Dubai: There is a dramatic shift away from traditional IT towards digital business units in the Middle East, said an industry expert.
“Thirty-eight per cent of the total IT spend is outside of IT [hardware and software] already, with a disproportionate amount in digital. By 2017, it will be over 50 per cent,” Peter Sondergaard, senior vice-president and global head of research at Gartner, Inc, said at the Gartner Symposium/ITxpo 2015 on Tuesday.
Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the internet of Things.
“We see that digitisation is progressing on a worldwide scale. Transformation is a major theme for enterprises as they strive to become digital, with customer centricity being the major competitive advantage. This can be achieved through real-time visibility into one’s own business operations, identifying potential bottlenecks and through automated and optimised business processes, reacting dynamically to changing business environments,” said Dr Wolfram Jost, Chief Technology Officer at Software AG.
According to the research firm, ICT spending in the Middle East is projected to reach $214.7 billion (Dh787.9 billion) in 2015, registering a growth of 5.2 per cent compared to last year’s $204.04 billion.
“We have budgeted the oil price at $40 and the numbers may change next quarter as oil trades at over $60. I would not do a massive correction on ICT spending in the Gulf states,” he said.
“The Gulf states are in the midst of transformation and view technology as strategic and has become an important factor for the society. So, the Gulf states cannot rely on short-term fluctuations,” he said.
The top three CIO technology priorities in the Middle East region are business intelligence and analytics, infrastructure and data centre, and cloud.
Sondergaard said that sensor/internet of Things (IoT) are on the radar with no action planned and/or is in the medium to long-term planning. Robotics and 3D printing are not priorities in the Middle East this year.
The regional spending on devices is forecast to reach $36 billion in 2015, up 16 per cent from 2014. Devices are represented by mobile phones, media tablets, PCs and printers.
Telecom services continue to be the largest segment, accounting for 74 per cent of ICT spending in 2015.
“The impact that the digital business economy is having on the IT industry is dramatic. Since 2013, 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 per cent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled. In 2015, all of these things will double again,” he said.
He said that enterprises will spend over $40 billion on designing, implementing and operating the internet of Things this year.
“Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”