Business | Technology
Saudi Arabia top IT spender in region - IDC
Research firm notes shift toward bigger allocations for software and services.
- By Naushad K. Cherrayil, Staff Reporter
- Published: 00:03 October 19, 2008
Dubai: Saudi Arabia and the UAE are seen emerging as leading spenders on information technology among the Gulf countries and the six GCC countries together will account for nearly 23 per cent of the total IT spending in the Middle East and Africa (MEA) region, according to research firm International Data Corp (IDC).
Saudi Arabia is projected to spend $3.76 billion (Dh13.81 billion) on IT, an increase of 11.28 per cent compared to its spending of $3.38 billion in 2007, and the UAE is expected to spend $2.99b (Dh11.01 billion) this year compared to $2.66 billion (Dh9.54 billion) last year while spending across the Middle East and Africa (MEA) region will cross $40 billion (Dh146.8 billion) this year.
"Hardware segment will remain the key driver and we are seeing a shift towards increased spending on software and services. We believe that some of the factors of mature markets are having higher spending on software and services rather than hardware," said Omar Shihab, research manager, PCs and Systems, IDC Middle East and Africa.
The Gulf region's total IT spending in 2006 stood at $6.82 billion.
IDC believes IT spending for the next three years will rise by about 15 per cent each year across the region but sees IT spending in the UAE growing by 19 to 20 per cent during the same period.
IT hardware accounted for 67 per cent of the total spendings of the UAE last year and 60 per cent of Saudi Arabia's IT spending. The data storage is showing promise in the region, growing 40 to 50 per cent each year, IDC said.
The IDC research indicates that total IT spending in the Gulf will reach over $9 billion (Dh33.03 billion) in 2008, registering an increase of over 15 per cent on the 2007 figures.
Saudi Arabia is the largest market in the region for IT products, accounting for 43 per cent of overall IT spending in the Gulf, followed by the UAE with 36 per cent, Kuwait with nine per cent, Qatar with five per cent, Bahrain with four per cent and Oman with three per cent.
IDC projected an extremely positive outlook for the UAE's IT market and said it was expected to carve out a 22.4-per cent share of the local IT market's earnings by 2010 amid unprecedented growth.
"If you look at mature markets in Western Europe, most of the spending is on software and services, but it is the other way round in our region. Obviously it has to do with infrastructure and the penetration rates. Our markets are still underdeveloped in terms of basic IT infrastructure. UAE and Saudi Arabia are expected to record huge growth in terms of software and services," Shihab said.
Jyoti Lalchandani, vice-president and regional managing director, IDC Middle East and Africa, said the Gulf's IT market was poised to cross $12 billion (Dh44.04 billion) by 2011, representing a growth rate of almost 12 per cent.
Enterprise solutions
"While we are documenting continued growth in investments around IT infrastructure, namely systems, PC's, storage, peripherals and networking equipment, spending in packaged software [particularly for enterprise applications, security and storage, network and systems management] and IT services is picking up nicely, at least in the mature Gulf markets, he said.
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