Generative AI Is Not Expected to Have Significant Impact on MENA IT Spending Levels in 2024.
IT spending in the Middle East and North Africa (MENA) region is forecast to total $193.7 billion in 2024, an increase of 5.2% from 2023, according to the latest forecast by Gartner, Inc. The annual growth is down from 6.6% growth in 2023.
“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,” said Miriam Burt, Managing VP Analyst, Gartner.
The systems in data centers consist of servers, external controller-based (ECB) storage, and enterprise network equipment. The forecasted decline can be attributed to a decrease in regional spending on ECB storage. “This is due to the rise in demand of alternative options such as software-defined storage (SDS), hyperconverged infrastructure software (HCIS), and the ‘storage as a service’ model,” added Burt.
MENA IT services spending is expected to record an increase of 9.6% in 2024. 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, AI, generative AI (GenAI), and IoT implementations, and secondly, taking advantage of the data monetization opportunities resulting from the convergence of these technologies. Security remains a key area for IT services spending, as well as the increasing purchase of products, services, and tools through ‘XaaS’ (Anything as a Service) consumption models – both contributing to the overall growth of this segment.
Devices spending is expected to further decline 4.5% in 2024. This is due to uneven demand for newer devices, such as mobile phones, in different countries within the MENA region. Furthermore, global hyperscalers, with the ability to offer extensive infrastructure for storage and computing facilities for AI and GenAI, are accelerating investments in in-country data centers, particularly world-class green data centers.
