Businesses to Increase Digital Budgets, Spending in 2021

Published January 26th, 2021 - 12:15 GMT
Businesses to Increase Digital Budgets, Spending in 2021
Digital transformation strategies play a key role in economic diversification transformational efforts which is the prime focus for the Gulf governments. (Shutterstock)
Highlights
IT spending across the META will make a welcome return to growth this year, increasing 2.8 per cent to $77.5 billion.

Businesses have increased IT budgets for the current year as Covid-19 accelerates digital transformation paving growth in IT spending. A latest report from IDC indicates that after contracting 4.9 per cent in 2020, IT spending across the Middle East, Turkey, and Africa (META) will make a welcome return to growth this year, increasing 2.8 per cent to $77.5 billion.

The International Data Corporation (IDC) gathered more than 1,000 senior executives from the region’s most influential technology vendors, telecommunications operators, and IT service providers online recently at first ever virtual edition of IDC Directions Middle East, Turkey and Africa.

The annual event is a firm fixture on the ICT industry calendar and this year focused on the theme of ‘Resetting for the Next Normal: Strategies for Enabling the Future Digital Enterprise’.

Jyoti Lalchandani, group vice president and regional managing director, IDC, explained that spending on digital transformation (DX) is set to gather even more pace in the post-pandemic period, increasing from 25 per cent of total IT spending in 2020 to 37 per cent in 2024.

“The Covid-19 pandemic and subsequent economic fallout has accelerated digital transformation across the region, spurring unprecedented demand for contactless services, cloud solutions, and collaboration applications,” said Lalchandani. “Most economists predict a return to economic growth this year as vaccines become more widely available, and we expect that by 2022, 70 per cent of organisations worldwide will have increased their use of digital technologies, transforming existing business processes to drive new levels of customer engagement, employee productivity, and business resiliency.”

IDC expects 65 per cent of the world’s GDP to be digitalised by 2022, with direct DX investments totalling $6.8 trillion globally between 2020 and 2023.

Srinivas Reddy, vice-president and region head – UAE & Oman, Tech Mahindra, said: “With Covid, things have got accelerated and we are seeing tremendous traction and improvement from customers across the sectors whether its banking and financial services, government, trading and manufacturing organisation.”

Digital transformation strategies play a key role in economic diversification transformational efforts which is the prime focus for the Gulf governments. “IT spending will see a boost in 2021 especially after Covid-19 pandemic. Businesses are inclined towards digital transformation more than ever as they now understand that building and running a business with an online presence and right technology is crucial. Companies are spending much more on automated and digital solutions to increase productivity, engage with clients, increase sales.The UAE government launched blockchain strategy 2021 to transform 50 per cent of the government transactions into the blockchain platform by 2021. This shows how serious the UAE is towards the digital transformation,” said Amit Gupta, chief executive officer, WebVizion Global.

“The UAE Vision 2021 aims to transition the country into technology/ knowledge based economy which in turn promotes innovation, investing in research which results in overall development. International businesses are also looking at the UAE as the new digital hub and investing to grow their arms with this rising tide of technology,” added Gupta.


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