Dubai : Information technology spending in the UAE is expected to witness a 9.1 per cent growth this year to $15.91 billion (Dh58.39 billion) compared to last year's $14.54 billion as focus shifts to broader IT services, said a top industry expert.
"Consumer spending will be much stronger than enterprise spending this year. Overall enterprise spending will be around 25 per cent of the total IT spending while the rest is for consumer spending," Vittorio D'Orazio, principal research analyst at Gartner, told Gulf News in a telephone interview last week.
Key growth
He said the key growth area this year will be the telecommunication sector which represents 79 per cent of the total IT spending to $12.53 billion followed by hardware by 14 per cent to $2.21 billion, IT services by 6 per cent to $1 billion and software by around 1 per cent to $147 million.
Spending in 2009 witnessed a marginal rise of 0.97 per cent compared to $14.40 billion in 2008 despite global recession.
He said among the Gulf countries, the UAE was affected more than other states. However, IT spending in Abu Dhabi is expected to remain strong for the next few years and many IT companies will be setting up bases there.
Growth in Dubai's IT spending is expected to gain momentum in 2011 while IT spending will be stable this year.
He said the government and its sovereign wealth fund-funded infrastructure projects are advancing at an enormous rate with robust opportunities in the industry, especially in Abu Dhabi.
"IT services will attain interest this year in the UAE as there is a marked shift in enterprise IT spending profiles from infrastructure spending to more service-oriented spending. Front office, even though critical, has been attaining limelight so far while back office will gain focus this year onwards," D'Orazio said.
The hardware sector will witness a compound annual growth rate of 10.6 per cent in the 2008-2013 period followed by 9.8 per cent in the telecom sector, 7.6 per cent in the hardware sector and 3 per cent in the IT services sector during this period while total IT spending will witness a compound annual growth rate of 9.5 per cent during 2008-2013 period.
He said software-as-a-service (SaaS) and cloud computing, adoption of an alternative delivery model in the emirate, will change the purchasing trends of the IT services segment and will be increasingly considered by enterprises.
"Due to the current economic slowdown, key focus areas for enterprises will be service-orientated architecture, business process management, business process analysis, data integration, extreme transaction processing and complex event processing.
"Among the hardware sector, PCs witness a major pie as end-users who refrained from buying computers last year will be attracted by the lower-priced netbooks this year and also with the introduction of Windows 7. Virtualisation or density technologies such as blades, are important and growing technologies in the region," he said in a statement.
