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IoT services, digitisation expected to drive Malaysian companies in 2016, says Gartner

AvantiKumar | Nov. 17, 2015
The Budget 2016 allocation to MOSTI will also encourage Malaysian companies to become more effective as they move to the digital space, said Gartner's Jim Tully.

Jim Tully, Research Vice President, Gartner Inc 

Photo - Jim Tully, Research Vice President, Gartner Inc.

 

Analyst firm Gartner expects that emerging trends such as the Internet of Things (IoT) and digital transformation will help Malaysian companies become more effective and relevant in 2016 and beyond.

Gartner's research vice president Jim Tully said 6.4 billion connected "things" will be in Use in 2016 globally, up 30 percent from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day.

Tully said IoT is expected support total services spending of US$235 billion in 2016, up 22 percent from 2015. Services are dominated by the professional category (where businesses contract with external providers in order to design, install and operate IoT systems), however, connectivity services (through communications service providers) and consumer services will grow at a faster pace.

He said that in Malaysia, the allocation of RM1.5 billion (US$340 million) announced during the recent Budget 2016 to the Ministry of Science, Technology and Innovation (MOSTI) will encourage companies in Malaysia "to become more relevant and effective, as they move towards the digital space."

"IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organisations and vendors," said Tully.

"Aside from connected cars, consumer uses will continue to account for the greatest number of connected things, while enterprise will account for the largest spending," he said, adding that Gartner estimated that 4 billion connected things will be in use in the consumer sector in 2016, and will reach 13.5 billion in 2020 (see Table 1).

Table 1: Internet of Things Units Installed Base by Category (Millions of Units)=

Category

2014

2015

2016

2020

Consumer

2,277

3,023

4,024

13,509

Business: Cross-Industry

632

815

1,092

4,408

Business: Vertical-Specific

898

1,065

1,276

2,880

Grand Total

3,807

4,902

6,392

20,797

Source: Gartner (November 2015)

In terms of hardware spending, consumer applications will amount to US$546 billion in 2016, while the use of connected things in the enterprise will drive US$868 billion in 2016 (see Table 2).

Table 2: Internet of Things Endpoint Spending by Category (Billions of Dollars)

Category

2014

 

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