UC Growing Rapidly in Malaysia

Unified communications (UC) made major strides in Malaysia during the second half of 2012. A recent IDC (News - Alert) study found that between July 2012 and December 2012, the market grew 14 percent to $47.5 million.

The growth in the second half of the year propelled the industry to $89.2 million, which was a 22-percent increase over the previous year.

IDC credited Malaysia's May 5 elections for driving the UC increases. Typically, businesses push their resources into new developments before the government changes hands. That way, they are familiar with the government's existing guidelines and regulations. At the same time, even though elections have ended, IDC analysts predict that UC spending will continue to grow.

Enterprise telephony was the largest segment of the market with growth of 50.6 percent. It was followed by enterprise collaboration apps, contact center applications and equipment, and then enterprise video conferencing solutions.

Video conferencing currently has the smallest portion of UC market share, but was the most rapidly growing sector in 2012 with an increase of 64.2 percent. Currently, Cisco (News - Alert) and Polycom dominate the video conferencing market, and many Malaysian businesses are implementing room-sized solutions.

"We see IP telephony deployment happening steadfastly in the country with fierce competition among vendors such as Cisco, Avaya, Alcatel-Lucent and NEC (News - Alert)," said Tan Hwee Xian, market analyst at IDC's Asia/Pacific Communications Group. "Deployment of IP telephony on the enterprise network will continue to be a significant form of UC&C in Malaysia."

Tan also noted the emergence of many UC-as-a-Service (UCaaS) solutions in Malaysia. These services allow businesses to take advantage of UC without major hardware expenditures. "With widespread availability of UCaaS solutions arriving in the marketplace, we are expecting more UCaaS offerings which are opex-friendly to appear in the market."

Even though UCaaS may make the market more service-oriented, certain verticals like government, education, healthcare, retail banking and oil and gas will keep spending on enterprise video conferencing.

"We believe the UC&C industry will continue to grow in the country, with conversations being redefined and moving away from cost savings to business process transformation," Tan concluded.