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, Inc.
“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, distinguished research vice-president at Gartner. “In 2019, organizations in MENA disinvested in data center systems, devices and communication services, which led to a decline of 2.8% in the overall IT spending.”
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 (see Table 1).
Table 1: Middle East and North Africa IT Spending Forecast (Billions of U.S. Dollars)
|2019 Spending||2019 Growth (%)||2020 Spending||2020 Growth (%)|
|Data Center Systems||4,743||-3.9||4,793||1.1|
Source: Gartner (March 2020)
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 organizations move to cloud-based products and services.
As local organizations 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).