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Middle East IT spending to hit $211bn in 2014

Posted On April 1, 2014

Posted by AG Reporter

Middle East IT spending to hit $211bn in 2014, says Gartner

Peter Sondergaard, senior vice president and global head of research at Gartner, provided the latest outlook for the IT industry today to an audience of more than 500 CIOs and IT leaders at Gartner Symposium/ITxpo, which is taking place here through April 3.

“The Middle East is projected to reach US$243 billion by 2018, which will represent 5.6 percent of worldwide IT spending,” said Mr. Sondergaard. Areas of emerging expansion such as mobility, smart government, big data and Internet of Things (IoT), will prove to be critical in the ongoing transformation and modernization process of the region. In addition, large IT investments by verticals such as communications, media and services, banking and securities, government, manufacturing and natural resources, offer strong opportunities for technology and service providers.”

SEE ALSO: MENA Banking and Securities companies increase Software spending

Critical to the UAE is to leverage the diverse existing foreign human capital by accelerating investment in higher education institutions, startups, IT innovation, and creating a ready pool of resources ripe for internal and external investment.”

There is a great opportunity with  the UAE’s Vision 2021 initiative, and the grants that support it, as it will serve as a major catalyst for IT initiatives in education, manufacturing and government services. The UAE is emphasizing clean energy initiatives, such as solar power and nuclear energy, which will serve to create jobs, attract non-petroleum-based businesses to the region and help diversify the economy. The UAE government is looking to diversify its economy, and it estimates that manufacturing will account for 25 percent of its GDP by 2015.

ME spending on devices is forecast to reach US$37 billion in 2014, up 24 percent from 2013 (see Table 1). Devices are represented by mobile phones, media tablets, PCs, and printers, with mobile phones excelling with 30 percent spending growth in 2014. Mobile phone spending is forecast to surpass US$39 billion in 2018.”

“Mobile phone adoption has been paramount in human and business development. With new apps proliferating, users in general will continue enhancing communications and economic growth at various levels of the society in the ME,” said  Mr. Sondergaard. “ME users have been adopting iOS and Android-based devices at a fast pace. The demand for premium and basic phones is maintained by the short replacement cycles – some countries, such as Bahrain and Qatar, have replacement cycles that are close to one year or less, while the global average for these phones is more than two years.”

Table 1. Middle East – IT Spending Estimate (US$B)

In 2014, ME software spending is forecast to grow nearly 12 percent over 2013. ME accounts for about 1.4 percent of global software spending, and it has good long-term prospects for enterprise software vendors looking for new growth. Software hotspots are in large organizations in the telecom, banking, air travel and defense sectors, as well as central government and the natural resources sector. Most money is spent on database management systems, operating systems, enterprise resource planning and application infrastructure and middleware.

The telecom services market continues to be the largest spending market, representing 74 percent of total IT spending in the region in 2014. Gartner’s analysis shows that telecom services will  achieve almost 5 percent growth in 2014, with mobile voice services reaching US$93 billion and mobile data services US$27 billion.


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