North Africa's allure

The North Africa IT market is this year expected to attract more investments from global technology vendors, regional distributors and solution providers. However, uncertainty in some countries has cast doubt on the long term charm of the IT industry in the the Maghreb region

Tags: Fortinet IncorporationIngram Micro (http://www.ingrammicro.com/)NEXThink (www.nexthink.com/)Western Digital Corporation
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North Africa's allure
By  Manda Banda Published  February 24, 2015

With stability returning to some countries that were affected by the Arab Spring of 2011, the IT sector in North Africa is looking for a fresh start.

Despite the challenges in Libya, Egypt and Tunisia, the region has not only continues to attract interest from IT players from the Middle East and beyond, it has steadily been rolling out ambitious projects in IT, smart cities, telecoms and mobility sector.

This it seems has led to many to look at the region in a positive light given the large youthful population residing in North Africa.

And although the Arab Spring did dent the short-term economic growth outlook for the region, IDC said the market expanded 3.8% in the third quarter of 2014 to $522.9m, with much of the growth spurred by infrastructure deals within the oil and gas, telecoms and government verticals.

IDC expects to see an increase of investments, with optimistic growth forecasts bringing the region up to its pre-crisis investment levels within the next couple of years. The analyst firm anticipates that next-generation integrated ICT services that utilise large-scale installed infrastructure will grow in order to meet increasing demand from businesses that prioritise quality and efficiency of services.

At Middle East and Africa level, IDC said spending on ICT products and services will cross the $270bn mark in 2015 and the IT market is expected to grow 9% year on year in 2015.

“Converged systems will gain prominence in 2015 and serve as the building blocks to software-defined environments across the MEA region in 2016 and beyond,” said Megha Kumar, research manager for software at IDC Middle East, Turkey, and Africa.

“In the Middle East, demand will be particularly strong from smart city initiatives and the implementation of large-scale transportation projects, while in Africa the lack of legacy systems will enable organisations to leapfrog to the latest converged technologies as they strive to ease the pressures of ongoing skills shortages.”

Fouad Amrani, country manager, North Africa at Ingram Micro’s Aptec, said 2015 will see North Africa witness a period of solid growth of the IT market after many difficult years due to the 2008 global financial crisis and 2010 to 2013 Arab Spring.

Amrani said an estimation of close to $10bn is the figure that is being talked about the size of the combined IT market for Algeria, Morocco and Tunisia by analysts.

He added that the main influences shaping IT adoption across North Africa include: mobility solutions, 4G adoption, cloud growth and adoption, big data and IT security as organisations big and small, public, government and private move to protect their IT infrastructure from cyber-criminal activities.

Khwaja Saifuddin, senior sales director, Middle East, Africa and India at storage solutions vendor WD, said the North Africa IT market is on an upward trajectory. Saifuddin added that WD has had positive results from quarter to quarter and this looks likely to continue for the foreseeable future. “As an emerging market, WD is very excited about the business prospects of North Africa in 2015 and will continue investing in that market with the goal of driving sustainable business results,” he said.

Saifuddin said while there is a lot of market activity in the IT sector in North Africa, it’s a challenge to estimate the actual size of the market because while vendors and their appointed distributors address the market and can track their numbers, there is also a significant parallel channel that is selling to this region. “Without knowing those other numbers, it is impossible to properly estimate the size of the market. However, if you look at the sheer number of people and businesses in North Africa, it’s safe to say the size of the market is quite huge,” he said.

Franck Couet, major accounts manager for North Africa at security solutions vendor Fortinet said while the IT market in North Africa is expected to grow this year, most of that growth will depend on the political and economic stability of those countries, as most of them are holding elections in 2015. “As a result, IT projects have been slowed down or in some cases been put on standby,” he noted.

That said, Couet pointed out that government spending across the region is what will be the main driver of growth. “Most governments are investing in politics in the TIC, e-Gov,” he said. “These countries will become dominant actors and contribute to the groth of IT development in the region.”

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