The amount spent on information technology in the Middle East and North Africa is set to grow 4.5 percent annually and reach $171.3 billion this year as businesses increasingly digitize amid the pandemic, said research firm Gartner.
Chief information officers in the region will increase their spending on servers, applications and infrastructure software to support digitalization efforts and hybrid work models, it added.
The region will see IT spending return to pre-pandemic levels or even surpass it over the next two years.
“IT projects were either put on hold or cancelled because of Covid-19 … as the situation in the region improves and businesses understand the true value of a resilient digital ecosystem, IT spending will return to a pre-pandemic growth rate,” John Lovelock, research vice president at Gartner, said.
An increase in remote work will be one of the main factors driving the growth in IT investment, Gartner said. Companies are set to increase their spending on mobile devices and remote working technologies such as desktop-as-a-service software.
The communications services industry will see the largest IT outlay among five sectors highlighted, totaling $116.8bn, according to the report. The remaining $54.5bn-plus will go towards upgrading data centers, devices, enterprise software and IT services.
The enterprise software will experience the highest annual growth at 14.5 per cent year. Other sectors will register only single-digit growth, ranging between 2.5 per cent and 8.7 per cent.
“In the first quarter of 2021, projects such as ‘remote work visas’, ‘Smart Dubai 2021’ and other economic policy regulations were launched … these are expected to boost technology investments in the region,” Lovelock said.
“Different economies have reacted differently to the pandemic … while 2020 slowed the growth of IT in the region, the K-shaped recovery has begun faster in this region, compared to Asia and Latin America,” he added.
Last year, IT spending in the region grew 2.7 per cent on an annualized basis. Most of the segments experienced flat growth, except for communications services, which grew 7.2 per cent, said Gartner.