While the Middle East and Africa may be one of the fastest growing markets for IT, buying priorities are set to shift significantly this year.
According to researchers IDC, the Middle East and Africa region (MEA) will spend over $270bn on IT during 2015, a rise of around nine percent year on year.
However, the MEA enterprise hardware market may not benefit from the spending spree. For the third quarter of last year, sales of storage and server systems rose 3.8 percent year on year, stats published this week by IDC show.
"The MEA enterprise hardware market is poised to take a new direction in terms of infrastructure investment in 2015. We are expecting to see a shift in focus toward efficiency and consolidation, with demand moving from volume products to value products," Swapna Subramani, research manager for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey, said.
That change is already being felt in the server market: while its value rose year on year by three percent, unit sales were down by over six percent as buyers looked to converged infrastructure and virtualisation to cut their server fleets.
The MEA market for external storage showed more robust growth of 13.9 percent year on year for the third quarter of last year. It's lower cost options that are doing best for growth, according to IDC, while high-end systems saw falling shipments.
"The storage market is witnessing increased uptake of entry-level and midrange storage devices driven by demand for the NAS protocol. High-end storage devices actually saw a sharp decline in shipments in Q3 2014, validating the overall market movement into more cost-optimized, scalable solutions that can be adapted to third platform technologies such as cloud, big data, mobility and social," Subramani said.
The fortunes of the enterprise market vary significantly between countries across the region. The UAE, for example, saw growth of over 30 percent thanks to telcos and government bodies getting their chequebooks out, while it fell by nearly 12 percent in Algeria, Morocco, and Tunisia.
For this year, the analysts expect smart city and transport projects to help stimulate overall IT spending in the Middle East, while a lack of legacy infrastructure will spur new IT purchases in Africa, as buyers will be able to move faster on new acquisitions.
In the MEA region as a whole, software spending will increase at a faster rate than hardware, with SaaS slated to grow 29 percent in 2015 thanks to its rising use "focused on non-critical workloads such as sales, marketing, CRM, and talent management", IDC said.
And, just like their colleagues the world over, CIOs in the Middle East and Africa will see more of their budgets being spent by execs in other departments.
"The year 2015 is also expected to see the rise of the executive buyer, with the MEA region set to follow the worldwide trend of growing line-of-business influence over IT spending," Jyoti Lalchandani, group vice president and regional MD at IDC Middle East, Turkey, and Africa, said. "Globally, 60 percent of enterprises plan to structure their IT initiatives into core IT projects and LoB IT projects."
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