Launched earlier this year, the UAE government's 'Digital Economy Strategy' aims to double its contribution to the GDP from 9.7 per cent to 19.4 per cent in the space of 10 years. Image Credit: Gulf News Archives

Gitex has long been a key platform for the UAE and the wider Middle East to showcase the very latest technology innovations and advances. This year, with the pace of digital transformation continuing to accelerate, we expect some remarkable developments across a whole host of technologies.

With IDC forecasting spending on ICT in the UAE will reach $19 billion this year, up from $18.3 billion in 2021, let’s take a look at the trends that are shaping this growth.

Rise of digital economy

Launched earlier this year, the UAE government’s ‘Digital Economy Strategy’ aims to double its contribution to the GDP from 9.7 per cent to 19.4 per cent in the space of 10 years. This strategy is already bearing fruit as the number of digital companies operating in the country is expanding significantly, with the fintech, ecommerce, and D2C (direct to consumer) segments leading. These companies are disrupting business models and value chains, driving incumbent players to develop new innovation models, engage in ecosystem partnerships, and launch or acquire digital spin-offs.

At the same time, IDC research shows that more than three-quarters of CIOs in the UAE perceive the digitalisation of operations (process automation, re-engineering, and productivity improvements) to be a key priority for the next 12–18 months. Deriving a larger share of revenues from digital products, services, channels, and platforms is a key priority for over half the CIOs, which will only add fuel to an already thriving digital economy.

Cloud-first strategies

Cloud is undoubtedly becoming the de facto operating platform for the ongoing digital revolution, and the vast majority of businesses are turning to the technology as their first port of call for digital initiatives. Recent IDC research shows that nearly 70 per cent of UAE enterprises are now moving from discovery and piloting to significant implementation of business apps in the cloud.

The issue of digital sovereignty is proving to be a priority for many organisations operating out of the UAE, particularly for those in highly regulated sectors such as government and financial services. As a result, we are seeing increased investment in the provision of in-country data centers by hyper-scale cloud providers.

App modernisation is accelerating as organisations look to transform their app ‘estates’ by leveraging the opportunities presented by cloud solutions. Public cloud spending in the UAE is expected to grow 31.6 per cent year-on-year in 2022 to surpass $1.3 billion, while spending on private clouds is also continuing to rise and hybrid multi-clouds are increasingly becoming the norm for organisations across the UAE.

Evolving threat landscape

The unprecedented pace of digital adoption is also fueling significant security concerns, with organisations from the public and private sectors scrambling to navigate a host of emerging — and constantly evolving — threats. Their top security priorities for the next 12-18 months include securing employee identity, protecting APIs and applications from attacks, and securing their cloud deployments.

As a result, overall spending on security in the UAE is forecast to reach $797.7 million this year, an increase of 8.4 per cent from 2021. Digital trust will see the biggest leap, with the adoption of identity and access management software growing. Cloud security initiatives are also gaining mindshare among Middle East CIOs, with cloud security software set to be a significant area of investment.

Spending on AI

Organisations in the UAE are increasingly investing in artificial intelligence (AI) and machine learning (ML) and related software and services as they look to build efficiencies through automation and establish more agile operating environments. The pandemic undoubtedly fueled spending in this regard, particularly within the banking and finance, manufacturing, trade, healthcare, and government verticals, with the key business-use cases including augmented customer service agents, fraud analysis and investigation, augmented threat intelligence and prevention systems, and sales process recommendation and augmentation.

All of this is driving phenomenal growth, with IDC forecasting that annual spending on AI in the UAE will reach $846.5 million by 2026, representing a compound annual growth rate (CAGR) of 28.7 per cent over the 2021–26 period.

Sustainability initiatives

The issue of sustainability has emerged as a key priority for UAE organisations, and the potential impact and use of technology in sustainability strategies will be significant. Nearly 40 per cent of UAE organisations we surveyed have started the internal sustainability data discovery process. And with the UAE set to host next year’s UN Climate Change Conference (COP 28), we can expect initiatives related to sustainability to gather significant momentum.

Interest in the Metaverse

As is the case around the world, the Metaverse remains in the early stages of development for most businesses in the UAE, with only 2 per cent of those surveyed by IDC currently having a commercial use for it; however, interest in this emerging paradigm is surging. Indeed, 20 per cent of the CIOs we spoke to already have a plan to commercially leverage the Metaverse in the next 12 months, and we can expect this figure to grow over the coming years.

The announcement of the ‘Dubai Metaverse Strategy’, which was launched in July, underlines what an important space this is for the UAE, with Dubai aiming to create 40,000 jobs through the initiative and add $4 billion to its economy in the next five years.

The country already has long-term national strategies in place for blockchain and AI, and with this latest initiative, the aim is to turn Dubai into one of the world’s Top 10 Metaverse economies and a global hub for the Metaverse community. We’re intrigued to find out more this week at Gitex Global.