By Staff writer
Dubai, Abu Dhabi gov'ts to lead massive increase in IT spending
UAE businesses will spend $4.63bn on IT this year, an increase of 8.3 percent compared to 2013, according to a new report by International Data Corporation.
The surge in spending, which is expected to be maintained through to 2017, will be led by the Dubai and Abu Dhabi governments as they upgrade and build new infrastructure, the report says.
The public sector, which includes government, education, and healthcare organisations, will account for most of the business IT spending in 2014, at $1.12bn, or 24.3 percent of total business IT spending, driven primarily by government-led initiatives to bring more public services to online and mobile platforms.
Government-backed projects to increase the use of ICT in educational institutions, together with regulations in the healthcare sector that mandate a reduction in paper-based processes, are other major factors driving IT spending.
Finance-related businesses, including those in banking, insurance and security service providers, are predicted to invest $719.77m in IT in 2014, with the rapid expansion of branch and ATM networks, investments in online and mobile banking channels, and better regulatory compliance.
Consumer IT spending in the UAE is expected to account for 30.5 percent of total IT spending in 2014, though it will contract 8.4 percent year-on-year. This decrease in spending is a result of the stagnating PC market, which is being cannibalised by the growing demand for tablets.
The strong infrastructure backbone, business-friendly government, and ongoing and planned large-scale investments make the UAE more prepared for growth than other Middle East countries, according to IDC.
IDC expects total IT spending in the UAE to increase at a compound annual growth rate of 6 percent over the five-year forecast period to total $8.06 billion in 2017.
"Robust growth of the UAE's IT market is expected to continue throughout the 2013-2017 forecast period," IDC Middle East senior research analyst Jebin George said.
"IT vendors will find the biggest opportunities in the government sector, as it is the largest and fastest growing market. Communications finance, and oil and gas will continue the other major vertical markets for IT spending, while healthcare, transport, and utilities are growing the fastest."
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