NEWS: Regional IT demand still solid

LIKE other players in key economic sectors, the local information and communications technology (ICT) fraternity must be feeling jittery over the possible negative effects of the subprime-related or credit crisis. The US economic woes certainly pose a direct impact on the growth of regional IT markets, including Malaysia’s.

According to research firm IDC, Asean’s IT market growth rhythm could slow to just two per cent this year, which is equivalent to a potential loss of market opportunity worth a whopping US$680 million (RM2.17 billion).

The higher the country’s trade dependency is on the United States, the greater the negative impact, the firm said.

Malaysia, ranked in order of export business to the US, is fourth after Japan, Vietnam and China.

IDC believes that buffering the impact of the US economic slowdown on Asean’s IT markets will be a challenge due to the reliance on Asean exports to the US, and more stringent credit policies as local banks become more risk-adverse.

It is during such times that many, including the ICT fraternity, would welcome any effort by governments to cushion the negative impact of the global economic slowdown. These could include further efforts to diversify the export markets while at the same time boost domestic technology spending.

Talking about technology spending, a recent Gartner survey could serve to ease some worries among the players. According to the survey, regional IT demand will remain very strong this year.

The report, which involved about 1,500 chief information officers (CIOs) worldwide, revealed that IT expenditure is expected to surge by about 8.3 per cent in Asia, far above the 3.3 per cent rise in the global average.

The survey also identified that this year the focus areas among Asian CIOs include IT infrastructure and application rollouts. The implication here is, despite the possibility of the US heading into recession, Asian companies are still prepared to invest in technology to prepare themselves for future growth.

The prospects surely look encouraging, but this does mean that technology players should become complacent. The market will become more competitive than ever, as customers demand more value for their hard-earned money. They expect only the best.