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Gartner Forecasts MENA IT Spending to Grow 4% in 2024September 20, 2023 | Gartner, Inc.
Estimated reading time: 2 minutes
IT spending in the Middle East and North Africa (MENA) region is forecast to accelerate in 2024, increasing 4% from 2023, according to the latest forecast by Gartner, Inc.
MENA’s IT spending is projected to total $183.8 billion in 2024, up from $176.8 billion in 2023. In comparison, global IT spending is projected to total $5.1 trillion in 2024.
“IT spending in MENA is increasing because organizations, particularly in the Gulf Cooperation Council (GCC) region, continue to focus on digitalizing their IT infrastructure,” said Miriam Burt, Managing VP Analyst at Gartner. “This is required to support regional governments’ push to implement their country visions for economic diversification, enhance public-private collaboration as well as bolster sustainability efforts towards net-zero targets.”
Software and IT Services Spending to Record Double-Digit Growth
MENA software spending is expected to record double-digit growth of 12.3% in 2024, followed by IT services spending, growing at 11.1%. “Organizations in MENA will invest more in software and IT services to accelerate digitalization and streamline operations by continuing cloud migration efforts and increasing automation and IoT capabilities. The spending will also be targeted to enforce compliance with regulation,” said Burt. “By 2024, we expect local organizations to increase their spending on embedding artificial intelligence (AI) into their strategic business and IT planning. Improving data management to yield greater monetization as well as strengthening cybersecurity security and risk management will remain top spending priorities in the region.”
The devices segment is forecast to experience an upturn in 2024. Devices spending in MENA is projected to increase 0.6% in 2024, up from a decline of 9.9% in 2023.
“The return to growth in devices spending can be attributed to various factors such as the growing aspiration of consumers in the region to own smartphones, aggressive marketing campaigns for new product launches by premium brands and the steady shift towards 5G for improved coverage, speed and consistency,” said Burt. “Higher affordability through greater access to financing options - such as buy now pay later (BNPL) - as well as the increasing number of ways to make digital payments through smartphones are also contributing to the recovery in the segment.”
Increased Focus on Generative AI
Gartner predicts that by 2024, 40% of enterprise applications will have embedded conversational AI, up from less than 5% in 2020. “Despite economic challenges, business executives in the MENA region are primarily investing in generative AI (GenAI) to enhance customer experience,” said Eyad Tachwali, Sr Director Advisory at Gartner. “GenAI promises to revolutionize public and private sector engagement with customers/citizens by delivering personalized, real-time solutions to complex inquiries.”
Successful regional business and IT leaders are employing agile methodologies in their generative AI initiatives, focusing on quick testing and refinement while eliminating low-impact use cases. Currently, most MENA organizations are exploring the potential of GenAI by focusing on emerging use cases, such as generative value messaging (turning customer data quickly into customized content), coding assistance (translation of code from older coding languages).
“In the future, a cautious yet deliberate integration of GenAI is anticipated as local businesses continue to evolve their AI strategies and pinpoint specific use-cases. This will primarily be facilitated through upgrades to tools already included in existing IT budgets,” said Tachwali.
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