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UAE IT services market to show strong growth in next five years: IDC

Smart-government projects, skills shortage mean success for ICT providers, SIs

Market research, IT Business, International Data Corporation

The UAE's IT services market showed double-digit growth in 2014, to reach $1.96bn, and similar performance is projected for the next five years, according to a report released today by International Data Corporation (IDC).

The "United Arab Emirates IT Services Market 2015-2019 Forecast and 2014 Analysis" report points to greater engagement with the IT services sector from government, healthcare, retail, transport and finance.

The growth seen in 2014 came from the "initiation of multiple mega national-infrastructure and utilities projects", IDC said in a statement.

Increased investments in data centres, enterprise applications, disaster-recovery sites, infrastructure consolidation, and refreshes of existing infrastructure in 2014 led to "project-based services [making] up the largest macro-market" during the year, while support and installation and outsourcing services also experienced strong growth.

According to IDC, new projects across a number of sectors helped systems integration services and networking consulting and integration services to grow significantly, while cost pressures, a lack of skilled resources, and the quest for IT innovation and agility helped drive increased adoption of managed and data centre services.

"Megaprojects around smart cities, national infrastructure, and utilities are expected to boost the long-term growth momentum of the UAE IT services market," said Saurabh Verma, research manager for IT services at IDC Middle East, Africa, and Turkey.

"Skills shortages and the drive to create capacity for IT innovation have spurred the adoption of outsourcing services, which will gain increased traction in the coming years. Although there are no clear indicators to ascertain the impact of falling oil prices, the possibility of budget cuts cannot be ignored. In such an event, the outsourcing services opportunity will only increase, but the traditional systems integration and support and installation services business may take a hit."