Middle East ICT spending to reach $211.1 billion in 2014
IT budgets are not increasing substantially across the world and that is hardly able to cover the global inflation, an industry expert said.
“Spending on technologies is increasing fast and we are seeing a big increase in spending outside the IT organisation,” Peter Sondergaard, senior vice-president and global head of research at Gartner, said on the sidelines of the eighth Gartner Symposium/ITxpo which is taking place in Dubai from April 1-3.
He said there is a significance difference in the country-wide spending patterns and Gulf countries are performing much better than the global average on spending.
According to Gartner, ICT spending in the Middle East is expected to reach $211.1 billion this year, registering a growth of eight per cent compared to $195.6 billion last year.
The average IT budget change in the Gulf countries between 2013 and 2014 is nine per cent compared to the global average of 0.2 per cent.
Around 26 per cent of the global spend is happening outside the IT organisation, mainly in marketing budget. In the Gulf, he said the marketing budget is just around three per cent.
“Emerging expansion such as mobility, smart government, big data and internet of things (IoT), will prove to be critical in the ongoing transformation and modernisation process of the region. In addition, large IT investments by verticals such as communications, media and services, banking and securities, government, manufacturing and natural resources, offer strong opportunities for technology and service providers,” he said.
Vision 2021 initiative
He said there is a great opportunity with the UAE’s Vision 2021 initiative, and the grants that support it, as it will serve as a “major catalyst” for IT initiatives in education, manufacturing and government services.
The UAE is emphasising clean energy initiatives, such as solar power and nuclear energy, which will serve to create jobs, attract non-petroleum based businesses to the region and help diversify the economy.
The UAE government is looking to diversify its economy, and it estimates that manufacturing will account for 25 per cent of its GDP by 2015, he said.
Spending on devices like mobile phones, media tablets, PCs and printers is forecast to reach $37 billion in 2014, up 24 per cent from 2013. About 30 per cent of the spending growth is going to come from mobile phones this year.
“Mobile phone adoption has been paramount in human and business development. With new apps proliferating, users in general will continue enhancing communications and economic growth at various levels of the society in the Middle East,” Sondergaard said.
“The users have been adopting iOS and Android-based devices at a fast pace. The demand for premium and basic phones is maintained by the short replacement cycles — some countries, such as Bahrain and Qatar, have replacement cycles that are close to one year or less, while the global average for these phones is more than two years,” he said.
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