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Malaysian IT services market grows 4.1%, valued at US$ 2.64 billion

According to International Data Corporation’s (IDC) Worldwide Semiannual Services Tracker, the Malaysian IT Services market was valued at US$ 2.64 billion in 2023 and recorded a 4.1% year-over-year (YoY) growth as compared to 5.5% in 2022.

“The slowdown in economic growth has reduced appetite for large-scale IT investment in the enterprise segment, while conservative spending from the public sector also dampened IT spending in 2023″, said Benjamin Ten, Market Analyst, IT Services, IDC Asia/Pacific.

IDC classifies the IT Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For 2023, project-oriented services registered the highest growth rate at 4.5%, followed by managed services at 4.4% and support services at 2.9%, respectively.

Meanwhile, the Malaysian IT Services market is projected to grow at a CAGR of 5.9% between 2023-2028 and reach US$ 3.51 billion by the end of 2028.

“The robust level of datacenter investment in Malaysia will be a catalyst for the IT services market, particularly project-oriented and managed services in the long term,” ends Ten.

In addition, the project-oriented market will be driven by the National E-Invoicing Initiative, which will lead to opportunities for PEPPOL-ready service providers to provide systems integration services to both large enterprises and small and medium enterprises (SMEs) in the medium term. Meanwhile, the recently approved Cyber Security Bill 2024 will drive managed services spending within the National Critical Information Infrastructure (NCII) industries. IDC

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