Spending on IT in the Middle East and Africa – headed by the three core manufacturing countries of Saudi Arabia, South Africa and Turkey – is set to grow by 40% over the next five years according to the International Data Corporation’s (IDC) Manufacturing Insights.
The growth will be highest in 2015, during which IDC anticipates 8% year on year growth, with a solid compound annual growth rate (CAGR) of 6.8% forecast for the 2013-2018 period.
Lower IT spending growth in the hardware segment will meanwhile be offset by accelerated growth in IT services and software, which will expand at a rate (CAGR) of 9.3% for the period.
“These three MEA countries continue to exhibit mostly positive trends in their manufacturing sectors,” says Martin Kuban, lead analyst at IDC Manufacturing Insights.
“A steady flow of IT spending will be delivered by a core group of large process-oriented manufacturing industries. However, the market to watch will be the range of smaller and younger sub-industries in pursuit of progressive manufacturing and IT strategies.”
Spend to defend
IT spending in Saudi Arabia in particular will be driven by malware threats, after the Kingdom, together with the UAE, posted the highest levels of malware detections in the Middle East over the past year, while the number of global malware types grew from 2 to 3 million in the first half of 2014.
For the top 10 malware detections alone in each country, the Kingdom counted 11.01 million instances, and the UAE counted 10.26 million instances, from June 2013 to May 2014, according to statistics gathered from Trend Micro’s Smart Protection Network Feedback.
The trend is being led by Bring Your Own Device (BYOD) policies in the workplace, which by 2017 will see half of employers worldwide requiring employees to supply their own devices.
“Enterprises across the Kingdom of Saudi Arabia and the UAE are pacing the Middle East in embracing BYOD for productivity and flexibility, but Middle East enterprises cite security as their number one concern,” said IhabMoawad, the regional vice president for Trend Micro.
Dubai is anticipating particularly bullish growth in its computer product market, which looks set to expand at a rate of 8.47% (CAGR) through to 2018, according to a Dubai Chamber report based on research by Business Monitor International and Euromonitor International.
According to the note, the UAE IT market was estimated at around $4.23bn in 2013, 52% made up by hardware sales, followed by IT services with 30% and software with 18%.
On the WEF’s Network Readiness Index 2014, the UAE ranks 4th out of 148 countries in company-level technology absorption and 85% of households have a personal computer.
Separately, South Africa also posted the largest year-on-year handset shipment growth at 32% respectively, as the Middle East and Africa handset market grew to its largest size in ten quarters in the second quarter of 2014, expanding 27% year on year to 64 million units.