MENA’s Tech Renaissance: Breaking Down the US$183.8 Billion IT Boom in 2024
In a recent forecast by Gartner, IT spending in the Middle East and North Africa [MENA] region is expected to experience a significant uptick in 2024, surging by 4 percent from the previous year. The surge, primarily led by organisations in the GCC region, is attributed to a relentless focus on digital transformation initiatives, according to Miriam Burt, Managing VP Analyst at Gartner.
MENA’s IT expenditure is projected to reach US$183.8 billion in 2024, marking a substantial increase from US$176.8 billion in 2023. In comparison, global IT spending is anticipated to total US$5.1 trillion in the same year.
Burt stated, “IT spending in MENA is increasing because organisations, particularly in the GCC region, continue to focus on digitalising their IT infrastructure. This is required to support regional governments’ push to implement their country visions for economic diversification, enhance public-private collaboration, as well as bolster sustainability efforts towards net-zero targets.”
Double-Digit Growth in Software and IT Services Spending
MENA’s software spending is expected to witness a remarkable growth of 12.3 percent in 2024, followed closely by IT services spending, which is anticipated to grow at 11.1 percent. This surge is fuelled by investments in software and IT services to accelerate digitalisation efforts, streamline operations, enhance compliance with regulations, and enforce cybersecurity measures. Moreover, local organisations are expected to increase their spending on embedding artificial intelligence (AI) into their strategic business and IT planning.
Devices Segment Recovery
After a decline of 9.9 percent in 2023, the devices segment in MENA is poised for recovery in 2024. Devices spending is projected to increase by 0.6 percent, driven by growing consumer aspirations for smartphones, aggressive marketing campaigns by premium brands, and the steady shift towards 5G technology. Additionally, increased affordability through financing options like buy now pay later (BNPL) and the convenience of digital payments are contributing to the revival of this segment.
Focus on Generative AI
Gartner predicts that by 2024, 40 percent of enterprise applications in MENA will incorporate conversational AI, up from less than 5 percent in 2020. Businesses in the region are investing significantly in generative AI (GenAI) to enhance customer experience. GenAI, focusing on personalised, real-time solutions for complex inquiries, is being strategically integrated into various sectors, including generative value messaging and coding assistance.
Eyad Tachwali, Sr Director Advisory at Gartner, emphasised, “Successful regional business and IT leaders are employing agile methodologies in their generative AI initiatives, focusing on quick testing and refinement while eliminating low-impact use cases. Cautious yet deliberate integration of GenAI is anticipated as local businesses continue to evolve their AI strategies and pinpoint specific use-cases.”
With MENA’s IT landscape gearing up for substantial growth, driven by digitalisation, AI integration, and consumer demand, businesses in the region are poised for a transformative year in 2024. The strategic investments in technology underscore the region’s commitment to innovation and sustainable development.