Mena IT spending to surge 4.5% to $171b in 2021

IT spending in the Middle East and North Africa is projected to surge 4.5 per cent year-on-year to $171 billion in 2021 as worldwide it would jump 8.4 per cent to $4.1 trillion. According to the latest forecast by Gartner, IT projects were either put on hold or cancelled in Mena because of Covid-19.

“In 2021, 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,” said John David Lovelock, research vice president at Gartner.

Over the next two years, IT spending in the region will even surpass pre-pandemic levels. “Different economies have reacted differently to the pandemic. Rapid digitalisation of Mena, especially the Gulf countries, began before the pandemic. While 2020 slowed the growth of IT in the region, the ‘K-shaped’ recovery has begun faster in this region, as compared to Asia and Latin America,” said Lovelock.

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, he said.

Gartner research shows that worldwide all IT spending segments are forecast to have positive growth through 2022. The highest growth will come from devices (14 per cent) and enterprise software (10.8 per cent) as organisations shift their focus to providing a more comfortable, innovative and productive environment for their workforce.

“Recovery across countries, vertical industries and IT segments still varies significantly, prompting a K-shaped economic recovery. From an industry perspective, banking and securities and insurance spending will closely resemble pre-pandemic levels as early as 2021, while retail and transportation won’t see the same recovery until closer to 2023,” Gartner report said.

In 2020, IT spending in Mena grew 2.7 per cent, as compared to 2019. Most of the segments experienced flat growth, except for communications services which grew 7.2 per cent last year. This year, enterprise software will experience the highest growth at 14.5 per cent. The increase in the number of remote workers will be the catalyst to this growth. Growth will also return to segments such as data center systems and devices over the next two years.

According to Gartner, CIOs in the region will increase their spending on servers, applications and infrastructure software in 2021, to support the rapid digitalisation efforts. Additionally, the increase in remote workforce will increase spending on mobile devices and remote working technologies such as desktop-as-a service.

— issacjohn@khaleejtimes.com