Even as Singapore’s ICT spending is expected to decline as opposed to the growth expected before the COVID-19 outbreak, communications sector will be the silver lining with an increase of 6.0% in ICT spending.
An analysis of GlobalData’s Market Opportunity Forecasts model reveals that the COVID-19 outbreak will lead to a decrease in ICT spending from last year across almost all segments of the market.
Spending on hardware is expected to fall by 6.3% as against the growth of 10.7% in 2019 and the projected growth of 8.4% before the COVID-19 outbreak.
Manish Chaurasiya, Senior Technology Analyst at GlobalData, comments: “Enterprises in Singapore are restricting their infrastructure upgrade plans to minimize their capital expenditures to retain profitability during the on-going COVID-19 pandemic.”
The demand for software is also set to fall, with enterprises delaying the roll-out of applications in 2020. The market for enterprise collaboration platforms, however, is expected to increase by 25.8%, driven by the increasing demand for collaboration due to remote working.
The ICT services market in Singapore is also anticipated to fall, with enterprises looking to curb upcoming projects and non-critical ICT spending and delay their long-term digital transformation initiatives until at least next year to mitigate the risk of financial instability in business operations.
Public cloud will lead the cloud space, with the market projected to grow by 3.7% over 2019. Enterprises in Singapore are likely to continue to invest in public cloud, owning to high infrastructure cost, data privacy and security, and operational performance.
Looking at the sector-wise impact of the COVID-19 pandemic, the travel and leisure sector in Singapore will be the most affected, with ICT spending in the sector projected to fall by 18.6% in 2020 when compared to 2019. Similarly, ICT spending in consumer goods and the foodservice sectors is also expected to fall sharply.
Mr Chaurasiya concludes: “As enterprises work remotely amidst the COVID-19 pandemic, remote accessibility and collaboration are critical for enterprises to achieve business continuity. As a result, the adoption of cloud-based solutions has increased across enterprises in the country. SMEs, as compared to large enterprises, will continue to emerge as a significant market for cloud computing in the domestic Singapore market, owing to the absence of legacy infrastructure and fairly straight-forward requirements. ICT vendors would do well to focus on SMEs in Singapore until the large enterprises work out their long-term digital transformation strategies.”