According to a recent report by the International Data Corporation (IDC), the Middle East and Africa (MEA) region is expected to spend $30.3 billion on IT and business services in 2023, a 5.0% increase from the $28.9 billion spent in 2022.

The report reveals that the region's stable and strong oil-producing economies, investments in mega projects and events, and expansion of in-country cloud services by hyperscalers are the reasons behind the region's growth.

Managed services and project-oriented services will be the fastest-growing market segments in 2023, followed by support and business services. IDC predicts that spending on managed services will grow at a CAGR of 7.6% between 2023-2027, while project-oriented services will have a CAGR of 5.7%.

AI spending in the MEA region to reach $3 billion in 2023
The Middle East and Africa (MEA), including Israel, are expected to spend $3 billion on artificial intelligence (AI) in 2023, according to International Data Corporation (IDC). While this only accounts for 2% of the global total, MEA is expected to experience the fastest growth rate worldwide, with…

However, IDC warns that increased IT costs due to inflation, disruptions in the IT supply chain, and a shortage of skilled labour, and pressure to reduce IT expenses may pose challenges to growth.

IDC also highlights the acceleration of cloud journeys as organizations move mission-critical applications to the cloud, and cloud-related services drive growth in IT services revenue.

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.