The UAE IT services market posted strong year-on-year growth in 2014, and the same is expected over the course of the next five years, according to the latest figures released today by International Data Corporation (IDC).
The global research and consulting firm’s recently published ‘United Arab Emirates IT Services Market 2015–2019 Forecast and 2014 Analysis’ suggests the market will be spurred by greater investments from organisations operating in the government, healthcare, retail, transport, and banking and financial services sectors of the economy.
The UAE IT services market posted double-digit annual growth in 2014 to reach a value of $1,964.3 million, driven by the initiation of multiple mega national infrastructure and utilities projects. Increased investments in data centres, enterprise applications, disaster recovery sites, infrastructure consolidation, and refreshes of existing infrastructure meant that project-based services made up the largest macro-market in 2014, while support and installation and outsourcing services also experienced strong growth.
New projects across various sectors helped systems integration services and networking consulting and integration services post impressive growth, while cost pressures, a lack of skilled resources, and the quest for IT innovation and agility helped drive increased adoption of managed and datacenter services.
“Megaprojects around smart cities, national infrastructure, and utilities are expected to boost the long-term growth momentum of the UAE IT services market,” says Saurabh Verma, research manager for IT services at IDC Middle East, Africa, and Turkey.
“Skills shortages and the drive to create capacity for IT innovation have spurred the adoption of outsourcing services, which will gain increased traction in the coming years. Although there are no clear indicators to ascertain the impact of falling oil prices, the possibility of budget cuts cannot be ignored. In such an event, the outsourcing services opportunity will only increase, but the traditional systems integration and support and installation services business may take a hit.”
The adoption of 3rd Platform technologies (i.e., Big Data and analytics, enterprise mobility, social platforms, and cloud computing) has also seen increased interest across industries. However, the interest and adoption levels have varied. Certain industries have and will continue to run proof of concepts on Big Data, while others will continue testing private cloud and business intelligence implementations.
Enterprise mobility, in particular, will garner greater adoption in industries such as retail, manufacturing, telecom, and government. While public and private cloud services will attract higher customer interest and adoption levels over the coming years, customers in certain industries may remain concerned about data locality issues.
The IDC study ‘United Arab Emirates IT Services Market 2015–2019 Forecast and 2014 Analysis” presents an assessment of the IT services market for the UAE in 2014, as well as a forecast for the period 2015–2019. It contains market sizing, summarises the major impacts indicated by IDC’s qualitative and quantitative surveys of end users conducted in Q2 2015, and presents forecasts for various market categories for the next five years.
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