Dubai: The Middle East is expected to be the third fastest growing IT market in the world after Latin America and Central and Eastern Europe.
The total IT spending in the region is expected to rise by 7.3 per cent to $32 billion next year, registering a growth of 7.3 per cent year on year.
“The economic story is quite positive in the region with lot of investments in improving government services, education and healthcare services to be key drivers in the Gulf. All the Gulf countries are expected to show strong economic growth next year with Qatar predicted to show the highest GDP growth (5.3 per cent) and Bahrain the lowest (3.2 per cent),” Jyoti Lalchandani, group vice-president and regional managing director for International Data Corporation (IDC) Middle East, Africa and Turkey, said on the sidelines of a press conference on ‘Top 10 Predictions for 2014’.
“City-focused” investments will gain momentum in Dubai, Doha and Abu Dhabi as they vie to attract tourists and investors, and gear up to host mega events such as Fifa World Cup 2022 (Doha) and World Expo 2020 (Dubai). Public sector investments for improving government services, education and healthcare services will also continue to be key drivers in the Gulf.
He said the growth in these markets will be driven by economic stability and resilience, supported by increased government spending. The economic outlook for the rest of the Middle East is somewhat mixed.
Smart City initiatives have “gained momentum” in the Gulf in recent years with three countries announcing projects for future smart cities, namely, the six economic cities in Saudi Arabia, the three projects in Qatar — Lusail’s Smart and Sustainable City, Pearl-Qatar Island, and Energy City Qatar — and two projects in UAE — Masdar City in Abu Dhabi and Smart City Dubai. IDC expects the total spending on machine-to-machine (M2M) connections in the Gulf countries to increase by 19 per cent in 2014 to reach $224 million.
“With the government’s Smart City and m-government plans already making a mark, Dubai is now more than ever before able to tap into the era of the Internet of Everything, driving the connections of people, processes, data, and things to achieve new levels of sustainable growth and quality of life,” said Rabih Dabboussi, Managing Director, Cisco UAE.
Lalchandani said that Dubai’s recent plans to convert the entire emirate into a smart city are expected to take the smart city initiatives in the Gulf to the next level.
“Consumers, public, communications and financial services sectors are expected to be the biggest spenders, contributing 74 per cent to the total spending in 2014,” he said.
He said Information and Communications Technology (ICT), which includes IT and telecom services, will grow by 5.1 per cent to $96 billion next year. Telecom services will grow by four per cent.
In the Gulf, software and services sector to represent 40 per cent of IT spending, compared to 30 per cent in the region.
