“This will take time for revenue to grow because their customers will also need to change their procurement processes to cater to this.”
Digital
During the next twelve months, Milroy says digital disruption is set to be the norm across industries as they look to transform to keep their business relevant amidst the ever changing technological landscape.
According to Milroy, this trend will lead new business models and is set to stay.
“The Product as a Service model will become the norm in many industries,” Milroy adds.
“Over 70 percent of Fortune 500 companies will operate Product as a Service business models, with the Automotive Industry and Electronics Industry expected to lead this revolution at 15 percent and 13 percent respectively.”
Key examples of Product as a Service include auto makers offering car sharing services on a pay per use system (Automotive), medical device manufacturers offering health monitoring systems (Healthcare) and IT hardware providers offering separation of products and services businesses (IT).
Digital Services
Milroy says a new set of digital services are emerging as opportunities, with the big two opportunities for APAC being mobile payments and e-commerce.
For SEA alone, the e-commerce segment is expected to grow at a CAGR of 23 percent from 2015-2020 and will be valued at nearly $US20 billion for ASEAN countries with Indonesia, Malaysia and Singapore expected to show the strongest growth.
The key drivers for e-commerce growth include expanding middle class population, changing consumption and purchasing patterns.
Also, one other emerging area will be mobile payments, which will account for more than 10 percent of total payment transactions in APAC by 2020 with emerging APAC countries showing higher growth.
“We expect mobile payments to also offer major opportunities for traditional PoS players to move into new mobile payment platforms,” adds Ajay Sunder, Vice President of ICT Asia Pacific, Frost & Sullivan.
Data Centre and Cloud
Sunder says the Asia-Pacific data centre market is a state of flux with most service providers are in the process of fine-tuning their strategies around data centres and cloud computing.
“On one hand, the industry is witnessing large scale data centre construction frenzy and with increasing demand from cloud-enabled technologies, such as Big Data and IoT, there is greater competition than ever before,” Sunder adds.
“This is leading to price erosion in the market as well as industry consolidation due to lower than expected Return on Investments.”
Putting that into context, Frost & Sullivan predicts that the industry will witness greater consolidation in the market, driven by the need to offload data centre assets.
“This will drive the entry of new players, such as utilities and real estate companies, into the market as we see backward and forward integration,” Sunder adds.
