Enterprise IT spending in the META region to top $40bn in 2022: IDC

According to the latest predictions presented by International Data Corporation (IDC), overall spending on information and communications technology across the Middle East, Turkey and Africa (META) will top $229bn this year, an increase of 2.7 per cent over 2021, as the market continues to rebound from the turbulence of the last two years.

Sharing its regional forecasts for the year at the recent virtual edition of IDC Directions Middle East, Turkey & Africa, IDC revealed that it expects telecommunications spending to increase 3.2 per cent year-on-year (YoY) to $137bn, with IT spending set to grow 2 per cent YoY to reach $92bn.

IDC expects enterprise IT spending to see strong YoY growth of 7 per cent this year to cross the $40.2bn mark, with spending on digital transformation initiatives in the post-pandemic period forecasted to grow as a share of enterprise IT spending from 26 per cent in 2020 to 38 per cent in 2024.

“ICT spending across the META region has been largely resilient and mostly running counter to the economic situation throughout the pandemic,” said Jyoti Lalchandani, IDC’s group vice president and managing director for the META region. “The need for contactless services, the accelerated digitalisation of operations, and the rise of digital business models have all contributed to this resilience. Organisations across the region have significantly accelerated their digital road maps as a result of the pandemic, some by two years or more, and many have shifted to a digital-first strategy, aggressively leveraging technologies such as cloud, AI, digital infrastructure, IoT and security, among others.

“Organisations are now realising the benefits and impact of this digital acceleration. Indeed, our research shows that nearly 60 per cent of medium-sized to large organisations in the META region have seen an increase in cost efficiencies through digitalisation, while 47 per cent have introduced new digitally augmented products and services and 46 per cent have realised increased value from their data through new insights and enhanced decision making – in some cases, generating new revenue streams. The impact of accelerated digital transformation is here to stay.”

According to @IDC , Enterprise IT Spending in the Middle East, Turkey & Africa to Top $40 Billion in 2022 as Digital-First Strategies Become Pervasive.

Read the press release: https://t.co/lpacIGvzwE#IDCDIRECTIONSMETA pic.twitter.com/fjoifA1Ee2

— IDC | MEA (@IDCMEA) February 3, 2022

IDC’s predictions for 2022 also show that spending on security (hardware, software and services) will grow 7 per cent to top $3.76bn. Spending on public cloud services will grow by 27.3 per cent to surpass $6.8bn. Software as a service (SaaS) apps will account for 41 per cent of public cloud software spending, followed by infrastructure as a service at 29 per cent, systems infrastructure SaaS at 18 per cent, and platform as a service at 12 per cent.

The spend on artificial intelligence will grow by 24.7 per cent to total $1.2bn, as will investment in robotic process automation software, which will grow by 47.5 per cent to cross $159m. Spending on big data analytics will grow at 8.1 per cent to reach $3bn.

IDC’s global president, Crawford Del Prete, revealed that one in two companies worldwide will generate more than 40 per cent of their revenues from digital products and services by 2023. He also added that many organisations will struggle to navigate an increasingly digital-first world.

Del Prete said: “A recent global IDC study shows that 79 per cent of organisations worldwide have shifted to a digital-first strategy as a result of the pandemic, but many organisations are struggling, with 50 per cent still trying to figure out exactly what it means for them or only now just starting to execute.

“Over 75 per cent of digital-first afficionados are driving innovation processes based on software and leveraging customer-engagement processes designed with privacy and data management and analysis technologies at their core. At the same time, over 70 per cent of them are designing their physical facilities with a wireless-first approach and introducing new operations processes based on remote-first designs, thereby enabling the remote monitoring, diagnosis and management of assets and processes.”

Steven Frantzen, IDC’s senior vice president and managing director for the EMEA region, said at the event, “Digital is now a permanent, yet dynamic fixture in our world. Entire industries want to intelligently leverage data to their advantage and can do so because they have faster access to digital technologies. But ‘digital first’ isn’t about picking/prioritising a particular technology or business model — it’s an organisational aspiration and a desired business cultural characteristic that should apply across customer engagement, hybrid work, unified security, remote operations and shared business value.”