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: -Research and Markets: United Arab Emirates Information Technology Report Q4 2010 - Anticipates IT Spending To Rise from US$971mn in 2010 to US$1.4bn In 2014
(M2 PressWIRE Via Acquire Media NewsEdge) RDATE:02122010
Dublin - Research and Markets
(http://www.researchandmarkets.com/research/93ad43/united_arab_emirat) has announced the addition of the "United Arab Emirates Information Technology Report Q4 2010" report to their offering.
United Arab Emirates Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the United Arab Emirates' information technology industry.
Market Overview
UAE IT spending is forecast to bounce back strongly in 2010, despite current economic uncertainties. UAE spending on IT products and services is projected to reach US$3.3bn in 2010 as double-digit growth is led by a big increase in PC sales, which declined sharply last year.
Government spending and investment should help support the market, with further opportunities in sectors such as education, healthcare, utilities, banking and telecoms. UAE economic growth is projected to pick up in 2010, with a recovery in credit and loan markets expected by the end of the year. However, the property price slump and financial upheavals of late 2009 will continue to influence business and consumer caution.
IT spending is projected to grow at a 2010-2014 CAGR of 8%. Several fundamental drivers of IT spending should help prevent market stagnation, including local and federal government initiatives, longterm infrastructure projects, significant population growth and development of non-oil sectors.
Industry Developments
In September 2009, the Jordan-headquartered Arab Bank announced it had relocated its Gulf and Yemen back-office operations to the Dubai Outsourcing Zone, with the operation employing an estimated 300 staff. The Dubai Outsourcing Zone initiative was expected to attract more outsourcing business to the UAE, with incentives including 100% exemption from taxes.
In April 2009, the UAE Ministry of Education announced a AED79mn (US$21.5mn) allocation for 2009 for an initiative to supply computers and internet to state schools. Concerns had been growing that state schools were lagging behind private schools in IT and internet use. The government will collaborate in this initiative with Netgear.
Another key area for federal IT spending will be healthcare. The federal government's Wareed healthcare IT initiative aims to establish a completely integrated electronic platform linking 13 state-run hospitals and their 67 affiliated clinics across the country.
Competitive Landscape
Software market leader Microsoft hopes migrations to its Windows 7 operating system, launched in October 2009, will boost its sales in the UAE market. In September 2010, web analytics firm StatCounter estimated Windows 7 had achieved a 21.5% share of the UAE operating system market, still behind its predecessors Windows XP, which accounted for 51.8%, and Windows Vista, with 22.5%. In June 2010, Microsoft announced the availability of its Microsoft Office 2010, Visio 2010 and Project 2010 in the Gulf region.
Dubai-based IT services giant Injazat Data Systems continues to build its partner network, signing an agreement in January 2010 with Alrowad IT Solutions to deliver a range of customised IT services to customers. In August 2010, Injazat signed a partnership agreement with telecom services provider Du to provide business customers with networked IT services. In 2009, Injazat also signed a Service Provider Licensing Agreement with Microsoft Gulf to enable Injazat to deliver Microsoft software.
HP Middle East said in Q110 it planned to concentrate on software and services this year to compensate for a decline in product sales in 2009. In 2009, as sales of hardware declined, the company's regional software and services business showed solid growth. HP sees data centre transformation as a key driver of opportunity. Meanwhile, joint venture Xerox Emirates also plans a focus on services in 2010 after the appointment of NTS as a local business partner.
Hardware
UAE computer hardware sales including PCs, notebooks and accessories are projected at around US$1.80bn in 2010, with a return to double-digit growth following a contraction in 2009. The segment is forecast to grow at a CAGR of 7% between 2010 and 2014 in US dollar terms. PC shipments are forecast to bounce back in 2010, with the resurgent growth boosted by computer purchases deferred from 2009. In Q110, shipments growth was around 10% but much of the growth was fuelled by demand for lower-priced notebooks and netbooks, which deflated average prices. In the second half of 2009, stronger demand in the notebook sector was the main factor driving retail segment growth, as consumer sales felt the benefits of aggressive channel promotions.
Software
BMI forecasts the UAE's software spending will be around US$611mn in 2010. The UAE is one of the region's fastest-growing ERP markets, as more businesses realise the benefits of efficient resource management in their internal processes. Manufacturing and trading firms are both seeking efficiencies by transitioning from manual environments to full automation of back-office systems. CRM is another growth area, with fewer than 2% of SMEs in the Middle East having a specialised CRM application in place.
In 2010, SMEs are expected to be a key focus for ERP vendors, as the corporate market for ERP solutions has become saturated. The oil and gas sector has been hit particularly hard by the precipitous fall in oil prices since mid-2008, but BMI predicts plenty of room for growth in the forecast period. Many untapped sub-sectors still exist and there is growing demand for industry-specific solutions.
IT Services
BMI predicts IT services growth will remain in positive territory through to 2014. Spending is anticipated to rise from US$971mn in 2010 to US$1.4bn in 2014. IT services revenue CAGR over the forecast period is expected to be 10%. Services have become an increasingly important component of many deployment contracts, as evidenced by recent projects by leading UAE corporations such as Emirates Airlines and Etisalat.
In early 2009, there were reports of IT managers in various sectors looking to cut costs. However, this often resulted in scaling back projects by 10-20% rather than cancelling them. In the government sector, budgets have often already been commissioned and so the effects were more likely to be felt in the second half of 2009 and in 2010. Much will depend on the speed of global economic recovery and the future trend of oil prices.
E-Readiness
The UAE benefits from a good regulatory environment and clear government leadership in IT. Although both dial-up and broadband internet connections are expected to continue growing over the next five years, broadband growth is expected to outpace the growth of dial-up connections and will likely cause the dial-up sector to enter a period of gradual decline. Price cuts by both Etisalat and du have helped drive growth by making broadband services more affordable, particularly for residential customers. In January 2008 Etisalat announced it had completed the first phase of deployment of its fibre-to-the-home (FTTH) network. Looking ahead, du and Etisalat both plan to launch WiMAX wireless services and we expect this to give the market another major boost.
Companies Mentioned:
- IBM
- HP
- Oracle
- Microsoft
- Almasa Group
For more information visit http://www.researchandmarkets.com/research/93ad43/united_arab_emirat
CONTACT:
Laura Wood, Senior Manager, Research and Markets
Fax: +1 646 607 1907 (from USA)
Fax: +353 1 481 1716 (rest of the world)
e-mail: press@researchandmarkets.com
((M2 Communications disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com)).
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