IT spending to reach $20bn in 2011

16 February 2011

Region’s IT budgets rise to increase efficiency

IT spending in the Middle East is set to increase by more than 10 per cent during 2011 to almost $20bn, according to research by Internal Data Corporation (IDC). Saudi Arabia, Qatar and UAE will lead the way, accounting for 60 per cent of total spending in the Middle East.

“The environment has changed. There used to be a big focus on IT spending for the development of the economy, but chief information officers (CIOs) are now under different pressures. There has been a resumption of growth focused on IT efficiency, controlling costs and getting business value from IT,” says Steven Frantzen senior vice-president of research at IDC.

Most of the IT budget, about 36 per cent will be spent on systems including infrastructure, 24 per cent will be spend on services, followed by 15 per cent for networking equipment, 12 per cent on packaged software, 10 per cent on peripherals and 2 per cent on storage.

“Public sector investment, stable oil prices and signs of recovery in consumer sentiment will drive this growth,” says Jyoti Lalchandani, IDC’s vice-president and managing director for the Middle East, Africa and Turkey.

The biggest issues facing CIOs in the region are skills shortages and staffing and overall security.  

As the use of smart phones and mobile devices increase in the workplace, close to 87 per cent of firms in the region are embarking on virtualisation, to enable employees to access company data across all platforms.

“Virtualisation is the first stage and stepping stone into cloud computing,” says Khaldoun Abdoul-Saoud, regional manager for markets development at US technology firm Intel.

“The full picture of cloud computing is still not ready, in terms of infrastructure, rules, regulations, data protection and open standards, but there is increasing acceptance,” says Abdoul-Saoud.

Privacy and data laws in the Middle East vary widely across the region, adding to the uncertainty and hesitancy in adopting cloud computing. “It is very complicated, each country is playing it by their own rules. Once the US and EU establish clear federal laws regarding data, there will be a basis for the Middle East to follow,” says Abdoul-Saoud.

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