With countries and businesses taking several digital transformation projects and investing in AI and emerging technologies in the Middle East and North Africa (MENA) region, information technology (IT) spending is set to reach $193.7 billion in 2024, a 5.2% increase from the previous 12 months, according to Gartner’s latest MENA IT Spending forecast. 

The US-based consulting firm stated that while the sector’s outlay is set to increase, it will be slower than the 6.6% annual rise recorded in 2023.

Miriam Burt, managing vice president analyst at Gartner, said, “While inflation in the region has eased, organizations in the Middle East continue to face challenges due to ongoing uncertainty caused by oil production cuts, downside economic risks linked to regional geopolitical tensions, as well as supply chain disruptions in key shipping routes. As a result, local organizations are becoming more cautious with their IT expenditures.” 

Additionally, the report mentioned spending on data center systems is projected to decline by 0.3% in 2024, from $4.82 billion in 2023 to $4.80 billion.

“This is due to the rise in demand of alternative options such as software-defined storage, hyper-converged infrastructure software, and the ‘storage as a service’ model,” said Burt. 

Meanwhile, MENA IT services spending will increase by 9.6% in 2024 to reach $19 billion, up from $17.3 billion in 2023. 

“IT leaders in the MENA region are, in the first instance, spending more on professional and consulting services to prepare their businesses for cloud migration, artificial intelligence (AI,) generative AI, and internet of things (IoT) implementations, and secondly, taking advantage of the data monetization opportunities resulting from the convergence of these technologies,” said Burt. 

She added that security remains a key area for IT services spending and the increasing purchase of products, services, and tools through XaaS (anything-as-a-service) consumption models.

The report stated that global hyper scalers, which can offer extensive infrastructure for storage and computing facilities for AI and GenAI, are accelerating investments in in-country data centers.