Business IT spending in the UAE  is forecast to reach $4.36 billion in 2014, increasing 8.3 per cent year-on-year, according to a report from International Data Corporation (IDC).
The public sector will account for a major chunk of business IT spending with the government predicted to spend around $1.12 billion, constituting around 24.3 per cent of total IT expenditure.
The rise in expenditure is primarily driven by official initiatives to offer more government services online and on mobile platforms, the report said.
In addition, government-backed projects, which aim to increase the use of information and communication technology (ICT) in educational institutions and the rising demand in the healthcare sector for paperless procedures have also caused IT spending to surge .
Banking, insurance and securities service providers are also predicted to spend heavily in IT this year. Organisations in this industry are forecast to invest $719 million to develop IT in 2014, according to IDC.
The rapid expansion of branch and ATM networks, investments in online and mobile banking channels, and the need for better regulatory compliance are some of the factors driving the growth of ICT investments  in the banking sector.
However, the consumer IT spending in the UAE is expected to contract 8.4 per cent year-on-year as a result of a stagnating PC market. It is estimated to account for 30.5 per cent of total IT expenditure during 2014, the report said.
IDC also forecasted total IT spending in the UAE to grow at a compound annual growth rate of six per cent between 2013 and 2017 to reach $8.06 billion in 2017.
“Robust growth of the UAE’s IT market is expected to continue throughout the 2013–2017 forecast period,” says Jebin George, a senior research analyst at IDC Middle East, Africa, and Turkey.
“IT vendors will find the biggest opportunities in the government sector, as it is the largest and fastest growing market. Communications finance, and oil and gas will continue the other major vertical markets for IT spending , while healthcare, transport, and utilities are growing the fastest.”
The UAE has been seeing a rise in government initiatives offering official services on mobile and online platforms.
Dubai’s Smart City initiative, unveiled last year, has called for 1000 government services to go ‘smart’ during the next three years.