UAE IT Services spending to exceed $300 million in 2006

The IT services market in the Middle East will experience a strong growth during the next five years with values exceeding $300 million and $1 billion by 2006 in the UAE and Saudi Arabia, according to IDC.

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By  Vijaya Cherian Published  April 16, 2003

The IT services market in the Middle East will experience a huge growth during the next five years with values exceeding $300 million and $1 billion by 2006 in the UAE and Saudi Arabia, according to IDC. One of the key areas in which the IT spend will increase is outsourcing.

"Changing business attitudes among local end-users combined with increasing investments in complex hardware and software technologies will continue to drive spending on IT services in the regional market", says Torben Pedersen, Senior Analyst, IDC Middle East & North Africa. "Our most recent data shows that Middle East IT services markets are outpacing worldwide IT services market increases with compound annual growth rates (CAGR) reaching 11.0% and 10.2% in the UAE and Saudi Arabia, respectively, over the next five years".

By contrast, the IT services market worldwide will experience only a moderate growth over the next five years, according to the analyst house. IDC predicts that the IT services market will increase to $489.8 billion at a 6.7% compound annual growth rate (CAGR) over the full five-year period ending in 2007. A growth of 4% is expected this year.

"The prolonged global economic slowdown has dramatically accelerated structural changes in the IT services marketplace," says Ned May, programme manager for Worldwide Services at IDC. "The end result is that many vendors must now scramble to remake and rebrand themselves to address the market's shifting priorities."

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