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Dubai, May 19, 2015

Gartner Says Middle East IT Spending to Reach $214.7 Billion In 2015

Analysts Say Every Business Unit is Becoming a Technology Startup During Gartner Symposium/ITxpo 2014, May 19-21, in Dubai

Middle East (ME) IT spending is projected to reach $214.7 billion in 2015 a 5.2 percent increase from 2014, according to the latest forecast by Gartner, Inc.

Peter Sondergaard, senior vice president and global head of research at Gartner, provided the latest outlook for the IT industry today to an audience of more than 500 CIOs and IT leaders at Gartner Symposium/ITxpo, which is taking place here through May 21.

“Business intelligence and analytics, infrastructure and data center, and cloud are the Top 3 CIO technology priorities in the Middle East region,” said Mr. Sondergaard. “Sensor/Internet of Things (IoT) are on the radar with no action planned and/or is in the medium to long term planning. Robotics and 3D printing are not priorities in the Middle East in 2015.”

ME spending on devices is forecast to reach $36 billion in 2015, up 16 percent from 2014 (see Table 1). Devices are represented by mobile phones, media tablets, PCs, and printers. Telecom services continues to be the largest segment, accounting for 74 percent of ME IT spending in 2015.

 Table 1. Middle East - IT Spending Estimates (Billions of U.S. Dollars)

 

2014

2015

2016

2017

2018

2019

Devices

31,155

36,157

41,114

45,286

48,488

52,379

Data Center Systems

3,881

4,039

4,091

4,186

4,200

4,187

Software

4,380

4,796

5,250

5,729

6,253

6,836

IT Services

10,107

10,430

10,767

11,169

11,618

12,103

Telecom Services

154,520

159,272

162,465

167,182

172,592

176,045

Total Market

204,043

214,695

223,686

233,553

243,149

251,548

(Gartner, May 2015)

“The impact that the digital business economy is having on the IT industry is dramatic. Since 2013, 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 percent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled. In 2015, all of these things will double again,” said Mr. Sondergaard.

Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.

“This year enterprises will spend over $40 billion designing, implementing and operating the Internet of Things,” Mr. Sondergaard said. “Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

Every Business Unit is a “Technology Startup”

There is a dramatic shift in IT spending power. Mr. Sondergaard said there is a shift of demand and control away from IT and toward digital business units closer to the customer.

“Thirty-eight percent of the total IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50 percent,” Mr. Sondergaard said. “Digital startups sit inside your own organization, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.”

Gartner estimates that 50 percent of all technology sales people are actively selling direct to business units, not IT departments. Millions of sales people and hundreds of thousands of resellers and channel partners are looking for new money flows in the fluid digital world, and they are finding eager buyers.

 Become a Bimodal Organization

Bimodal IT fills the digital divide between what IT provides and what the enterprise really needs. Mode 1 is traditional, and the systems that support them must be reliable, predictable, and safe (like a great IT organization). Mode 2 is nonsequential, emphasizing agility and speed (like a startup) because disruption can occur at anytime.

 Mr. Sondergaard used the example of smart machines to highlight the disruption caused in digital business. Smart machines are an emerging “super class” of technologies that perform a wide variety of work, of both the physical and the intellectual kind. For example, school computers have been grading multiple tests for many years, and now they are grading essays, unstructured tests that require analysis.

“Not is the grading more accurate, but students actually worked harder on their essays when they are graded by a smart machine,” Mr. Sondergaard said. “Other professional tasks won’t be far behind: financial analysts, medical diagnostics, and data analytics jobs will be impacted. Knowledge work will be automated.

Smart robots will appear not just on the manufacturing floor, where they do physical work, but in the workplace and even in the home. Smart machines will automate decision making. Therefore, they will not only affect jobs based on physical labor, but they will also impact jobs based on complex knowledge worker tasks.

 Impact of Digital Business on Jobs

Digital businesses will impact jobs in different ways. By 2018, digital businesses will require 50 percent fewer business process workers. However, by 2018 digital business will drive a 500 percent boost in digital jobs.

 Hottest Skills in Digital Business

Right now, the hottest skills CIOs must hire or outsource for are:

  • Mobile
  • User Experience
  • Data sciences

 In the future, three years from now, the hottest skills will be:

  • Smart Machines (including the Internet of Things)
  • Robotics
  • Automated Judgment
  • Ethics

 Over the next seven years, there will be a surge in new specialized jobs. The top jobs for digital will be:

  • Integration Specialists
  • Digital Business Architects
  • Regulatory Analysts
  • Risk Professionals

The new digital startups in your business units are thirsting for data analysts, software developers and cloud vendor management staff, and they are often hiring them fast than IT. They may be experimenting with smart machines, seeking technology expertise IT often doesn't have.

 “You must build talent for the digital organization of 2020 now. Not just the digital technology organization, but the whole enterprise. Talent is the key to digital leadership. Build credibility and build the two-speed organization, “said Mr. Sondergaard.

About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the world's most important gathering of CIOs and other senior IT executives. This event delivers independent and objective content with the authority of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on these events to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Additional information for Gartner Symposium/ITxpo 2015 in Dubai, May 19-21, is available at http://www.gartner.com/technology/symposium/dubai/ . Members of the media can register for the event by contacting Sony Shetty at sony.shetty@gartner.com.

Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSYM.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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