For the past five years, the UAE has been heading towards a new era of innovation and technology. Reports show that UAE’s spending on Information Technology surged with a 15% annual growth. This means more opportunities for small to medium-sized IT companies to increase their revenues.
As the UAE is becoming a hub for businesses, IT companies have more exposure to potential investments from enterprises due to the demand of hardware, software, and other IT-related services. Global IT vendors are also establishing their business in the UAE to get more reach in the Middle East regional market.
What are the other changes and trends that we can expect in the UAE’s IT sector? Let’s start with the following:
Positive and Resilient Growth by 2019
Analysis from the Dubai Chamber of Commerce and Industry predicted UAE IT sales to increase to almost AED 22 billion by 2019. As of current reports, the country’s IT market value remains close to AED 17 billion.
Reports say that IT services and software sales, along with hardware sales, are expected to grow marginally. This means an IT company in Dubai can remain afloat for the next couple of years. While hardware sales take up the bigger portion of the market pie, IT services are not far behind and might even reach the same level as the hardware market by 2020.
Managed Services are Getting More Traction
Experts analyze that managed services will be taking the reins and become a major growth area, as the demands for real-time analytics and cloud computing rise. According to reports, IT services generated a revenue of AED 5.3 billion in 2014 alone. With businesses continuously signing an AMC maintenance contract with their IT provider, managed IT services is likely stay a hot market for the next couple of years.
Government Participation in the IT market
While the private sector accounts for majority of IT spending, the government has a 40% share in IT investments. The government and other organizations invest in internet technology and other forms of innovation to push local initiatives, such as Smart City Dubai. Active involvement in IT projects is also noted, such as IT hardware for education and e-government services.
With all the investments happening and the improvements in the UAE’s technology segment, the IT market is in a continuous ascent. Moreover, the “Smart City” initiative in Dubai is proving to be the driving force behind the ventures for IT-related services.