Embedded systems will see the Internet of Things (IoT) market in Asia-Pacific grow at a CAGR of 35% in the period 2014 to 2020, according to Frost & Sullivan.
In Malaysia, the transportation, logistics and connected consumer sectors such as wearables, connected homes and home automation, will be the first to find ways to integrate IoT.
The development of IoT comes at a crucial moment for the ICT sector in Malaysia, as it will give rise to new-business opportunities at a time when the landscape is nearing maturity and revenue growth, says the market research firm.
In order for telecoms companies to capture horizontal revenue streams stemming from IoT – such as managed services and security, and cloud computing and storage – they must leverage their core competencies, it adds.
"Entering into the IoT space requires industry players to acquire capabilities beyond their core functions," said Serene Chan, Frost & Sullivan's ICT industry manager.
"The communication service providers in Malaysia must collaborate with a variety of partners to deliver relevant end-to-end services in specific industries."
She said that evolving from a cost-optimized connectivity provider to an IoT service provider will drive business objectives and enable innovations in the changing ICT domain. Meanwhile, embedded systems will provide the "crucial link" between cloud solutions and fully autonomous end devices, thus speeding up the transition to IoT, Chan added.
Finding value in the myriad of unstructured machine and connected device data available will be vital to support IoT-based services for a variety of industries, according to the analysis. Currently, less than 1% of the data captured by sensors is used for analytics and optimization.
However, Malaysian operators are continuing to find it difficult to offer IoT services due to market fragmentation alongside security and privacy concerns. But, there is a feeling that these struggles can be overcome, once operators focus on selling solutions and services instead of connectivity.