The Middle East and Africa (MEA) region is expected to continue growing its spending on IT and business services despite the looming possibility of a global recession. According to the Worldwide Semiannual Services Tracker from IDC, MEA, which includes Israel, is expected to spend $30.3 billion on IT and business services in 2023, up by 5.0% from the $28.9 billion reported in 2022.
IDC predicts that the MEA market will expand at a compound annual growth rate (CAGR) of 5.9% from 2023 to 2027, reaching $38.1 billion in that year. Suraj Godse, a Senior Research Analyst at IDC, says that the MEA IT services market is forecast to continue growing through 2023 despite ongoing macroeconomic challenges and the potential for a global recession.
The stable and robust economies of the Gulf oil-producing countries, government spending in major events and projects, and the spread of local cloud services by hyperscalers in the area are all factors that contribute to the predicted increase. However, it is important to keep in mind that 2023’s predicted 5.0% growth is lower than it was in 2018.
According to IDC, the fastest-growing market sectors in 2023 will be managed services and project-oriented services, followed by support and business services. Managed services are predicted to increase at a CAGR of 7.6% from 2023 to 2027, while project-oriented services will have a slower CAGR of 5.7%.
The IDC report highlights the increasing importance of IT and business services in the MEA region, and the growth opportunities that exist in the market. The MEA region is a key area for B2B tech-savvy business readers to consider when looking to expand their operations or invest in new opportunities.
Cloud Hyperscalers
“Increased IT costs - mostly due to inflation/currency changes, disruptions in the IT supply chain, and a shortage of skilled labor - will continue to be a challenge,” said Suraj Godse. “The anticipation of a potential recession has also led to increased pressure on CIOs to reduce IT expenses; as a result, they are increasingly looking for more cost-effective OPEX-based IT solutions.”“Cloud-related services continue to drive growth in IT services revenue as organizations accelerate their cloud journeys by moving mission-critical applications to the cloud,” added Godse. “Indeed, recent announcements by cloud hyperscalers regarding the launch of in-country cloud services across the MEA region are enabling organizations to expand their cloud usage via a hybrid multicloud approach for added cost savings.”
Vendor revenue share and yearly projection statistics are provided on a semiannual basis across 53 regions and 14 market sectors by IDC’s Worldwide Semiannual Services Tracker. It enables local and international firms to measure themselves and analyse the developments of the services sector.
