x Abu Dhabi, UAEMonday 24 July 2017

Tech boom looms on horizon in the Mena region

Spending on technology in the Middle East and Africa is set to surge by more than 14 per cent this year thanks to billions of dollars from Gulf organisations.

Spending on technology in the Middle East and Africa is set to surge by more than 14 per cent this year, bucking global trends in the industry.

Multibillion-dollar investments by Gulf organisations are predicted to contribute to the bulk of that growth, according to the research firm Gartner.

Information technology (IT) spending in the Middle East and Africa is set to grow 14.3 per cent this year, in contrast to flat or declining budgets in North America and Europe, Gartner said.

The firm's projection was based on a worldwide survey of chief information officers, who are responsible for IT budgets.

Mark McDonald, the group vice president for Gartner Executive Programmes, said the Gulf was "definitely a region to watch".

Companies in the region continue to experience growth, he said. "They're investing in new technology." Part of the reason is that regional companies are looking to expand in neighbouring markets.

"Companies based in the Gulf are investing in technology to reach out to the surrounding areas," said Mr McDonald.

Gartner did not put a value on the total market. However, a separate report by the research firm IDC said IT spending in the Middle East, Africa, and Turkey was expected to surpass US$65 billion (Dh238.7bn) this year, an increase of 12 per cent on last year.

Worldwide spending on IT is forecast to total $3.8 trillion this year, according to another report by Gartner published more recently.

Despite the rosy growth forecasts, Mr McDonald said two factors threatened to hold back spending in the Gulf region: a shortage of skilled workers and the relatively low number of IT vendors in the market.

"Talent is a significant issue - the ability to attract it, the ability to build it locally as well," he said. "The technology vendor marketplace is not as developed as it needs to be to achieve those strategies."

Gartner's study on IT spending was conducted in the fourth quarter of last year, and surveyed 2,335 executives in 45 countries, who between them handled more than $321bn in IT budgets. The average projected global growth in IT spending is expected to be from 2 to 3 per cent, the survey found.

Almost 100 companies in the Middle East and Africa were surveyed, the majority in the Gulf, Turkey and South Africa. The survey also included public-sector clients, Mr McDonald said.

Business priorities cited by chief information officers in the Middle East and Africa were growing their enterprises, attracting and retaining customers, and improving efficiencies, according to Gartner.

bflanagan@thenational.ae

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