ICT spending in UAE to reach US$23bn by 2024
ICT spending in the United Arab Emirates (UAE) will reach US$23bn in 2024, according to new research from GlobalData.
The figure represents a compound annual growth rate (CAGR) of 8% during the period 2019-2024.
GlobalData says the results show that the UAE continues to be among the most attractive ICT markets in the Middle East, driven by digitalization initiatives and aided by the increased adoption of leading technologies such as cloud, big data analytics, internet of things (IoT) and artificial intelligence (AI).
"Digitization of the UAE economy, economic diversification initiatives by the government, growing adoption of IoT technologies and rising demand from the enterprise, retail and construction sectors are the major factors driving the growth of the ICT market," says Rohit Sharma, senior analyst at Global Data.
According to the research, the services segment accounted for around 58% of the overall ICT spending in 2019 and is forecast to retain the largest share by the end of 2024. However, the software/application segment is projected to record the highest CAGR of 11% during the forecast (2020-24) period.
"Strong demand for PCs and servers by consumers and businesses, as well as continued investment by companies in IT infrastructure, will boost the sales of the hardware segment in the forecast period," says Sharma.
"The overall revenue from hardware/infrastructure is estimated to reach US$6bn by 2024."
The research shows ICT spending across the banking, financial services and insurance (BFSI) and energy verticals will account for a major share (43%) of the overall ICT spend in the country by 2024.
"Financial services firms will continue to maintain spending on IT products related to banking such as mobile banking, payment solutions, customer data analysis, stock trading and asset management platforms," Sharma says.
"Demand for smart mining solutions is expected to rise as oil and gas companies strive to enhance their operational efficiency. On the other hand, the continued threat of security breaches will maintain demand for AI-based autonomous security technologies," he explains.
According to GlobalData's research, ICT investments in the construction and travel & leisure sectors are also expected to increase significantly. The construction industry in the UAE continues to incline towards the adoption of advanced technologies such as building information modeling (BIM) software, drones, virtual reality and augmented reality apps, as well as smart sensors and 3D printing, to enhance productivity, improve quality control and ensure safer workplaces. Similarly, the travel and leisure industry is expected to increase investments in big data technology to understand travelers preferences and track their real-time information.
"High demand for data collection, analysis and automation services to monitor production and employee performance, as well as investments in cyber security are expected to significantly increase over the next few years," Sharma says.
"Additionally, increased investments in emerging technologies such as AI and block-chain solutions will act as catalysts for the ICT spending market in the UAE."