The information and communication technologies (ICT) landscape in Malaysia is nearing maturity and revenue growth from core sectors is slowing down. However, the advent of the Internet of Things (IoT) is giving rise to opportunities in the form of new business services. Hence, communication service providers (CSPs) must leverage their core competencies to capture horizontal revenue streams stemming from IoT, such as managed services and security, and cloud computing and storage.

New analysis from Frost & Sullivan, Internet of Things, finds that the IoT market in Asia-Pacific is expected grow at a compound annual growth rate of 35.1 percent between 2014 and 2020. In Malaysia, the deployment of IoT will gain traction in the transportation, logistics and connected consumer sectors such as wearables, connected homes and home automation.

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“Readily accessible and cost-effective storage, computing and programmable networking systems are fueling novel business applications and IT delivery models, thus facilitating a distributed intelligent network,” said Frost & Sullivan Information and Communication Technologies Industry Manager Serene Chan.

“Embedded systems will provide the crucial link between cloud solutions and fully autonomous end devices, speeding up the transition to IoT,” she added.

Finding value in the vast array of unstructured machine and connected device data available will be critical to support IoT-based services for a variety of industries. Currently, less than one percent of the data captured by sensors is used for analytics and optimization.

In addition, Malaysian CSPs struggle to offer IoT services due to market fragmentation as well as security and privacy concerns. These challenges are organizational rather than technical in nature, as CSPs still focus on selling connectivity instead of solutions and services.

“Entering into the IoT space requires industry players to acquire capabilities beyond their core functions. The CSPs in Malaysia must collaborate with a variety of partners to deliver relevant end-to-end services in specific industries,” noted Chan.

Thus, evolving from a cost-optimized connectivity provider to an IoT service provider will drive business objectives and enable innovations in the changing ICT domain.

Internet of Things is a Market Insight that is part of the Connected Industries Growth Partnership Service program. This Insight outlines opportunities for Malaysian CSPs stemming from the advent of IoT. The insight also includes case studies and examples of IoT best practices employed by CSPs. The study concludes with insights and recommendations for market participants.

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