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$40bn IT spend in Saudi forecast

January, 2016

Digital transformation initiatives adopted by organisations across Saudi Arabia to optimise costs and improve business process efficiencies will drive ICT spending in the kingdom to reach $35.9 billion in 2016, a report said.

 IT security is also becoming a key component of digital transformation strategies in Saudi Arabia, the Arab News report said, citing a study by IDC, a premier global provider of market intelligence.

A growing number of organisations are looking to implement various advanced and predictive IT security solutions such as multifactor authentication and access management, real-time policy enforcement, and analytics-based monitoring, the report said.

According to IDC, spending on IT security software in Saudi Arabia will grow 12 per cent year on year in 2016 to total $96 million, with the escalating cyber threats and the proliferation of third platform technologies fueling concerns around data privacy.

“The Saudi ICT market is highly competitive, and only the most progressive service providers with strong capabilities around emerging technologies will continue to grow,” Abdulaziz Al-Helayyil, IDC’s regional director for Saudi Arabia, Kuwait, and Bahrain, was quoted as saying in the report.

“In a bid to optimise their costs and increase their levels of operational efficiency, organisations are increasingly investing in transformative business initiatives, using technology to support this transition,” he said.

“While 3rd Platform technologies such as mobility, cloud, Big Data analytics, and social business are finding increasing traction in Saudi Arabia, macroeconomic factors such as low oil prices and regional instability are expected to slow the strong growth rates that the kingdom’s ICT market has become accustomed to over the last few years. As such, we have adjusted our ICT market forecast for 2016 down from $36.7 billion to $35.9 billion, which represents a more modest-than-usual growth rate of 3.8 per cent year on year,” he added.

IDC pointed out that more than a third of Saudi organisations have already invested in cloud services.

The public cloud market in Saudi Arabia will grow 44.5 per cent year on year in 2016 to total $63 million.

“Skills shortages and the growing complexity of operating and maintaining IT infrastructure are both encouraging business leaders to consider remotely delivered services such as cloud as a viable cost-effective alternative,” said Hamza Naqshbandi, senior research manager for IT services at IDC Middle East, Africa, and Turkey.

“The improved availability of commercial datacentre space – led mainly by telecom operators — has been encouraging the consumption of cloud services; however, IT security concerns and the changing threat landscape have considerably hampered what could have been an era of rapid growth for cloud services,” Naqshbandi said.




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