Cloud, Data Center Spending Might Drive Communications to As Much as 43% of Total Enterprise IT Spending

Frost and Sullivan predict Indonesia cloud and data center services will be the growth engine for enterprise IT spending, growing 605 percent from 2013.

By 2018, enterprise IT spending in Southeast Asia will total $62 billion, according to forecasts from Gartner.

Indonesia enterprise spending overall will be up 317 percent from 2013. Frost and Sullivan predicts..

If global patterns of spending apply, communications spending in Southeast Asia will be much as $27 billion in 2018, using a rule of thumb that communications represents about 43 percent of all information technology spending, these days.

That might seem a high percentage. Keep in mind the forecast includes spending on mobile services as well as voice services and data bandwidth.

The Southeast Asia region comprises 11 countries of which Singapore, Malaysia, Indonesia and Thailand spend the most on IT and account for roughly 80 percent of IT spend in the region.

Together, Indonesia, Malaysia, Singapore and Thailand will spend $52 billion on IT in 2015, with annual growth of six percent, Gartner says.

Indonesia enterprise IT spending will reach US$3.8 billion in 2019,” said Ajay Sunder, Frost & Sullivan VP, up from $1.6 billion in 2014. Using the same 43 percent ratio, communications spending in Indonesia would reach $1.6 billion.

Indonesia will have around 1.7 billion connected devices by 2020 with over 470 million mobile subscribers and over 200 million active Internet users, Sunder said.

Globally, the percentage of communications spending specifically related to core communications services was much as 44 percent of 2014 information technology spending, and about 43 percent of all 2015 global IT spending.

                    Worldwide IT Spending Forecast (Billions of U.S. Dollars)

	2014 Spending	2014 Growth (%)	2015 Spending	2015 Growth (%)
Devices	696	3.8	732	5.1
Data Center Systems	141	0.8	143	1.8
Enterprise Software	317	5.8	335	5.5
IT Services	956	2.7	981	2.5
Telecom Services	1,626	-0.1	1,638	0.7
Overall IT	3,737	1.0	3,828	2.4

source: Gartner

Gartner estimates that enterprise spending on IT products and services in Singapore will be US$19.1 billion (SGD $24 billion) in 2015. Compared with other mature markets in the region, such as Australia, this intensity of IT spending is high relative to Singapore's gross national output and population.

The dominant sectors in 2015 will be communications, media and services, banking and securities, government and manufacturing. Together they will account for 70 percent of total enterprise IT spending in the country in 2015. The fastest-growing industry segments through 2018 will be banking and securities, utilities and manufacturing, and natural resources.

Spending by enterprises in Malaysia is projected to be US$12.6 billion (MYR 40.6 billion) in 2015 at an annual growth rate of 6.4 percent across data centers, software, IT services, internal services, devices and telecom services.