The combined IT services market of the so-called Other Gulf Cooperation Council (OGCC) countries, comprising Qatar, Oman, Bahrain, and Kuwait, is expected to expand at a compound annual growth rate (CAGR) of 12.5% over the coming years to total $1.82 billion in 2018, according to the latest forecasts released today by International Data Corporation (IDC). The global advisory services firm expects this growth to be driven by government-led infrastructure development projects, egovernment initiatives, transformations in the transportation and banking and financial services sectors, and private sector developments as governments in the region pursue diversification strategies into non-oil sectors.
"The willingness of CIOs to procure outsourcing services is increasing across the OGCC countries," says Eric Samuel, a senior analyst for IT services at IDC Middle East, Africa, and Turkey. "And we are now at a stage where CIOs are actively evaluating the capabilities of ICT services providers to build and operate their ICT environments. Some organizations are already reaping the benefits associated with these technologies, such as improved operational efficiency, reduced capital expenditure, and enhanced ICT management. And as the outsourcing services offered by ICT services providers mature over the coming years, we expect the adoption of such services to increase notably."
IDC's latest data shows that the OGCC IT services market reached a total value of $1.13 billion in 2014, up 11.7% on 2013. Qatar presented the strongest growth in the region, with IT services spending fueled by large-scale, infrastructure-driven, and government-led projects in the transportation, healthcare, and education sectors. Qatar will continue to have the fastest growing IT services market of all the OGCC countries, and IT services spending in the country will surpass Kuwait's total by the end of this year. Qatar is also expected to lead IT services spending in the region through 2018.
The competitive landscape in Qatar is changing at a rapid pace. An increasing number of global ICT companies are now competing with local ICT providers, either directly or through partners, as they strive to capitalize on the myriad ICT opportunities present within the country. However, this increasing competition is exerting downward pressure on project pricing, which is impacting the margins of many ICT providers in the region. ICT project pricing is also becoming more complex as greater numbers of organizations expect their ICT partners to develop and implement solutions that are capable of solving their specific business challenges rather than merely meeting their operational requirements.
"IT services maturity has significantly improved in the OGCC countries, and both public and private sector organizations are looking at implementing complex IT solutions while addressing the challenges associated with finding and retaining experienced in-house IT personnel," continues Samuel. "As a result, organizations are expected to take a cautious approach to CAPEX outlays when implementing ICT solutions, and this is also expected to drive spending on hosting, cloud, and managed services over the coming years."
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
IDC in the Middle East, Africa, and Turkey
For the Middle East, Africa, and Turkey region, IDC retains a coordinated network of offices in Riyadh, Casablanca, Nairobi, Lagos, Johannesburg, and Istanbul, with a regional center in Dubai. Our coverage couples local insight with an international perspective to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 125 analysts, consultants, and conference associates across the region.
© Press Release 2015
