24 August 2016
DOHA: The Information Technology (IT) sector in Qatar is unlikely to meet growth expectations this year and industry sources don't expect much improvement next year either, though the country has been forecast to be one of the best-performing IT markets in the region.

According to BMI Research, demand for computer hardware held up better in Qatar than most commodity reliant markets in 2015, and Qatar's medium-term outlook was stronger across the whole IT market than the rest of the GCC. "Major project spending by the government will drive IT services demand as Qatar engages in major modernisation initiatives for the economy and public services, particularly in infrastructure for the FIFA World Cup in 2022. "The hardware outlook is weaker, with retail market saturation placing a limit on growth potential and vendors are reliant on replacement sales. We forecast a compound annual growth rate (CAGR) of 5.3 percent for the whole IT market over 2016-2020 to a value of QR4.9bn," it had stated in its analysis on the country's IT sector.

In a report by Research and Markets, analysts forecast that Qatar's IT market would grow at a CAGR of 12.37 percent over 2014-2019. The report covered the existing scenario and growth prospects of the IT market in Qatar for the period 2015-2019.

The IT market is categorised into three segments -- hardware, software and IT services.

Some key vendors operating in the local IT market see very few signs of vibrancy.

"Growth prospects seem bleak this year and next year also looks tough. The software and hardware markets look saturated. In the IT services segment, cloud services have some demand, because it is subscription based and firms don't have to purchase any hardware or software," said Ahsan Khan, Sales Manager of Almana Computer Services. Like other prominent vendors in the market, Almana Computer Services represents most global IT brands. It is a Qatari IT systems integrator and solutions provider.

Jacob George, the Sales Manager of Qatar Computer Services (QCS), another prominent vendor, almost echoed Khan's views. "There has been no growth in the IT sector so far this year," he says.

According to George, last year there was, at least, some growth. "We are a systems integrator and with budgetary cuts and projects being put on hold, IT sector growth in general has been affected. Cloud services are picking up and businesses are moving towards these services because of the cost factor, ease of use and availability of services at all times."

George said, although SMEs are inclined towards cloud services, QCS does not cater as much to the SME sector as it does to big enterprises.

George is, however, more positive about 2017. "Based on current projects in the country and the forecasted demand for IT-related services and equipment 2017 has to be a better year," George added.

The Research and Markets report, IT Market in Qatar 2015-2019, was prepared on the basis of an in-depth market analysis with inputs from industry experts.

The report states: "In traditional delivery models, organisations spend a lot of time establishing connections with different systems to achieve an integrated flow of information. Companies worldwide adopt cloud computing solutions to focus on their core business activities. The responsibility and accountability for complex IT tasks, therefore, rests with the cloud service providers. Many SMEs prefer public cloud service as vendors connect their systems to their organisation's IT systems. Therefore, in-house IT departments are relieved from setting up their own IT infrastructure. The SMEs are adopting SaaS and IaaS cloud services."

© The Peninsula 2016