IT outsourcing new growth area for vendors in UAE market
The United Arab Emirates (UAE) outsourcing market is increasing sharply and will continue to enjoy a double-digit growth over the next few years, reported a recent study by IDC.
The overall value of the UAE IT services market reached $234.3 million in 2002 with outsourcing services accounting for about five percent of spending. The UAE IT services revenues is still characterized by relatively high spending on deploy and support services and system integration which together accounted for more than half of last year's spending on IT services. Higher value-added IT services such as IT training, custom application development and outsourcing are however claiming an increasing share of overall IT services spending making the UAE a hot spot for technology services in the Gulf region.
"Rising dependence on IT for business continuity combined with investments in relatively advanced IT products has created a higher incentive among local firms for using external providers to secure smooth running of production processes and to reduce down-time on mission-critical parts of their IT solutions", said Senior Analyst with IDC , Torben Pedersen. "As a result of higher demand, outsourcing providers are aggressively looking at ways to gain footage in the large account segment that traditionally has relied on in-house IT departments", continues Pedersen. "These include building offshore capabilities and using out-tasking delivery as an alternative to the traditional outsourcing model".
The report also sizes spending in other IT services areas such as network consulting and integration, IT training and education, system integration, application consulting and customization, and information system consulting and maps out top vendors within each services category as well as spending by vertical market segments. Over the next five years, IDC expects the UAE IT services market to expand at a CAGR of 11.7 percent to reach $408.1 million by 2007 with major areas of grow being IT training and education, application consulting and customization and outsourcing. — (menareport.com)
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