud platforms will host 80% of Infrastructure as a Service (IaaS) or Platform as a Service (PaaS) deployments, but by 2024, 90% of Malaysia 100 (M100) organisations will mitigate lock-in through multicloud or hybrid technologies and tools.