Middle East’s digital transformation laggard status may be a benefit

Unencumbered by heavily customized legacy systems, Middle East enterprises may have a clearer path toward leveraging IT to overhaul how they do businesses than companies in other regions.

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Is the Middle East lagging behind in digital transformation? To a large degree, it depends on which metrics are used to measure digital transformation, and your perspective on how far along enterprises in the rest of the world are on the path to fundamentally change how they use technology, human resources and business processes to improve their performance and value to customers.

Overall, investment in IT in the Middle East and North Africa (MENA) is growing, with spending in the region having been projected by Gartner to rise 1.8 percent to reach US$160 billion in 2019. Spending on areas of enterprise IT often associated with digital transformation is rising significantly, with sales of software as a service expected to jump by 25 percent during the course of last year. Spending is expected to jump by 19 percent to reach nearly US$3 billion for CRM, and to increase by 12 percent to hit $1.2 billion for BI, analytics, and advanced analytics (including AI).

Despite the growth of SaaS in the region, MENA still falls below the global average for cloud spending as a percentage of the total enterprise IT budget. "They are six to seven years behind U.S. spending on cloud – some of that is lack of availability of hyperscale cloud providers, and we are also facing in this region a preference for on-prem," said John Lovelock, a research vice president at Gartner.

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