Saudi increases its IT spend

KSA's drive into the digital economy looks set to continue as IT spending increased in 2002. IDC reports that the market grew by around 14%, as the government and large companies carried out sizable hardware led implementations.

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By  Matthew Southwell Published  March 27, 2003

Saudi Arabia’s drive into the knowledge economy looks set to continue as IT spending increased once more in 2002. According to IDC, investment in information technology grew by approximately 14%, as both government ministries and large organisations carried out sizable hardware led implementations.

“If you look at year on year spending for 2002 over 2001, you will see between 13.5 and 14% IT spending growth in Saudi Arabia. This was driven by hardware investment, as 2002 was a replacement year in terms of hardware,” confirms Jyoti Lalchandani, software & consulting, regional director, IDC Middle East.

“A number of customers, primarily in the government sector and the ministries, undertook several projects. The Ministry of Education is a good example, as it issued some huge tenders, involving some 20 to 30,000 PCs,” he adds.

While investment in servers grew by approximately 10%, PC growth in the Kingdom was an impressive 24% for 2002. Preliminary numbers for notebooks revealed a staggering 65% increase in the number of units sold. Furthermore, such aggressive hardware spending is predicted to kick-start KSA’s software market, which has been sluggish in the past.

“After big years for hardware investment, the next couple of years [should] see corresponding spending in software… Companies have the infrastructure in place and now they are looking at making use of it,” explains Lalchandani. “There are three or four areas where we have tracked strong software spending. They are security software, storage software and enterprise resource planning (ERP) software,” he adds.

Although the outlook for Saudi’s IT spending is positive, the current political climate in the region will have a short term affect on purchasing strategies. IDC suggests that the second quarter of 2002 will be slow, but investment should pick up later in the year.

“We expect the Saudi market to have a rough period in the second quarter depending on the timing of the war. But we expect it to still growth throughout the third and fourth to around 9% for 2003,” predicts Lalchandani.

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