It’s also why corporate IT spending didn’t seem to reach the same levels it did in 2020-21, as the need for remote work forced businesses of all sizes to upgrade. immediately to support the transition.
– Advertising –
“Business spending is increasing and moving more towards cloud-based opex (operating costs) models rather than traditional capex (capital expenditure) models,” says Victoria Mendes, research manager for data and analytics (META) at consultancy IDC.
We do not expect a delay as there is a simple shift in spending from traditional to cloud and we expect enterprise technology spending to be at or even above 2019 levels.
–Victoria Mendes, IDC
This means less large server expenses and expensive upgrades of their IT systems – unless absolutely necessary. The other category that continues to gain business endorsements is cyber security.
And tech industry sources say 2023 has all the makings of another strong year in terms of spending. “In the UAE, government organizations are way ahead in making these necessary investments and upgrades for ‘everything smart,'” said the CEO of an IT services company in Dubai. “The same can only be said of the largest private companies here – there are so many things that have to be done by others.
“Unless there is a major global recession and its effects are also felt by the Gulf economies, IT spending will not stop.”
This is then the background to the opening of the latest Gitex, now dubbed “Gitex Global”, which will dwell deeply on startups, fintechs, Metaverse and of course the cloud among the most important sectors. The 2022 edition begins on Monday, October 10 and continues until Friday at the Dubai World Trade Centre.
Global heavyweights such as Huawei, Amazon Web Services, Microsoft and Oracle have taken up enough space in the UAE’s transition to the cloud. They have become operational with state-of-the-art data centers, while Khazna, owned by G42 and e&- (formerly Etisalat), is the local powerhouse in this area.
Check out these figures on cloud spending in the UAE, and it provides even more evidence as to why IDC’s Victoria believes this is where IT spending will continue to be.
According to an IDC survey, around 70% of UAE companies are moving from the “discover and pilot” phase to “meaningful deployment of business applications in the cloud”. Public cloud spending in the UAE is expected to grow 31.6% this year to $1.3 billion, while private cloud spending continues to rise and “hybrid multiclouds are increasingly the standard for organizations. (The public cloud is where computing resources are owned and is operated by the provider and shared over the network with several tenants.)
Digital transformations – and a chance for VCs
At the same time, digital transformation projects will keep technology companies busy. “There will be a strong focus on online payment services across all categories, opening up more chances for fintechs to secure key deals, funding,” an industry source said.
This would signal more action from tech startups in the region. Walid Hanna is the founder and CEO of Middle East Venture Partners (MEVP), the Dubai-based venture capital firm. Hanna believes these will be top trends in tech startups:
* Market penetration (of e-commerce, online payment, etc.) is still quite low compared to Western markets (4x less).
* Online banking infrastructure is underdeveloped, especially in the Levant and North Africa, which also leaves room for further digitization.
* Presence of a very underbanked population with few credit options.
* There is still room for clearer regulation, especially in the fintech area. The United Arab Emirates, Saudi Arabia and Egypt are the pioneers in the region.
* Exit opportunities are increasing, whether from an M&A or IPO perspective, which was unthinkable three years ago.
MEVP has had several successful releases, including seven in 2021 alone, including (Abu Dhabi HQ Music Portal) Anghami.
– Walid Hanna, MVP
“We closed a partial exit of Fresha, an online marketplace and SaaS (Service as a Software) management platform for spas and salons, delivering 52x cash return. The company started in the United Arab Emirates and primarily serves US markets. It then expanded globally and moved its headquarters to the UK.
And then there’s the Metaverse
Dubai’s digital transformation plan has emphasized the metaverse. Dubai’s first set of features, such as the Dubai Airport Free Zone, have already announced their presence in a parallel universe built around augmented reality.
And the presence of Dubai entities on Metaverse will be based on solving real problems and more.
This is how Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said the other day: “We are exploring the use of the metaverse in our services, including simulations of warehouse and terminal operations, container and ship repair inspections, safety training and other commercial applications. Our customers will now be able to see and understand the entire end-to-end supply chain – with full visibility – and take corrective action in case of logistical bottlenecks.
By using this technology, we hope to keep trade flowing, increase visibility and minimize disruption to build future-ready trade networks.
– Sultan Ahmed Bin Sulayem, DP World
The Cloud and the Metaverse – in IT, that’s where the spending will be…