Pandemic driven digitization to send MENA’s IT spending to $171bn

By Ashika Rajan, Trainee Reporter
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Digitalization
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According to US-based research firm Gartner, spending on information technology (IT) in the Middle East and North Africa (MENA) region is set to grow 4.5 percent annually to $171.3 billion this year as businesses increasingly digitize in the face of the pandemic.

To support digitalization initiatives and hybrid work models, chief information officers in the area will increase their spending on servers, apps, and infrastructure software, the research firm added.

The region will see IT spending return to pre-pandemic levels or even surpass it over the next two years.

Mr. John Lovelock, Research Vice President Gartner, remarked that “IT projects were either put on hold or canceled because of COVID-19 as the situation in the region improves and businesses understand the true value of a resilient digital ecosystem, IT spending will return to a pre-pandemic growth rate.”

One of the key factors driving IT investment growth would be a rise in remote work. Companies are expected to invest more in mobile devices and remote working technologies like desktop-as-a-service software.

As per the reports, the communications services industry will see the highest IT outlay of the five sectors highlighted, totaling $116.8 billion. The remaining $54.5 billion and up will be spent on data centers, devices, enterprise software, and IT services.

Enterprise software will develop at the fastest rate, at 14.5 percent year. Other industries will rise in the single digits, ranging from 2.5 percent to 8.7 percent.

Mr. Lovelock pointed out that “in the first quarter of 2021, projects such as ‘remote work visas’, ‘Smart Dubai 2021’ and other economic policy regulations were launched these are expected to boost technology investments in the region.”

On an annualized basis, IT spending in the region increased by 2.7 percent last year. Most of the segments experienced flat growth, except for communications services, which rose by 7.2 percent.

“Different economies have reacted differently to the pandemic while 2020 slowed the growth of IT in the region, the K-shaped recovery has begun faster in this region, compared to Asia and Latin America,” Mr. Lovelock concluded.

Related: UAE’s Tradeling joins Chinese retailer JD.com to foster eCommerce in MENA


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