Spending on information technology in the Middle East will far outpace IT spending in developed markets this year as sales of mobile gadgets soar and companies invest heavily in storage for growing amounts of data.
The overall amount spent on IT hardware, software and services - excluding the sales of mobile phones - is forecast to total about US$21.5 billion (Dh78.97bn) in the Middle East this year, up 11 per cent from last year. IT spending in the region rose 7 to 8 per cent last year, and just 2 to 3 per cent in developed markets, according to International Data Corporation (IDC), a market research firm in the technology sector.
"The opportunities in the future are really in emerging markets," said Kirk Campbell, the president and chief executive of IDC.
Mr Campbell, along with regional executives from technology giants such as Dell, HP and Intel, spoke ahead of the IDC Middle East CIO Summit. The event for chief information officers in the region is to begin today in Fujairah.
Many of these experts predict investment of millions of dollars in cloud computing and other data-storage services, particularly as companies try to keep pace with consumers and other businesses that are increasingly using internet data via smartphones, tablets and notebook computers. "This is not about wheeling in a new shiny piece of infrastructure and saying you're now cloud-enabled," said Dave Brooke, the general manager for Dell in the Middle East and Turkey. "This is about millions and millions worth of infrastructure, and how do you … utilise it as a pool of infrastructure?"
In the UAE, IT spending is projected to hit $5.18bn this year, making the Emirates the second-largest IT market in the region after Saudi Arabia, where revenue is expected to total nearly $7bn this year, according to IDC.
Yet political unrest in parts of the wider region could dampen the overall 11 per cent growth projection for this year, by as much as 4 to 5 percentage points, warned Jyoti Lalchandani, the vice president and regional managing director of IDC Middle East, Africa and Turkey.
A recent IDC survey of chief information officers found that 66 per cent, compared with 59 per cent last year, said their biggest challenge this year is staff recruitment, development and retention.
The second most important concern, cited by nearly half of executives, is determining how to measure a return on investment on spending for cloud storage as well as other forms of IT spending.
"The challenge that exists today is how can we deploy cloud technology into our environment and see the return on investment," said Eyad Shihabi, the managing director for HP Middle East. "How can cloud services benefit the business and deliver some key, tangible deliverables that the business can benefit from?"