Information technology (IT) spending in the Middle East and North Africa (MENA) is forecast to grow 5.2 percent year-on-year to $193.7 billion in 2024, according to the latest forecast by Gartner, Inc. However, the rate of expansion in 2024 is slower than the 6.6 percent growth in 2023.
“While inflation in the region has eased, organizations in the Middle East continue to face challenges due to ongoing uncertainty caused by oil production cuts, downside economic risks linked to regional geopolitical tensions as well as supply chain disruptions in key shipping routes. As a result, local organizations are becoming more cautious with their IT expenditures,” said Miriam Burt, managing VP analyst at Gartner.
MENA shifts investments away from data center systems
Despite experiencing growth in 2023, Gartner expects spending on data center systems, particularly in external controller-based (ECB) storage, to decline by 0.3 percent in 2024. “This is due to the rise in demand for alternative options such as software-defined storage (SDS), hyper-converged infrastructure software (HCIS), and the ‘storage as a service’ model,” added Burt.
However, MENA IT services spending will likely record a 9.6 percent increase in 2024. “IT leaders in the MENA region are, in the first instance, spending more on professional and consulting services to prepare their businesses for cloud migration, AI, generative AI (GenAI), and IoT implementations,” added Burt. They are also taking advantage of the data monetization opportunities resulting from the convergence of these technologies.
Security also remains a key area for IT services spending in the MENA region. On the other hand, device spending will likely further decline by 4.5 percent in 2024 due to the uneven demand for newer devices.
GenAI will not impact MENA IT spending in 2024
Eyad Tachwali, senior director of advisory at Gartner, expects MENA IT spending to rise on cloud services. Despite generative artificial intelligence (GenAI) having influence over cloud services, it will not directly impact IT spending levels in MENA in 2024. “Regional CIOs’ focus today is primarily on everyday lower-cost use cases, rather than on costly game-changing AI,” added Tachwali.
In addition, global players who offer extensive infrastructure for storage and computing facilities for AI and GenAI are accelerating investments in in-country data centers, particularly world-class green data centers. Some have even launched sovereign cloud services specific to the needs of Gulf Cooperation Council (GCC) markets.
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