Dubai, January 26, 2014 - International Data Corporation (IDC) today announced its top 10 predictions for the Middle East business network services market in 2014. IDC's predictions address the issue of regional telcos gearing up to capitalize on the huge business potential offered by newly launched government programs, and explain how they are realigning both their organizational structures and business models to play a central role in the evolving ICT and digital services landscape. 

"The positive economic outlook, particularly for the Gulf Cooperation Council (GCC) markets, continue to accentuate local business potential and provide significant opportunities for ICT solutions vendors," says Paul Black, director of telecommunications and media for IDC Middle East, Africa, and Turkey. "These trends are expected to continue in 2014, backed by government programs to improve healthcare, education, and governance infrastructure. Furthermore, the development of smart cities, as well as the expansion of multinational companies in the Middle East, will increase pressure on local businesses to become more mature in their use of ICT applications. Most telcos are adopting a two-pronged approach to business transformation; firstly, they are expanding their ICT portfolios and service delivery capabilities by forging key partnerships, and are leveraging their traditional strengths such as diverse sales channels and infrastructure assets. Secondly, they are acquiring larger roles in the digital media domain by setting up dedicated business units."

IDC's Middle East Business Network Services Top 10 Predictions for 2014, as presented today in a Webinar by Hasan Sandila, senior research analyst for telecommunications and media at IDC Middle East, Africa, and Turkey, comprise the following:

1. A 'Mobility First' Mindset Will Become Reality and Drive the Development of a Mobility Ecosystem. Globalization - partly facilitated through the use of social media, connected applications, and mobile resources - will continue to drive the acceptance of enterprise mobility in 2014. Growing economic activity, backed by the focus of individual governments on diversifying their economies beyond traditional industries, will continue to push end-user organizations, particularly small and medium-sized businesses (SMBs), to acquire new, mobility-oriented ICT solutions. Businesses will remain enthusiastic about the cost optimization and process efficiency benefits delivered through mobility solutions. A key finding of IDC's annual enterprise communications survey confirms that Middle Eastern businesses of all sizes are looking to mobilize employees and optimize their internal processes for mobile environments. The mobility ecosystem in the Middle East will expand as new players continue to exploit local opportunities. Players such as device manufacturers, network infrastructure vendors, application developers, security solutions providers, and telcos will remain keen on expanding their footprints in the mobility solutions market.

2. The Integration of Mobility with Intelligent Solutions Will Remain in Focus for Enhancing Process Efficiencies. The use of intelligent solutions such as M2M, radio frequency identification (RFID), and unified communications (UC) alongside mobility is expected to gain prominence in 2014. The integration of mobility with such business intelligence (BI) solutions can provide an organization with the necessary tools for optimizing processes, fostering employee collaboration, enabling faster decision making, and improving operational efficiency. However, such mobility systems are complex and require integration scenarios with multiple interfaces, technologies, and stakeholders. For this reason, IDC believes that these solutions will see initial deployments from large businesses in verticals such as oil and gas, transport logistics, and retail in 2014.

3. Business-to-Consumer (B2C) Mobility Applications Will Gain Traction. The increasing usage of smart devices in 2014 will continue to motivate businesses to launch dedicated customer applications across various verticals. In addition, organizations now view B2C applications as a means of differentiating themselves in a competitive market. These applications not only open new customer touch points, but can also be used to implement process mobility solutions for customer complaints and feedback. mGovernment will be another important factor in the growth of B2C mobile applications in 2014 and beyond. Many regional governments have well-defined egovenment plans that are increasingly being extended to mobile platforms, with overall objectives of delivering a better user experience and expanding the reach of egovernment services.

4. Telcos Will Acquire Complex IT Services Skills and Align Their Strategies to Become End-to-End ICT Service Providers. IDC is of the opinion that the introduction of managed services and vertical-specific offerings will be one of the logical evolutionary steps that will help telcos gain a better understanding of their role in the provisioning and delivery of ICT solutions. Having taken such steps, telcos in the Middle East will move up the value chain to become either providers or facilitators of end-to-end ICT enterprise solutions. Operators will move beyond merely launching ICT offerings to forming clear strategies aimed at acquiring a broader role in the ICT solutions value chain. Partnerships will also flourish as operators move toward offering complex IT services. In addition, acquisitions that boost the IT service delivery capability of telcos, or expand their portfolios of professional services, cannot be ruled out. Furthermore, opportunities across the digital services spectrum such as mgovernment, mhealth, m-education, and smart cities will be closely monitored by telcos as they move up the ICT value chain. As a result, M2M, cloud, mobility, smart cities, and industry intelligent solutions will remain key technology focus areas for telcos in the coming years.

