Spending on information and communications technology (ICT) in the Middle East and Africa is expected to reach $230 billion (Dh844.1 billion) this year, a year-on-year increase of 2.7 per cent, an industry expert said.
“The growth is driven mainly by the third platform (cloud, big data analytics, mobile and social) and emerging technologies such as the Internet of Things (IoT), artificial intelligence/cognitive systems, robotics, augmented and virtual reality, 3D printing and Blockchain,” said Jyoti Lalchandani, vice-president and regional managing director for research firm International Data Corporation (IDC).
However, he said that the total IT spend is below the 2015 level of $90 billion.
He said that the IT spending in the region will reach close to $88 billion this year, a year-on-year growth of 2.7 per cent compared to $86 billion in 2017.
IT contributes roughly 40 per cent of the total ICT spending while telcos share the remaining 60 per cent.
Lalchandani said that telcos transformation to ‘ICT players’ will accelerate this year. They will set up dedicated business units and portfolio expansion to boost its revenue streams. ICT portfolios will expand in breadth and depth to include digital transformation and emerging technologies.
“Digital transformation initiatives will top the chief information officer’s agenda, as emerging technologies are increasingly leveraged in an effort to drive desired business outcomes,” he said.
In 2018, the IT spending in the UAE is expected to rise by 4.8 per cent to $7.7 billion and 4.3 per cent in Saudi Arabia to $11 billion.
In the UAE, he said that infrastructure projects related to Dubai Expo 2020 and the UAE Vision 2021 is driving the demand but “we are cautious on inflationary concerns due to the value-added tax among consumers.”
He said that growth is expected to happen in the IT services sector (6 per cent), software (4.8 per cent), server, storage and networks (2.3 per cent) and mobile devices (2.2 per cent) while IT peripherals and displays will witness a fall of 1.4 per cent and PC and tablets by 2.7 per cent.
However, he said that public cloud spending in the region is expected to cross $1.1 billion 2018 compared to $952 million last year and the big data and analytics market will touch $2.4 billion this year.
“Economic diversification will finally push Middle East governments to establish progressive cloud regulations. We expect an increase in datacentre buildouts by service providers rather than enterprises,” he said.
Spending on emerging technologies will grow at nearly 20 per cent in 2018 as use cases go mainstream, he said.
Paul Black, program director for telecoms and networking at IDC, said that IoT spending is expected to surpass $10 billion by 2020 with manufacturing, utilities, health care and transport industries forming the key industry markets.
He said that the region is growing from a relatively small base of IoT spending, less than one per cent of the global spend. In 2017, the total IoT spend stood at $6.07 billion.