Information Technology has recently become one of the key industries thriving amongst the MENA countries. It is expected that with the year ending soon, the 2024 IT spending cap will have reached close to $200 billion. For a region that has historically stayed away from the tech race, this is indeed unprecedented, and the figures are set to grow even further in 2025.
The MENA IT spending increment rate is currently at 5.2%, and analysts are claiming this will reach a record high of 14% next year. At the forefront of this expansive rise of IT spending is Cloud technology, but not in the traditional idea of the segment.
There is a lot more behind this unprecedented increment, and far lying effects as well.
Alternative Cloud Storage is Defining MENA Tech
The MENA region has been plagued by various turmoils, ranging from geopolitical tensions to cuts in oil production scale. This has made both governments and local organizations cautious about expenditures, IT being a central focus point of the conversation.
But at the same time, there is a growing demand for technology. As tech-based organizations rapidly grow in the region, spending on enterprise network equipment seems to be increasing manyfold. Professional services regarding cloud migration are also high in demand, and these organizations are not just looking at building regular data centres.
While 2023 in MENA was indeed defined by a sharp rise in data centre technology, 2024 is the year of alternative storage infrastructure. Software-defined and hyper-converged storage infrastructure seems to be at the forefront of this movement. Storage-as-a-service has become a popular model in the region as well.
Additionally, security infrastructure has become a mainstay of IT spending. The growth in the software segment has overtaken the device segment, now standing at a whopping $15 billion over the last 12 months. Communication services are also leading the tech expense race and are expected to cross $35 billion by the end of the year.
The Industry is Expanding
Not only are MENA countries hiring alternative solutions, but the governments in these regions are also providing tailor-made solutions in terms of sovereign cloud services manufactured by the GCC (Gulf Cooperation Council). Rather than spending on costly AI models, organizations can tap into ‘green data centres’, benefitting not only their cost margins but also helping the region meet its environmental goals.
On the other hand, these organizations are also able to monetize the data that is being collected as a result of the convergence of such multifaceted tech growth. Certain markets such as cybersecurity and communications technology is set to double its valuation, establishing MENA as one of the largest IT services markets in the world.
