May 30, 2023
IT and business services spending in Middle East and Africa to reach $30.3 billion (€28.26 billion) in 2023, says IDC.
Dubai – According to the latest report from International Data Corporation (IDC), spending on IT and business services in the Middle East and Africa (MEA), including Israel, is expected to reach $30.3 billion (€28.26 billion) in 2023. This represents a 5.0% increase compared to the $28.9 billion ( €26.96 billion) recorded in 2022. The report also forecasts that the market will experience a compound annual growth rate (CAGR) of 5.9% from 2023 to 2027, reaching $38.1 billion (€35.53 billion) in 2027.
Suraj Godse, a senior research analyst at IDC, expressed optimism about the region’s IT services market, stating, “The MEA IT services market is forecast to continue growing through 2023 despite ongoing macroeconomic challenges and also the possibility of a global recession.” He attributed this projected growth to the stable and strong economies of oil-producing nations in the Gulf, government investments in mega projects and events, and the expansion of in-country cloud services by hyperscalers across the region. However, Godse noted that the forecasted 5.0% growth for 2023 is slower than the previous year.
IDC’s report highlights that managed services and project-oriented services will be the fastest-growing market segments in 2023, followed by support and business services. Looking ahead, IDC predicts that spending on managed services in the MEA region will grow at a CAGR of 7.6% from 2023 to 2027, while project-oriented services will see a slower CAGR of 5.7%.
Godse emphasised the challenges faced by the IT industry, including increased costs due to inflation, disruptions in the IT supply chain, and a shortage of skilled labour. He added, “The anticipation of a potential recession has also led to increased pressure on CIOs to reduce IT expenses; as a result, they are increasingly looking for more cost-effective opex-based IT solutions.”
Cloud-related services continue to drive growth in IT services revenue as organizations accelerate their cloud journeys by migrating mission-critical applications to the cloud. The recent launch of in-country cloud services by cloud hyperscalers in the MEA region has enabled organisations to expand their cloud usage through a hybrid multicloud approach, resulting in additional cost savings.
IDC’s Worldwide Semi-annual Services Tracker provides comprehensive information on the global IT and business services markets. It offers vendor revenue share and annual forecast data across 53 geographies and 14 market segments. This tracker assists both global and local players in understanding market dynamics and benchmarking their performance. With its cloud and security segmentation add-ons, the tracker provides a holistic view of the past, present, and future of the services industry.
Categories : World Focus