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7.3pc GROWTH

Mideast IT spending to top $32bn in 2014

Dubai, December 9, 2013

The Middle East region will be one of the world's fastest growing IT markets with spending on the products and services likely to top $32 billion in 2014 growing at an average 7.3 per cent year on year, according to a report.

Consumers, the public, communications and financial services sectors are expected to be the biggest IT spenders in the region, contributing to nearly 74 per cent of the total Middle East IT spending in 2014, said International Data Corporation (IDC) while announcing its annual predictions for 2014 for the information and communications technology (ICT) industry.

The IDC's predictions reflect the ongoing factors that will set the trend for the region’s ICT development. Experts anticipate that the trickle-down effect of these predictions will initiate a change within a variety of industries, such as government, healthcare, logistics, and finance, irt stated.

The public sector investments for improving government services, education and healthcare services will also continue to be key drivers in the GCC, the report added.

“Organisations in 2014 will be faced with a growing need to adapt as effects of the 3rd Platform continue to disrupt and change industries in the region,” remarked Jyoti Lalchandani, the group VP & regional managing director for IDC in the Middle East, Africa, and Turkey.

“We anticipate that major players in the region will make significant investments to enhance their infrastructure to scale up cloud and big data capabilities. In this context, securing data will be more vital than ever before,” she noted.

As per the 2014 IDC predictions, Dubai Smart City roll out will lead to an acceleration of smart city initiatives in other GCC countries.

Smart city initiatives have gained momentum in the GCC in recent years with three countries announcing projects for future smart cities, namely, the six economic cities in Saudi Arabia, the three projects in Qatar - Lusail's Smart and Sustainable City, Pearl-Qatar Island, and Energy City Qatar, - and two projects in UAE - Masdar City in Abu Dhabi and Smart City Dubai.

IDC expects the total spending on machine-to-machine (M2M) connections in the GCC countries to increase by 19 per cent in 2014 to reach $224 million.

"Multi-channel" strategies will drive citizen/resident services penetration and usage in the GCC with "Mobile" becoming a game changer, predicted the IDC report.

IDC predicts that government channel shift strategies and tactics in the GCC will increase the preference for electronic self-service transactions. Mobile devices will increasingly be a key facilitator of these interactions.

Much progress has been made by countries such as Bahrain, Saudi Arabia, the UAE, and Qatar in the automation and provisioning of online transactional government services. As a result, the projected increasing focus on mobility by the GCC government sector will have a positive impact on ICT spending, stated the ICD report.

Governments, said the report, will focus on strengthening security for national information assets, expanding agencies that monitor and protect the national frontline against cyber attacks - The Middle East has become a hot spot for cyber war as evident from the high profile breaches of key energy and government assets and the defacing of government websites by "hacktivists" and ongoing attacks on banks and financial services organizations.

IDC expects that in 2014, GCC governments will develop or strengthen national IT security policies and plans, and through national agencies, implement them, with these agencies assuming the coordination of activities among various authorities including the armed forces.

According to the report, the CIOs will shift towards a "Mobile first" approach for IT deployments - Mobility-First mind-set is now clearly visible among Middle East CIOs and organizations are expected to accelerated efforts, over the next 12 months, to transform IT systems for integrating mobility solutions, formulate Bring-Your-Own-Devices (BYOD) policies and take measures to address associated security concerns.

Some organization will also look to innovate around mobility and use it to improve customer experience. Besides, we expect mobility to increasingly become connected to the emerging elements of the IT mix: cloud computing, data analytics, and social business, thereby making business more agile, efficient and dynamic, stated the report.

IDC predicted that small screen and low cost options, and rapidly growing demand from commercial sectors will shape tablet adoption in 2014.

Tablets with smaller screen sizes will see growing demand and are expected to account for approximately 55 per cent of tablet shipments in the region next year.

Low-cost tablets running on the Android operating system will also witness growing acceptance. Several large-scale initiatives within the education sector are expected to be delivered in the region in the near future including planned investments by the governments of Egypt, the UAE and Qatar in the education sector, stated the report.

"Predictive" and "Operational intelligence" will drive adoption of advanced analytics; Big data deployments will move from "pilot" to "production" - Increasing demand for "insights" from data, particularly from the line-of-business (LOB) executives will spur organizations to step up implementation of analytics technologies, going beyond basic query and reporting tools towards data warehouses and data visualization tools.

Also IDC predicted that acceptance of Cloud will accelerate, with Private Cloud & SaaS adoption dominating investment plans. "In 2014, some organizations are expected to start realizing that they can derive even greater benefits from a full-fledged private cloud implementation. Not only will this lead to growth in private cloud revenues but will also indirectly impact spend on hardware, software and services as infrastructure and applications environments are modernized as part of these broader private cloud deployments."

The skills gap will widen as demand for 3rd platform technologies rises and supply of local skills lags - Lack of availability of skills on 3rd platform technologies such as mobility, analytics, cloud and social and enabling technologies such as security and virtualization, will put substantial pressure on IT providers and end user organizations. Much of the supply of skills will continue to come from expatriates as the availability of local ICT workers remains relatively low, said the report.

IDC pointed out that telcos will further strengthen and "verticalize" current IT services portfolios, and build new professional services and SaaS capability.

"Telcos will continue to develop and expand their ICT services portfolios by forging partnerships with vendors to gain new capability, and leveraging their infrastructure assets and network capabilities," stated the report.-TradeArabia News Service




Tags: Middle East | IT Spending |

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