More Industry InsightsICT sector in META ‘poised for a strong year’

February 6, 2024by myles0

The information and communications technology (ICT) sector in the Middle East, Türkiye, and Africa (META) is poised for a strong year, with overall spending expected to reach $238 billion in 2024, a 4.5 per cent increase compared to 2023.

This growth is fuelled by rising investments in artificial intelligence (AI), cloud computing, and cybersecurity, according to International Data Corporation (IDC).

More than 400 senior executives from the region’s most influential technology vendors, telecommunications operators, and IT service providers gathered at The Ritz-Carlton, Dubai International Financial Centre for the 2024 edition of IDC Directions Middle East, Türkiye, and Africa, where key insights into the region’s tech landscape were revealed.

Announcing its regional forecasts for the year ahead, IDC said it expects telecommunications services spending to increase 5pc year on year (YoY) in 2024 to $133bn, with IT spending set to grow 3.9pc YoY to $105bn revealed key insights into the region’s tech landscape.

As META’s digital economy increasingly takes shape, IDC forecasts that digital transformation spending in the region will top $59bn in 2024 and accelerate at a compound annual growth rate (CAGR) of 15pc over the coming years to cross the $88bn mark in 2027.

This year’s IDC Directions Middle East, Türkiye, and Africa focused on the theme ‘Preparing Your Customers for an AI Everywhere Future’, with IDC predicting that spending on AI in the region will top $3bn this year, up 32pc on 2023.

Explained that the AI investment priorities of end-user organisations will likely evolve over the coming years as they move beyond their initial focus on reducing costs, IDC’s group vice president and managing director for the META region Jyoti Lalchandani said, “Across the META region, there is a clear appetite for AI in general and generative AI (GenAI) in particular, with spending on AI forecast to reach $6.9 billion by 2027.”

“However, many organisations are already questioning whether they are over-pivoting on cost reduction and not focusing enough on how AI can help them to grow their revenues. We expect revenue growth outcomes to take center stage in the next 3–5 years and providers must track this shift carefully with their core buyers to ensure that their AI-related offerings continue to align with the evolving business goals of their customers.”

Heralding GenAI’s emergence as a golden era of innovation during the event’s keynote address, IDC’s global president Crawford Del Prete said, “We are increasingly seeing companies invest aggressively in GenAI to capture an advantage and ensure they are not left behind. Indeed, by 2027, we expect global spending on GenAI to top $150bn, accounting for around 30pc of all AI-related investments.”

Thomas Meyer, IDC’s group vice president of research for the EMEA region, explained the support mechanisms that tech vendors must put in place for their customers. “As GenAI adoption grows in the META region, tech providers must develop a responsible AI strategy,” said Mr Meyer.

“As part of this strategy, they need to support their customers in unlocking funding for investments and delivering ROI and significant business outcomes for prioritised use cases.”

Another notable prediction revealed during the event was that spending on public cloud in the META region will top $13bn this year, representing year-on-year growth of 21pc.

Software as a service (SaaS) will account 59pc of this public cloud spending, followed by infrastructure as a service (IaaS) at 23pc and platform as a service (PaaS) at 18pc.

Cybersecurity spending has surpassed previous growth projections and is forecast to cross the $6.5bn mark this year, with 77pc of CISOs in the META region expecting their cybersecurity budgets to increase by 10pc or more in 2024.

Source: Zawya

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