In 2016, buyers and purchasing decision makers worldwide will spend a total of $3.49 trillion on IT, according to figures provided by Gartner, Inc. This is no surprise: innovative, functional IT is in demand around the world, and is shaping the future of a variety of other sectors, from education to infrastructure to healthcare.
It has also become an essential tool for businesses looking to sharpen their edge over the competition. In the words of John-David Lovelock, Research Vice President at Gartner, “the need to invest in IT to support digital business is more urgent than ever. Business leaders know that they need to become digital businesses or face irrelevance in a digital world”.
However, the significant predicted IT spending in 2016 does not represent an increase over last year’s figures. In fact, it represents a decrease of 0.5% in average global IT spending.
This decrease does not apply across the board, with wild variances depending on subsector and region. IT spending growth figures vary significantly by subsector, with the global enterprise software market expected to see a 4.2% rise to $321 billion this year. Meanwhile, spending on IT services will be up by a more modest but still significant 2.1% this year, to $929 billion.
It will also vary by region. The Middle East is predicted to see healthy growth in its IT sector for years to come. Gartner predicts that IT spending in the region will reach $212.9 billion this year, representing a 3.7% increase over 2015. Regional device sales will be worth a whopping $48.1 billion within only two years, up from last year’s $37.1 billion total. Over the same time period, Middle Eastern businesses and individuals will spend $164.4 billion on communication services.
“We see positive IT growth and scenarios in the Middle East despite some level of economic uncertainty in world markets,” said Peter Sondergaard, Senior Vice President and Global Head of Research at Gartner. “The substantial industrial refocusing to generate new economic development beyond the oil industry, with deepening smart cities initiatives and adoption of the Internet of Things (IoT), is of utmost importance in this region.”
Due to geopolitical tension and the rapid growth of smart services within the banking and finance industries, cyber security is also taking on increasing importance in the Middle East. The regional cyber security market is expected to grow at a compound annual growth rate of 22.5% between 2016 and 2022.
The GCC cyber security market is likely to see a sharp uptick in growth following recent security breaches at large regional banks and financial institutions. Several companies are poised to become regional market leaders in cyber security, including Fortinet.
Solution providers worldwide are looking to take advantage of this forecasted rise in Middle Eastern IT spending by establishing or expanding a presence in one of the region’s many high-growth markets. Providers are focusing particularly on the GCC region – Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman – due to the region’s reputation for high levels of wealth and liquidity.
However, accessing the GCC market is easier said than done. As in any market, companies who attempt market access in the GCC using only their internal resources often fail to successfully establish a presence. Targeting Gulf consumers requires familiarity with local customs, prevailing trends and buying patterns. When combined with connections and resources provided by a knowledgeable facilitator, successful market access is all but guaranteed.
Naseba is a business facilitation company that has spent over a decade building and leveraging a network of contacts with solution providers and buyers around the world, in a variety of industries – including IT. We have helped these providers and buyers meet and do business. Past IT clients and partners who have benefited from Naseba’s platforms and services include Cyberia, Qualys and Spire Solutions.
To learn more about Naseba’s upcoming platforms or market access services, contact:
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