Photo (file) - Tan Hwee Xian, Market Analyst, Communications, IDC Asia/Pacific
Malaysia's unified communication & collaboration (UC&C) sector in the first half of 2013 has reduced by 14.5 percent compared with the same period in 2012, according to analyst firm IDC.
IDC Asia/Pacific market analyst, communications group, Tan Hwee Xian said the local UC&C market, which recorded US$35.6M in factory revenue terms for 1H13, shows an even sharper compression when compared with the second half of 2012 where the revenue dwindled nearly 25 percent half-over-half, notably in the enterprise telephony's market.
Nevertheless, enterprise telephony continues to play an integral part in the UC&C market, dominating 46.5 percent of total revenues in 1H13, followed by enterprise collaboration apps (32.2 percent), contact centre solutions (14 percent) and enterprise videoconferencing solutions (7.2 percent).
"Vendor revenue has fallen drastically where 1H13 has experienced the worst half since 2011 across all product categories," said Tan. "Most results of key vendors like Cisco, Avaya, IBM, Alcatel-Lucent, Polycom and Microsoft were staggered in 1Q13."
He said that the second half of 2012 UC&C results showed that the market had inched up to US$47.5M, "strongly accelerated by the growth of IT spending and investments in local businesses prior to the 13th General Election (GE)."
Tan said most IT buyers have revealed that they preferred to take a "wait and see" attitude than to invest during the lead up to the GE, which led to an investment slowdown in the first half of 2013.
Besides the uncertainties, the change in the governing coalition further plunged the confidence level of local businesses, government link companies (GLCs) and to certain extent, MNCs to invest in UC&C space, he said.
Second half of 2013 will be better
"Albeit signs of retrograde observed during GE, such transitory factors have not bogged down the market, in fact, the post-election period between mid May and June (2Q13) has seen an immediate uptake of projects as business inched up 22 percent in 2Q13, compared to 1Q13," he said." IDC is confident that UC&C market performances in 2H13 will be better than 1H13. However, it predicts that total revenue in 2013 would be less stellar than it was in 2012."
According to IDC's Asia/Pacific Collaborations and Video 2013-2017 Forecast, Malaysia's UC&C is estimated to hit US$113.2 million in vendor revenues by 2017. This marks a 5 percent of Compound Annual Growth Rate (CAGR), contributed mainly by factors such as a fall in bandwidth pricing, upgrade of network infrastructure, trends towards IP and mobility, cost saving over SIP trunking, growing popularity of voice and data convergence as well as open IP platforms and migration.
Tan said IDC expected that absolute revenue would continue to be significant, though the growth rate could be deterred by some key threats like cloud and freemium app services that are causing the traditional on-premise market to slow and be replaced. "With widespread availability of as-a-service models in the marketplace, IDC is expecting more OpEx-friendly UCaaS offerings to appear in the market and users to switch to smaller systems and/or software-based solutions, rather than large hardware-based systems."
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