03 Feb 2022

Enterprise IT Spending in the Middle East, Turkey & Africa to Top $40 Billion in 2022 as Digital-First Strategies Become Pervasive

Dubai – Overall spending on information and communications technology (ICT) across the Middle East, Turkey, and Africa (META) will top $229 billion this year, an increase of 2.7% over 2021 as the market continues to rebound from the turbulence of the last two years. That's according to the latest predictions presented by International Data Corporation (IDC) as more than 420 senior executives from the region's most influential technology vendors, telecommunications operators, and IT service providers gathered online this week for the latest virtual installment of IDC Directions Middle East, Turkey & Africa.

Announcing its regional forecasts for the year ahead, IDC revealed that it expects telecommunications spending to increase 3.2% year on year (YoY) to $137 billion, with IT spending set to grow 2% YoY to reach $92 billion. Intriguingly, IDC expects enterprise IT spending to see strong YoY growth of 7% in 2022 to cross the $40.2 billion mark – and spending on digital transformation (DX) initiatives in the post-pandemic period is forecast to grow as a share of enterprise IT spending from 26% in 2020 to 38% in 2024.

"ICT spending across the META region has been largely resilient and mostly running counter to the economic situation throughout the pandemic," says Jyoti Lalchandani, IDC's group vice president and managing director for the META region. "The need for contactless services, the accelerated digitalization of operations, and the rise of digital business models have all contributed to this resilience. Organizations across the region have significantly accelerated their digital road maps as a result of the pandemic, some by two years or more, and many have shifted to a digital-first strategy, aggressively leveraging technologies such as cloud, AI, digital infrastructure, IoT, and security, among others.

"Organizations are now realizing the benefits and impact of this digital acceleration. Indeed, our research shows that nearly 60% of medium-sized to large organizations in the META region have seen an increase in cost efficiencies through digitalization, while 47% have introduced new digitally augmented products and services and 46% have realized increased value from their data through new insights and enhanced decision making – in some cases, generating new revenue streams. The impact of accelerated digital transformation is here to stay!"

Opening proceedings at this year's virtual edition of IDC Directions Middle East, Turkey & Africa with a session titled 'Unlocking Opportunities in the Digital-First World: META Regional Outlook', Lalchandani outlined IDC's predictions for 2022. The key highlights included:

• Spending on security (hardware, software, and services) will grow 7% to top $3.76 billion

• Spending on public cloud services will grow 27.3% to surpass $6.8 billion

• SaaS apps will account for 41% of public cloud software spending, followed by IaaS at 29%, systems infrastructure SaaS at 18%, and PaaS at 12%

• Spending on AI will grow 24.7% to total $1.2 billion

• Spending on RPA software will grow 47.5% to cross $159 million

• Spending on Big Data analytics will grow at 8.1% to reach $3 billion

IDC's global president, Crawford Del Prete, presented the event's keynote address, during which he revealed that one in two companies worldwide will generate more than 40% of their revenues from digital products and services by 2023. But he warned that many organizations will struggle to navigate an increasingly digital-first world and served up some essential guidance on strategies for success.

"A recent global IDC study shows that 79% of organizations worldwide have shifted to a digital-first strategy as a result of the pandemic," said Del Prete. "But many organizations are struggling, with 50% still trying to figure out exactly what it means for them or only now just starting to execute. For those organizations looking to embed digital into everything they do as an IT buyer, our survey revealed some interesting insights from those that are already succeeding in this quest.

"Over 75% of these digital-first afficionados are driving innovation processes based on software and leveraging customer-engagement processes designed with privacy and data management and analysis technologies at their core. At the same time, over 70% of them are designing their physical facilities with a wireless-first approach and introducing new operations processes based on remote-first designs, thereby enabling the remote monitoring, diagnosis, and management of assets and processes."

Steven Frantzen, IDC's senior vice president and managing director for the EMEA region, expanded on this guidance in his session, urging organizations to change their mindset and prioritize outcomes in their IT investments by leveraging trusted industry ecosystems, generating profitable revenue growth from empathetic customer experiences, and demonstrating an ability to adapt operating models to complex customer requirements.

"Digital is now a permanent, yet dynamic fixture in our world," said Frantzen. "Entire industries want to intelligently leverage data to their advantage and can do so because they have faster access to digital technologies. But 'digital first' isn't about picking/prioritizing a particular technology or business model — it's an organizational aspiration and a desired business cultural characteristic that should apply across customer engagement, hybrid work, unified security, remote operations, and shared business value."

IDC Directions Middle East, Turkey & Africa takes place annually and is a firm fixture on the ICT industry calendar, providing an unrivaled platform for exchanging ideas and engaging with IDC's most prominent local and global analysts. As well as the three main discussions outlined above, the agenda incorporated a series of track sessions that enabled delegates to deep dive into the individual markets that top their agenda for the year ahead. These dedicated sessions outlined trends and forecasts for key countries/sub-regions and explored the latest developments in critical technologies such as cloud, security, artificial intelligence, RPA, and IoT.

To learn more about the event, please contact Sheila Manek at smanek@idc.com  or on +971 4 446 3154. You can also join the conversation on Twitter using the hashtag #IDCDirectionsMETA.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,200 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

IDC in the Middle East, Turkey, and Africa

For the Middle East, Turkey, and Africa region, IDC retains a coordinated network of offices in Riyadh, Nairobi, Lagos, Johannesburg, Cairo, and Istanbul, with a regional center in Dubai. Our coverage couples local insights with international perspectives to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 130 analysts, consultants, and conference associates across the region. To learn more about IDC MEA, please visit www.idc.com/mea. You can follow IDC MEA on Twitter at @IDCMEA.

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