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ME 2015 IT spend to hit ‘$215 billion’

Peter Sondergaard, Senior Vice President and Global Head of Research, Gartner
Peter Sondergaard, Senior Vice President and Global Head of Research, Gartner

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.

Peter Sondergaard, Senior Vice President and Global Head of Research, Gartner, provided the latest outlook for the IT industry to an audience of more than 500 CIOs and IT leaders at Gartner Symposium/ITxpo, which is taking place at the Madinat Jumeirah until 21st May.

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.

Meanwhile, $4 billion is forecast to be spent on data centre systems, $4.8 billion on software, and $10.4 billion on IT services.

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

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 IoT.

“This year enterprises will spend over $40 billion designing, implementing and operating the IoT,” 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.”

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 organisation, 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.

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.

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.

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