Ahead of the Gartner Symposium/ITxpo in Dubai, Gartner Inc. revealed that MENA IT spending is projected to reach $155 billion in 2018, a 3.4 percent increase from 2017. A majority of that increase will be seen in consumer communication services, mainly mobile voice and data.
The company also stated that software spending will experience the strongest growth in 2018, with a 12.7 percent increase year over year. The growth has been driven by companies pursuing new functionalities in major back-office systems such as supply chain management, ERP, and customer service.
However other segments are still facing slow growth, with regional Cloud spending being some of the lowest in the world when measured as a percentage of total IT spending.
“There are insufficient local hyper-scale and large-scale data centers to support cloud systems, which cause local organizations to derive cloud offering from abroad,” said Peter Sondergaard, executive vice president and global head of research at Gartner. “Moreover, latency, legal and local currency makes this option problematic and limits cloud adoption among businesses in MENA.”
An increase in the demand for premium mobile phones has led to communication providers looking at ways to expand coverage and increase data transfer rates while keeping prices competitive.
A digital takeover
Sondergaard also commented on a growing focus on initiatives and improvements with a specific digital focus. “Digital business transformation is creating new industry revenue streams. In 2018, the leading segments driving IT spending growth in the region are banking and securities growing at 3.6 percent, insurance at 2.9 percent and retail at 2.8 percent. IT spending in the banking sector is driven by its move into digital business and the corresponding investments in technologies such as analytics, blockchain and artificial intelligence. For the insurance sector, IT spending is led by investment in software applications.”
“MENA CIOs must embrace digital transformation. They need to build the momentum to scale and create value by amplifying the power of their people, their organization culture, and their technology platform to deliver breakthrough value.” concluded Sondergaard.