Overall spending on information and communications technology (ICT) across the Middle East, Türkiye, and Africa (META) will top $233.8bn this year, an increase of 3.9 percent over 2022 according to the latest predictions by International Data Corporation (IDC), a premier global provider of market intelligence and advisory services.
Over 400 senior executives from the region’s most influential technology vendors, telecommunications operators, and IT service providers gathered recently at The Ritz-Carlton, Dubai International Financial Centre for the 2023 edition of IDC Directions Middle East, Türkiye, and Africa.
Announcing its regional forecasts for the year ahead, IDC revealed that it expects telecommunications services spending to increase 3.6 percent year on year (YoY) in 2023 to reach $133.9bn, with IT spending set to grow 4.3 percent YoY to $99.9bn.
As the region’s digital economy increasingly takes shape, IDC forecasts that digital transformation spending in the META region will top $48.8bn in 2023 and accelerate at a compound annual growth rate (CAGR) of 16 percent over the coming years to cross the $74bn mark in 2026.
“The region will continue to face several headwinds throughout 2023, including volatile demand, high inflation, interest rate hikes, supply chain uncertainties, and currency fluctuations,” said Jyoti Lalchandani, IDC’s Group Vice President and Regional Managing Director for the META region.
He noted to navigate these storms of disruption, organizations will need to invest in strengthening their digital resiliency so they are better positioned to succeed in new market environments as conditions continue to change.
“Regardless of what the economy throws at us over the coming 12 months, the implementation of further digitalization in critical areas such as customer experience, operations, and financial management with a more rapid shift to a ‘digital business’ approach will be key to separating the thrivers from survivors.
To this end, we expect to see digital transformation spending as a share of overall IT spending continue to grow, reaching 43.2 percent in 2026, up from just 29.4 percent in 2021.” Opening proceedings at this year’s edition of IDC Directions Middle East, Türkiye, and Africa with a session titled ‘Navigating the Storms of Disruption in 2023 and Beyond: Technology Market Outlook for the META Region’, Lalchandani explained that the shift toward a ‘digital-first’ approach requires enterprises to transition from traditional infrastructure that is inefficient, inflexible, and difficult to scale, to highly responsive, resilient, and adaptable infrastructure that spans edge, core, and cloud.
He also outlined IDC’s predictions for the META region in 2023. The key highlights include spending on public cloud services to grow at 25.0 percent to surpass $10.4bn in 2023, SaaS apps to account for 43.2 percent of public cloud software spending in 2023, with IaaS constituting 24.5 percent and systems infrastructure SaaS and PaaS making up 18.1 percent and 14.2 percent, respectively, cloud managed services to 16.1 percent to surpass $1bn in 2023 and $1.4bn by 2025,spending on big data analytics will grow 11.4 percent to top $4.1bn in 2023, spending on AI will grow 16.3 percent to reach $7.9bn in 202 and spending on RPA software will grow 34.5 percent to surpass $192.7m in 2023. IDC’s global president, Crawford Del Prete, presented the event’s keynote address, ‘Global Strategies Built to Drive Better Outcomes’, during which he explained that by 2026, 40 percent of total revenue for G2000 organizations will be generated by digital products, services, and experiences. He also pointed out that by 2027, more than one-third of publicly listed companies will be digital-native businesses. This was followed by a session titled ‘Beyond Uncertainty: Preparing for a New Tech World Order’ that was presented by Steven Frantzen, IDC’s senior vice president and regional managing director for the EMEA region.
