The International Data Corporation (IDC) reduced its global IT spending forecast for 2023, stating in its most recent report that the probability of overall growth in global IT spending this year will fall to 4.4%, reaching $3.25 trillion, which is lower than the 6.0% forecast it published in October 2022, reflecting the impact of the weak economy on technology investments that do not appear promising globally.
According to the IDC analysis, the global consumer sector would be hurt the worst, with consumer expenditure on IT anticipated to fall by 2% this year. It is the second consecutive year to witness a decline in the growth rate after reaching 18% in 2021. Despite economic headwinds, enterprise demand for cloud services and digital transformation is projected to continue high.
The IDC analysis shows that direct IT spending would increase by 6.4%, while indirect expenditure would increase by only 2.5%. This is due to credit restriction, which impacts the ability of small businesses and consumers to finance technology investments.
Regional IT Security
Spending on security solutions and services is predicted to expand 7.9% year on year in 2023, reaching $6.2 billion, and to rise to $7.7 billion in 2026, at a compound annual growth rate of 7.8% from 2022 to 2026, according to IDC.
According to the report, security software will account for most of the spending in 2023, with the fastest growth rate this year as digital transformation initiatives drive demand for solutions across the region.
With a 19.2% share, the banking, financial, and insurance services (BFSI) sector will be the leading spender on security solutions and services in the Middle East and Africa until 2026. Government institutions will be the region’s second largest spenders, accounting for 15.6% of total spending, as governments invest in network security solutions to maintain regulatory compliance.
Artificial Intelligence in the Region
According to the International Data Corporation (IDC), the Middle East and Africa region will spend $3 billion on artificial intelligence (AI) in 2023. While this represents only 2% of the global total, the Middle East and Africa region is expected to see the fastest growth rate worldwide, with a potential estimate of $6.4 billion in AI spending in 2026.
According to the analysis, banks, retail services, federal or central government, and discrete manufacturing would spend the most money on AI in the MENA region in 2023, accounting for 44% of overall investment. Professional services and transportation, according to IDC, will be the fastest-growing industries over the next five years, with a CAGR of 36.4%.
Despite the report’s optimistic growth figures and rates and the Middle East and Africa region’s growing reliance on artificial intelligence, the report highlighted the sector’s challenges, including a lack of skilled resources such as data scientists, engineers and AI designers. However, there is still promise for government attempts to develop local talent since public and private sector organisations have collaborated to boost AI and machine learning.
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Last Updated on April 20, 2023 by Safiya K
