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MEA external storage market’s Q1 slump attributed to seasonal factors

YoY decline of 2% is precursor to surge, says IDC

IT Business, Market research, Storage and backup, Data centres, International Data Corporation

The Middle East and Africa (MEA) external storage market may have suffered a marginal 2% year-on-year decline in revenue during the first quarter of 2014, but the downturn can be attributed to an annual quirk in the market according to International Data Corporation (IDC).

Referencing its 'EMEA Quarterly Disk Storage Systems Tracker', the global research firm noted that external storage revenue in MEA contracted to $229m in Q1 2014, but referred to the decline as a "typical slump before the surge". Terabyte capacity, meanwhile, was up 38% over the same period.

''The shrinkage in the market can be attributed to the fact that most countries within the region have seasonal growth trends, with the first quarter being the slowest as budget allocations and investment plans have yet to be finalised in a number of key sectors," said Adriana Rangel, research director for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey.

"The second half of the calendar year usually accounts for the higher share of yearly enterprise systems investments, with the final quarter being the strongest."

The UAE saw a 5% increase in external storage revenue when compared to Q1 2013, with projected revenues highlighted by investments within the telecommunications and government sectors. Saudi Arabia, meanwhile, suffered a downturn of 6% over the same period.

"This decline was mainly due to key pipeline projects within the country's oil and gas sector being delayed toward mid-year implementations," said Swapna Subramani, a senior research analyst at IDC Middle East, Africa, and Turkey.

Other GCC countries (Bahrain, Kuwait, Oman, and Qatar) posted impressive growth in each quarter of 2013, but witnessed a combined year-on-year decline of 8% during the first quarter of 2014.

"The only positive performance within this group was Oman, where several ongoing projects within key government ministries kept the investment fervour upbeat," Subramani added.