Gulf IT market to be worth $9b by year-end

Dubai: The Gulf's Information Technology (IT) market is enjoying fast growth and is expected to be worth just over $9 billion by the end of this year, according to industry experts.

"The Middle East and Africa region is growing at a phenomenal rate. Projections are that the market will cross the $12 billion mark by 2011," said Jyoti Lalchandani, vice-president and regional managing director, Middle East and Africa, International Data Corporation (IDC), a company providing market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets. Most of this growth will be in adding new initiatives to the industry.

"Forty per cent of IT budgets are going to be allocated towards new initiatives, such as supply chain management business management or consolidation of infrastructure," Lalchandani said.

Current IT spending in Middle East and Africa is $40 billion and this could grow to over $54 billion by 2011, according to research.

Continual adoption of IT across the large enterprise segment and the public sector, emergence of medium sized businesses adopting IT as well as increasing uptake of IT within the home segment is driving the industry growth, experts say.

Availability of skills is an issue that could affect the growth of IT in the region.

"The region is currently facing a shortage of skills in several areas such as networking, application, implementation, which is quiet predominant in other parts of the world as well," Lalchandani said.

Another issue is that of inflation. "With high inflation costs, there is a skills problem of motivating and retaining staff. And cost of resources becomes even more expensive as inflation in the Gulf is quite high," he said. "The question is not about should we implement but do we have enough resources to implement the solutions and applications that are needed," he added.

Security

Security was also highlighted as an important issue, as organisations face challenges in regard to IT security. As a solution to the lack of human resources, "We need to get a lot more IT-trained students out of the system as this region moves into knowledge based economy.

"The only way UAE government can keep up with technology is to make sure that people have the right skills," Lalchandani said.

"So we are going to see a lot more public-private partnership model. IT and telecom companies will partner with government, to make sure that IT training is provided in schools," he added.

Experts say the government should invest in training centres to make sure graduates are sufficiently trained and ready to be employed in the IT sector to fill up the huge resource gap.

"UAE and other countries in the Gulf have always relied on foreign labour. In the IT industry, all countries in the world look to the same resource set. We need to have a good local supply of graduates to fill the demand in the IT industry," Lalchandani said. There are a lot of creative opportunities for IT and telecom companies in the Gulf, experts say.

With high inflation costs, there is a skills problem of motivating and retaining staff. And cost of resources becomes even more expensive as inflation in the Gulf is quite high."

Jyoti Lalchandani, Vice-president and regional managing director,Middle East and Africa, IDC