Saudi Arabia's IT Market Set for Double-Digit Growth in 2014, Says IDC
Published on: 26th Jan 2014
Note -- this news article is more than a year old.
Overall IT spending in Saudi Arabia is set to increase 10.7% year on year in 2014 to total $11.50 billion according to the latest forecast from IDC. The research firm expects that the consumer communications finance and oil and gas sectors will be the biggest IT spenders during the five year forecast period.
The consumer sector is expected to remain the largest in Saudi Arabia in 2014, with expected IT spend of $4.18 billion, accounting for 36.4% of the kingdom's total IT market. The combined transport, communications, and utilities grouping will be the second-largest vertical market, with such organizations investing $1.95 billion in 2014. This vertical is forecast to grow at a compound annual growth rate (CAGR) of 8.5% over the 2013-2017 period, driven by ongoing and planned infrastructure investments by the government.
The public sector, which includes government, healthcare, and education, will remain the third-biggest vertical in 2014 with $1.78 billion in IT investments, representing 15.5% market share. The major drivers of growth in this sector will be increased social spending on egovernment initiatives with the aim of improving service delivery to residents, as well as the construction of new schools and hospitals and upgrades to existing ones.
The limited availability of skills is the biggest issue businesses in Saudi Arabia face and is an identifiable trend across verticals. As the kingdom's nationalization initiatives gather steam and the government continues to push organizations to comply with Nitaqat regulations, IDC anticipates that the availability of advanced IT skills will become scarcer, which will put more pressure on providers, and may result in project delays as well as increased investments in training.
"Saudi Arabia's IT market is the largest in the Middle East and will remain so throughout the 2013-2017 forecast period," says Mark Walker, Director for Insights and Vertical Industries at IDC Middle East, Africa, and Turkey. "As the government continues to invest in large infrastructure projects, IT vendors will find many opportunities across the market, but primarily in the communications, government, finance, oil and gas, and consumer verticals."
IDC expects IT spending in Saudi Arabia to increase at a CAGR of 8.9% over the five-year forecast period to reach $14.20 billion in 2017. Government will be the fastest growing vertical during this period, with IT investment expanding at a CAGR of 12.9% through 2017. The other two top-performing verticals in terms of growth over the forecast period will be education (12.0%) and oil and gas (11.9%). From a technology perspective, investment growth will be strongest in IT services and software.
Tags: Saudi Arabia