5. Operator Business Transformation Will Continue Through the Development of Industry-Intelligent Solutions. Vertical-specific solutions, along with managed ICT services, are integral to the transformation of telcos into end-to-end ICT providers. Packaging horizontal solutions for vertical consumption has typically remained the prime go-to-market strategy for telcos. However, they are now looking at developing fully verticalized offerings (also referred as industry-intelligent solutions). In 2014, such offerings will prominently feature in the business transformation strategies of regional operators. Furthermore, professional services developed around industry-specific solutions will assist telcos in acquiring complex IT services skills.

6. Telcos Will Continue Strengthening Their Role in the Cloud Services Market. As anticipated in last year's predictions, Middle East telecom operators have approached cloud computing with vigor in the last few months. For 2014, IDC maintains a positive outlook for the cloud services market and believes regional telcos are well placed to exploit the cloud opportunities on offer. In fact, cloud computing leverages several traditional telco capabilities, such as datacenters and multiprotocol label switching (MPLS) networks, and provides them with much-needed revenue-diversification opportunities. IDC believes that telcos in the Middle East will take a central role within the cloud ecosystem by controlling network (as well as non-network) aspects such as delivery, storage, solutions, and support services. Investment in datacenters will remain a focal point of operators' investment strategies as they look to add a new cloud services layer to their operations. Telcos may also aim at becoming 'cloud brokers' or 'cloud aggregators', whereby they aggregate services from different cloud providers and provide customers with a single customer user interface.

7. Telcos Will Expand Their Managed Services Portfolios with Infrastructure- and Security-Focused Offerings. The major integrated telecom operators in the GCC countries have all introduced some form of managed services. In fact, there has been a consistent growth in demand from organizations in the Middle East for OPEX-oriented services such as managed services. More businesses are now looking at engaging third-party service providers for the management of their ICT infrastructure, security, and applications due to the lower cost implications and the fact that employing such an approach enhances their ability to focus on their core business processes. Telecom operators are well placed to capitalize on these opportunities due to their internal networks and extensive IT operational experience, their ability to provide billing integration, and their established relationships with both large enterprises and SMBs.

8. The Increasing Complexities of Network Management Will Shift Campus Networks Toward Software-Defined Network (SDN) Capabilities. Campus networks are integral to IT departments; however, their management remains a major headache for CIOs. Enterprise mobility and the bring-your-own-device (BYOD) phenomenon, together with the proliferation of cloud applications, real-time multimedia services, and unified communication applications, are all adding to management complexities, making network management and service configuration a major challenge. As such, the need for a comprehensive approach to security across the entire enterprise IT infrastructure, as well as the management of the user experience across multiple endpoints, will remain a key priority in 2014. These network management complexities will motivate businesses to make the switch from configurable to programmable networks. It should be noted that 2014 will only mark the beginning of the transition to SDN, which enables network services and network infrastructure to dynamically adapt to the needs of specific applications. To a certain extent, the transition will be fueled by providers that introduce SDN or agile networking-ready products to the markets of the Middle East.

9. Burgeoning Demand for Internet-of-Things (IOT) Applications in Select Verticals to Continue, While Telcos Aim for a Central Role in the M2M Value Chain. Driven by the need for enhanced process efficiencies and reduced overheads, the deployment of M2M solutions has become a key technology focus area among Middle Eastern businesses. In 2014, regional telcos should aim to launch more innovative, industry-specific M2M applications and acquire improved application development capabilities. In order to do this, telecom operators will have to take the central role in developing a technical ecosystem around M2M, including devices, innovative applications, and delivery platforms; they should also provide business intelligence and/or analytics services on top of these applications. In line with IDC expectations, mobile M2M-centric IOT applications are becoming more vertically aligned in the Middle East. Operators are increasingly looking for ways to target specific industries such as automotive, healthcare, logistics and transportation, security, smart metering, and energy by putting M2M at the center of their value propositions.

10. The Growing Maturity of SMBs Will Unlock New Revenue Opportunities for Telcos. Within the GCC in general, and the UAE, Qatar, and Saudi Arabia in particular, the SMB segment is home to the largest number of total businesses. IDC has seen growing demand from these SMBs for ICT services with the aim of expanding their businesses, improving their service propositions, and gaining a competitive advantage. ICT adoption by SMBs in the region has traditionally been centered on basic connectivity and cost-efficient or freely available productivity applications. However, this trend is slowly expected to shift toward more mature services in 2014, with SMBs realizing the importance of more mature technologies in improving process efficiencies and achieving a competitive advantage. Furthermore, IDC believes that local government efforts to support the SMB segment across the Middle East will increase overall ICT usage by such businesses and offer plenty of opportunities for ICT providers in 2014. Operators will redesign their existing portfolios and identify areas for service innovation to specifically target SMBs.

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.

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© Press Release 2014