IT spending in Middle East, Africa to rise this year, IDC says

Investments in digital transformation and cloud technology will help drive a 2.8% increase in spending on IT this year in the META market (Middle East, Turkey and Africa), to a total of $77.5 billion, after a decline in 2020, according to market research company IDC.

IT spending last year was hit hard last year by the pandemic and declined by 4.9% in the META region, according to new research from IDC. The crisis caused by the pandemic, though, appears to have accelerated plans for digital transformation and related projects such as migration to cloud technology.

Among trends contributing to the adoption of cloud tech, the pandemic caused a mass move to remote work, increasing uptake of digital communications tools and highlighting the important role that cloud technology can play in business continuity strategy. In fact, spending on digital transformation (DX) is set to gather even more pace in the post-pandemic period, increasing from 25% of total IT spending in 2020 to 37% in 2024, according to IDC’s s group vice president and regional managing director, Jyoti Lalchandani.

“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 in a press release.

In Saudi Arabia alone, IT spending will rise 4.2% to reach $11.1 billion in 2021, with services and devices accounting for more than half of the market, according to IDC’s regional director for Saudi Arabia and Bahrain, Hamza Naqshbandi, in a separate statement on the Saudi market.

In IDC survey results released in the early stages of the pandemic, more than 25 percent of Saudi Arabian enterprises, spurred by disruptions caused by the pandemic, said they plan to use a combination of on-premises and dedicated private cloud systems, public clouds and legacy platforms. That’s because COVID-19 has accelerated reliance on multiple workloads: mobile apps, government-service internet portals and emerging technology including drones that can monitor public spaces and thermal imaging to screen for infectious diseases.

Markets across the META region are experiencing similar trends. Spending on public cloud services in the region will grow 26.7% to top $3.7 billion, IDC said. Spending on SaaS, PaaS, and IaaS will grow 24.5%, 30.6%, and 30.7%, respectively, according to the company. In addition, spending on professional cloud services will grow rapidly to total $1.6 billion.

In other areas of it, IDC predicted:

• Overall ICT spending (telecom services and IT) will grow 1.9% to surpass $209.5 billion.
• Spending on AI software will grow 23% to top $540 million.
• Spending on security (hardware, software, and services) will grow 7.1% to reach $3.3 billion.

“Most economists predict a return to economic growth this year as vaccines become more widely available, and we expect that by 2022, 70% of organizations 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,” Lalchandani said.

The market research was released last week at IDC’s IDC Directions 2021 Middle East, Turkey & Africa virtual event.