Malaysia SMBs to invest US$4.6B on ICT

Small and midsize businesses (SMBs) in Malaysia are expected to spend up to US$4.6 billion on infocomm technologies (ICT) in 2008, according to an analyst report by AMI-Partners.

In its latest study released today, the research house said SMBs in Malaysia are projected to grow their ICT spending by some 11 percent over last year, with the telecom component of the expenditure expected to account for approximately US$1.3 billion.

Malaysian SMBs are likely to look at technologies that will enable them to be more efficient and mobile in 2008, AMI-Partners said. They are likely to invest in Internet connectivity, wireless technologies, higher bandwidth, larger capacity storage for data backup, remote hosting, as well as explore software as a service (SaaS) as an alternative to costly software licenses and maintenance fees.

The number one investment priority among the SMBs is to beef up their IT security infrastructure, the report said. "More than 90 percent of small businesses in Malaysia ranked enhancing IT security as a key priority for investment in 2008," said Daniel Sim, Singapore-based research and consulting manager, noting that the medium-sized businesses' lack of focus on security in the past had resulted in losses, both financially as well as in sensitive company data.

Sim added that data backup and adding more IT storage were ranked by small businesses--defined as having fewer than 100 employees--as their second and third IT-related investment priorities for this year. Medium-sized businesses--defined as having between 100 and 999 employees--identified improving Internet or networking bandwidth and providing data backup as their second and third strategic IT priorities for 2008.

AMI-Partners also found that Malaysian small businesses have a keen interest in exploring PC virtualization products and SaaS offerings in 2008. "PC virtualization and SaaS offer low-cost alternatives to users and enable small businesses to remain highly mobile," Sim said.

"PC virtualization penetration currently exceeds 20 percent for small businesses, while another 35 percent of small businesses are aware of this technology and are planning to invest in PC virtualization products this year," he added. "As for SaaS, more than 10 percent of small businesses are currently using this service, [and] about 20 percent plan to invest in SaaS."

In comparison, medium-sized businesses are more cautious when it comes to deploying new technology, AMI-Partners said. For instance, VoIP (voice over IP), SaaS and Social Network Services, or SNS, are emerging technologies that were adopted by medium-sized businesses last year, but their adoption is still nascent, with less than 10 percent penetration among Malaysian medium-sized businesses.

The report also noted that other technologies such as computing, networking, telecom equipment and software applications will continue to see major spending by SMBs in Malaysia this year.

Last year, the highest growth in ICT spending was in the area of security and storage, triggered by increasing awareness of security threats, the analyst company said.

Lynn Tan is a freelance IT writer based in Singapore.