Expectations for cloud spending in the region by the IDC to grow 23.8% year on year in 2024 to reach $13.6 billion
The Middle East, Türkiye, and Africa (META) region is witnessing a surge in information and communications technology (ICT) spending, driven by the digital transformation initiatives of various sectors and industries. According to a report by International Data Corporation (IDC), ICT spending in the META region will top $238 billion this year, up 4.5% over 2023.
The report also predicts that digital transformation spending. This includes investments in cloud, artificial intelligence (AI), internet of things (IoT), and other emerging technologies, which will reach $59 billion in 2024 and accelerate at a five-year compound annual growth rate (CAGR) of 15% to $88 billion in 2027.
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Key Drivers and Trends
One of the key drivers of ICT spending in the META region is the growing demand for cloud services. Organizations seek to enhance their agility, scalability, and resilience in the face of the COVID-19 pandemic and its aftermath. IDC expects cloud spending in the region to grow 23.8% year on year in 2024 to reach $13.6 billion.
Another major driver is the adoption of AI solutions. These solutions are expected to help organizations improve their customer experience, operational efficiency, and innovation capabilities. IDC forecasts that AI spending in the region will top $3 billion in 2024, up 32% over 2023, and reach $6.9 billion by 2027.
Other emerging technologies gaining traction in the region include IoT, blockchain, robotics, augmented and virtual reality (AR/VR), and 5G. Consequently, they enable new use cases and business models across various industries, such as healthcare, education, retail, manufacturing, and government.
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Challenges and Opportunities
Despite the positive outlook, ICT spending in the META region faces several challenges, such as volatile demand, high inflation, interest rate hikes, supply chain uncertainties, and currency fluctuations. Moreover, the region still lags behind other regions in terms of ICT maturity, skills, and regulations, which may hamper the adoption and implementation of advanced technologies.
However, these challenges also present opportunities for ICT vendors and service providers to differentiate themselves by offering solutions that address the specific needs and pain points of their customers in the region. IDC advises ICT vendors and service providers to focus on the following areas to succeed in the META market:
- Developing responsible AI strategies that support their customers in unlocking funding for investments, ensuring return on investment (ROI), and delivering significant business outcomes for prioritized use cases.
- Providing cloud solutions that are secure, compliant, and cost-effective, and that support hybrid and multi-cloud environments.
- Leveraging edge computing to deliver low-latency, high-performance, and data-intensive applications, especially for IoT and 5G use cases.
- Enhancing their digital resiliency capabilities to cope with the changing market conditions and customer expectations.
- Building strong partnerships and ecosystems to deliver end-to-end solutions and services that span across different technologies, domains, and industries.
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In conclusion, the META region is undergoing a rapid digital transformation that is reshaping its ICT landscape and creating new opportunities for growth and innovation. However, ICT vendors and service providers need to overcome the challenges and risks that the region faces and offer solutions that are tailored to the specific needs and goals of their customers in the region.
