Kingdom’s ICT spending to exceed $35 billion in 2016

ICT spending in Saudi Arabia will reach $35.9 billion in 2016 as organizations across the Kingdom have started to embrace digital transformation initiatives in an effort to optimize costs and improve their business process efficiencies.

“The Saudi ICT market is highly competitive, and only the most progressive service providers with strong capabilities around emerging technologies will continue to grow,” says Abdulaziz Al-Helayyil, IDC’s regional director for Saudi Arabia, Kuwait, and Bahrain.
“In a bid to optimize their costs and increase their levels of operational efficiency, organizations 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% year on year,” he added.
IDC explained that IT security is becoming a key component of digital transformation strategies in Saudi Arabia, with a growing number of organizations 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.
IDC predicts that spending on IT security software in Saudi Arabia will grow 12 percent year on year in 2016 to total $96 million, with the evolving cyberthreat landscape and the proliferation of 3rd Platform technologies fueling concerns around data privacy and driving demand for security services.
Cloud services are also playing a vital role in Saudi Arabia’s digital transformation journey, with IDC explaining that more than a third of Saudi organizations have already invested in cloud services.
According to IDC’s FutureScape Predictions, the public cloud market in Saudi Arabia will grow 44.5 percent year on year in 2016 to total $63 million as an increasing number of end-user organizations migrate non-core workloads such as productivity and team collaboration, sales and marketing, and human capital management to the cloud.
“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,” Hamza Naqshbandi, senior research manager for IT services at IDC Middle East, Africa, and Turkey.
“The improved availability of commercial datacenter 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.
“As the largest IT market in the region, and still relatively unsaturated when it comes to cloud services, Saudi Arabia represents a considerable revenue opportunity for local, regional, and global service providers, as a growing number of end users will turn to cloud services to optimize their IT operations, both from a cost and efficiency perspective,” said the manager said.
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