MENA IT spending to increase 3.1% in 2023, predicts Gartner

According to Gartner, Inc., IT spending in the Middle East and North Africa region is expected to reach $178.1 billion in 2023, up 3.1% from 2022.

According to the most recent Gartner, Inc. forecast, global IT spending will total $4.6 trillion in 2023, a 5.1% increase from 2022. Demand for IT is expected to be high in 2023 as businesses push forward with digital business initiatives in response to economic uncertainty.

“Enterprise IT spending will be robust as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said Miriam Burt, Managing VP Analyst at Gartner. “Economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others, but it is not projected to materially impact the overall level of enterprise technology spending.

“However, inflation has cut into consumer purchasing power in almost every country around the world. Consumer purchasing power has been reduced to the point that many consumers are now deferring 2022 device purchases until 2023, driving spending on devices down 8.4% in 2022 and 0.6% in 2023.”

The projected growth rates in 2023 reveal the technologies that are being maintained versus those that are driving the business. There is enough spending in data center markets to keep existing on-premises data centers operational, but new spending is shifting to cloud options, as evidenced by the 11.3% projected growth in software spending in 2023.

Worldwide IT Spending Forecast (Millions of U.S. Dollars) 

Source: Gartner (December 2022)

In 2023, all segments in MENA will grow. In 2023, the software segment is expected to grow the most in MENA (see table 2). MENA CIOs will follow their global peers’ spending trends by being cautious about spending while continuing to invest in technology for future resilience and risk reduction.

MENA IT Spending Forecast (Millions of U.S. Dollars) 

Organizations Continue to Protect Efficiency-Driven Digital Investments

In a down or declining economy, conventional wisdom suggests cutting costs, including IT costs. However, according to a July 2022 Gartner survey of more than 200 CFOs, 69% plan to increase their spend on digital technologies, while CIOs are being tasked with accelerating time to value on digital investments, according to the 2023 Gartner CIO and Technology Executive Survey.

“Companies will use digital technology primarily to reshape their revenue stream, adding new products and services, changing the cash flow of existing products and services, as well as changing the value proposition of existing products and services,” said Burt. “This trend has fed the shift from buying technology to building, composing and assembling technology to meet specific business drivers with agility. This shift is foundational to the growth of cloud over on-premises for new IT spending. 

“However, as organizations look to also realize operations efficiency, cost reductions and/or cost avoidance during the current economic uncertainty, more traditional back-office and operational needs of departments outside IT are being added to the digital transformation project list.”

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

Gartner’s quarterly IT spending forecast provides a unique perspective on IT spending across hardware, software, IT services, and telecommunications. These reports assist Gartner customers in understanding market opportunities and challenges. Gartner clients can access the most recent IT spending forecast research in “Gartner Market Databook, 3Q22 Update.”