ICT sector defies challenges with growth in 2015

It is expected that the industry will register a growth of 14.2 percent to RM70.9 billion in 2015 compared with RM62.1 billion or a 12.5 percent growth in 2014.

This was mainly driven by the increased use of mobile devices, social media, cloud solutions, e-commerce and the Big Data Analytics (BDA), which had spurred the growth of Internet of Things (IoT), said the National ICT Association of Malaysia (PIKOM) chairman Chin Chee Seong.

"We foresee that these trends will continue in 2016, as the formation of the ASEAN Economic Community (AEC) will likely provide a larger market for the ICT industry," he told Bernama.

However, amidst the bright side of things, the industry was not spared from the global doldrums, seeing a drop of about 30 percent in the number of ICT retailers this year following the depreciation of the local currency.

Although the implementation of Goods and Services Tax (GST) on Apr 1, 2015, helped cushion the impact as GST is passed onto customers, it was not able to cover for the loss, thus causing some companies to close shop.

"This is evident from the number of PIKOM's membership which had reduced to 800 from 1,500 members, previously.

"The cost of living and doing business has increased and retailers, particularly the smaller players faced many challenges, including the raising of e-commerce," said Chin.

Nevertheless, he said the ICT sector was still expected to record a growth of between RM79 billion and RM81 billion or about 12-14 percent next year, contributed mainly by e-commerce and BDA.

In line with PIKOM's 30th anniversary in 2016, Chin said its annual PIKOM fair would also be introducing new elements to stay relevant with customers despite the shift of preference to e-commerce.

In fact, this year there was also some digital initiatives by the government to enhance the quality of living for the low income communities.

Multimedia Development Corp (MDeC), the lead agency for Digital Malaysia, introduced the National 'eRezeki' Programme for individuals mainly the "Bottom-40 (B40)", to register as digital workers.

eRezeki is a safe and trustworthy online environment for Malaysians to earn extra income, where they can perform simple digit-based tasks, trained by 'Siberguru' at eRezeki centres along with eRezeki representatives that provide ICT connectivity.

It also recently appointed Universiti Tenaga Nasional (Uniten) to help students to search for jobs while help them to leverage skills in different fields of study to generate side income via the Internet.

In Budget 2016, the government allocated RM100 million to e-Rezeki and eUsahawan programmes under the national agenda for Digital Malaysia.

MDeC, which oversees the development of MSC Malaysia, also saw a 40 percent increase in participation to 400 e-Tailers this year in its #MYCyberSALE initiative to empower small and medium enterprises (SMEs) through the e-commerce platform.

The annual event, in its second year, recorded sales of products and services to the tune of RM115 million, almost double last year's figure of RM67.38 million.

On a similar development for the ICT's software, MIMOS Bhd CEO Datuk Abdul Wahab Abdullah said local industry players should focus on developing primary home-grown softwares and application solutions, to be more cost efficient.

"This is because the contribution margin ratio of hardware business is lower as it depends on the volume of sales, whereas software business is able to generate more lucrative income in terms of the value," said Abdul Wahab.

He said it would reduce dependency on foreign made IT products and enable businesses to freely market their products globally.

"For example, Microsoft Malaysia cannot market the operating system software elsewhere because it is customised and each country has its own Microsoft appointed dealers," said Abdul Wahab.

As a research and development agency under the Ministry of Science, Technology and Innovation (MOSTI), Abdul Wahab said MIMOS was able to facilitate local players to develop their own IT products with only a commitment fee for as low as RM20,000.

To-date, 65 local companies known as 'technology recipients' have adopted technology developed by MIMOS.

On a related development, investment in solutions and services by businesses to defend against malware, advanced persistent threat, targeted attacks or distributed denial of service (DDoS) attacks is expected to increase significantly in 2016.

CyberSecurity Malaysia CEO Dr Amirudin Abdul Wahab said the use of mobile devices, the spread of IoT and the convergence of operational technology with ICT would enable attackers to have much greater impact to violate.

"Cyber espionage will also increase as dark market for malware codes and hacking services could enable cyber espionage malware to be used for financial intelligence-gathering and the manipulation of markets in favour of attackers," said Amirudin.

This year alone, he said a number of Malaysia's websites were hacked including Malaysia Airlines by 'Lizard Squad', Google Malaysia by Bangladeshi hackers and 'AnonGhost' which took over the Facebook and Twitter accounts of the Royal Malaysian Police.

Threat from social media was also discovered when police found more than 500 Facebook accounts, belonging to Malaysians, linked to the Islamic State (IS) militants.

"As at Oct 31, 2015, a total of 8,803 incidents reported to CyberSecurity Malaysia with top five cyber incidents in Malaysia namely, spam, fraud, intrusion, malicious code and cyber harassment," he said.