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%.
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.