IT spending in the Middle East and North Africa (MENA) region is set to increase by 5.2 per cent in 2024, totaling $193.7 billion, according to a recent study by Gartner, Inc. This growth is lower than the 6.6 per cent seen in 2023, and despite overall growth, spending on data center systems is expected to decline by 0.3 per cent. This is due to challenges faced by organizations in the region, including economic risks, geopolitical tensions, and supply chain disruptions. As a result, organizations are becoming more cautious with their IT expenditures.
The decline in data center spending can be attributed to a decrease in regional spending on external controller-based (ECB) storage, leading to increased demand for alternative options such as software-defined storage (SDS) and hyperconverged infrastructure software. On the other hand, MENA IT services spending is expected to increase by 9.6 per cent in 2024, with a focus on professional and consulting services to prepare for cloud migration, AI, generative AI (GenAI), and IoT implementations. Security and XaaS (Anything as a Service) consumption models are also driving growth in this segment.
Devices spending in the MENA region is forecasted to decline by 4.5 per cent in 2024 due to varying demand for newer devices like mobile phones across different countries. CIOs in the region are expected to increase their spending on cloud services, with a focus on lower cost everyday use cases rather than costly game-changing AI initiatives. Global hyperscalers are also investing in in-country data centers to provide infrastructure for storage and computing facilities for AI and GenAI, with some launching sovereign cloud services tailored to specific Gulf Cooperation Council (GCC) markets.
In conclusion, the MENA region is expected to see continued growth in IT spending, with a focus on cloud services, AI, and IoT implementations. Despite challenges in the region, organizations are investing in IT services to prepare for the future and take advantage of data monetization opportunities. By prioritizing security, XaaS consumption models, and professional services, organizations in the MENA region are driving growth in the IT services segment and preparing for the technological advancements of tomorrow.
