IT spending across the META will make a welcome return to growth this year, increasing 2.8 per cent to $77.5 billion.
Businesses have increased IT budgets for the current year as Covid-19 accelerates digital transformation paving growth in IT spending. The latest report from IDC indicates that after contracting 4.9 percent in 2020, IT spending across the Middle East, Turkey, and Africa (META) will make a welcome return to growth this year, increasing 2.8 percent to $77.5 billion.
The International Data Corporation (IDC) gathered more than 1,000 senior executives from the region’s most influential technology vendors, telecommunications operators, and IT service providers online recently at the first-ever virtual edition of IDC Directions Middle East, Turkey, and Africa.
The annual event is a firm fixture on the ICT industry calendar and this year focused on the theme of ‘Resetting for the Next to Normal: Strategies for Enabling the Future Digital Enterprise’.
Jyoti Lalchandani, group vice president and regional managing director, IDC, explained that spending on digital transformation (DX) is set to gather even more pace in the post-pandemic period, increasing from 25 percent of total IT spending in 2020 to 37 percent in 2024.
“The Covid-19 pandemic and subsequent economic fallout have accelerated digital transformation across the region, spurring unprecedented demand for contactless services, cloud solutions, and collaboration applications,” said Lalchandani. “Most economists predict a return to economic growth this year as vaccines become more widely available, and we expect that by 2022, 70 percent of organizations worldwide will have increased their use of digital technologies, transforming existing business processes to drive new levels of customer engagement, employee productivity, and business resiliency.”
IDC expects 65 percent of the world’s GDP to be digitalised by 2022, with direct DX investments totaling $6.8 trillion globally between 2020 and 2023.
Srinivas Reddy, vice-president and region head – UAE & Oman, Tech Mahindra, said: “With Covid, things have got accelerated and we are seeing tremendous traction and improvement from customers across the sectors whether its banking and financial services, government, trading, and manufacturing organisation.”
Digital transformation strategies play a key role in economic diversification transformational efforts which is the prime focus for the Gulf governments. “IT spending will see a boost in 2021, especially after the Covid-19 pandemic. Businesses are inclined toward digital transformation more than ever as they now understand that building and running a business with an online presence and the right technology is crucial. Companies are spending much more on automated and digital solutions to increase productivity, engage with clients, and increase sales. The UAE government launched a blockchain strategy in 2021 to transform 50 percent of government transactions into a blockchain platform in 2021. This shows how serious the UAE is towards the digital transformation,” said Amit Gupta, chief executive officer, WebVizion Global.
“The UAE Vision 2021 aims to transition the country into a technology/knowledge-based economy which in turn promotes innovation, investing in research which results in overall development. International businesses are also looking at the UAE as the new digital hub and investing to grow their arms with this rising tide of technology,” added Gupta.
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