Dubai – Spending on IT and business services in the Middle East and Africa (MEA) — including Israel — will reach $30.3 billion in 2023, according to the latest Worldwide Semiannual Services Tracker from International Data Corporation (IDC). In constant currency terms, this represents a 5.0% increase on the $28.9 billion that was recorded in 2022. IDC forecasts that the market will grow at a compound annual growth rate (CAGR) of 5.9% over the 2023–2027 period, reaching $38.1 billion in 2027.
“The MEA IT services market is forecast to continue growing through 2023 despite ongoing macroeconomic challenges and also the possibility of a global recession,” says Suraj Godse, a senior research analyst at IDC. “This projected growth can be attributed to the stable and strong economies of oil-producing nations in the Gulf, government investments in mega projects and events, and the expansion of in-country cloud services by hyperscalers across the region. However, it is worth noting that the forecast 5.0% growth for 2023 is slower than the previous year.”
IDC expects managed services and project-oriented services will be the fastest-growing market segments in 2023, followed by support and business services. Looking further ahead, IDC forecasts that spending on managed services in the MEA region will grow at a CAGR of 7.6% over the 2023–2027 period, while project-oriented services see a slower CAGR of 5.7%.
“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,” says 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. 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.”
IDC’s Worldwide Semiannual Services Tracker provides detailed, timely, and accurate information on the global IT and business services markets. It provides vendor revenue share and annual forecast data on a semiannual basis across 53 geographies and 14 market segments. It helps global and local players to assess services market dynamics and benchmark themselves. Essentially, the services tracker provides a holistic view of the past, present, and future of the services world. It also includes add-ons for cloud and security segmentation of the total IT services forecast.
To learn more about IDC Tracker products in the MEA region, please contact Sheila Manek at [email protected] or on +971 4 446 3154.
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.
IDC in the Middle East, Turkey, and Africa
For the Middle East, Turkey, and Africa region, IDC retains a coordinated network of offices in Riyadh, Nairobi, Lagos, Johannesburg, Cairo, and Istanbul, with a regional center in Dubai. Our coverage couples local insights with international perspectives to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 130 analysts, consultants, and conference associates across the region. To learn more about IDC MEA, please visit www.idc.com/mea. You can follow IDC MEA on Twitter at @IDCMEA.