Middle East IT spending hit by low oil prices & economic factors

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Gartner Says Middle East and Africa IT Infrastructure Spending Will Reach $3.4 Billion in 2015

Data center

Analysts Will Examine Key Trends in Infrastructure and Operations at Gartner Symposium/ITxpo 2015 May 19-21, Dubai 

IT infrastructure spending in the Middle East and Africa is forecast to reach $3.48 billion, a 0.9 percent increase from 2014, according to Gartner, Inc. IT infrastructure market includes storage, server, and enterprise networking equipment. The server market will continue to lead IT infrastructure spending through 2018 (see Table 1).

“Due to continued low global oil prices, the macro economic situation in Gulf countries is creating increased economic pressure. We expect this to negatively impact IT spending, including infrastructure projects, in 2015, and indeed are already seeing signs of decreased spending in the region,” said Mary Mesaglio, research vice president at Gartner.

CIOs will continue to focus on digital transformation with an eye on cost optimization. Cloud, infrastructure and data center, and business intelligence/analytics appear as the Top 3 CIO priorities in Gulf Countries, and these technologies, along with mobility, are emerging as the core foundational technologies for creating digital business in this region.

Table 1: Middle East and African IT Infrastructure Revenue by Technology (US Millions of Dollars)

Market20142015201620172018
Storage612633657684713
Server1,3831,3231,3541,4331,449
Enterprise LAN886931923914889
Enterprise WAN574600633667703
Total3,4553,4873,5683,6983,754

Source: Gartner (April 2015)

“Cloud is one of the key drivers for IT infrastructure spend by enterprises and governments while they are creating on premise infrastructure to drive agility and performance,” said Naveen Mishra, research director at Gartner. “Consolidation is another driver for data center initiatives in this region.”

As enterprises and governments invest in mobility, they are increasingly concerned regarding data privacy, security and associated risk. CIOs and infrastructure leaders have a challenging task of supporting these organizational initiatives while protecting corporate and citizen data in 2015 and beyond. These concerns are further creating barriers to adoption of public cloud in the region.

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