Businesses in MENA set to increase IT budgets in 2020
While spending will increase across all segments, enterprise software spending will achieve the highest growth, as per Gartner analysts
IT spending in the Middle East and North Africa (MENA) will total $160 billion in 2020, an increase of 2.4% from 2019, according to Gartner. In 2020, businesses in MENA are on pace to increase their IT budgets across all segments with spending on enterprise software expecting to achieve the highest growth.
“Non-oil economic initiatives such as the Dubai Expo 2020 in UAE; the Al Qiddiya entertainment, sports and arts complex; The Red Sea Project and the Neom living laboratory in Saudi Arabia are boosting business activity in MENA, which will heavily influence IT spending locally,” said John-David Lovelock, research vice president at Gartner. “In 2019, organisations in MENA disinvested in data center systems, devices and communication services, which led to a decline of 2.8% in the overall IT spending.”
Spending on devices will achieve growth in 2020, following a double-digit decline in 2019. The currency effects that raised prices on hardware will abate and business spending on devices will grow 3.6% in 2020 locally. Enterprise spending on software continues to grow, achieving double-digit growth in 2020. This trend is expected to continue for the next three years as more organisations move to cloud-based products and services.
As local organisations continue to invest more resources and IT budget in their digital transformation initiatives, technology consulting will increase among local companies. In 2020, IT services spending is expected to total $13.1 billion, an 8.4% increase year over year. Compared to other regions, the levels of spending on IT services in MENA are among the highest four in the world (after Greater China, Emerging Asia/Pacific and Latin America).
More detailed analysis on the outlook for the IT industry is available in the complementary webinar “IT Spending Forecast, 4Q19 Update: Emerging Technologies in 2020.”
Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. The research firm uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.