Tourism, real estate, government to drive UAE IT spending increase by 2013
Spending in the UAE IT sector is set to increase over the next four years to reach up to US$4.7 billion - and for once, it will not be the oil industry that originates most of the increase. According to the Dubai Chamber of Commerce (DCC), expected growth in the tourism, real estate and government sectors will drive up the increase, from today's current spend of about US$3.2 billion.
However, there are some tough times ahead for the sector before it can grow again, with contractions in spending forecast this year compared to 2008. Business Monitor International, which provided the figures for the DCC, stated that overall spend will slip an average of 8%, with computer hardware the hardest-bitten segment, dropping by up to 12%. Most of the questions about the effect this will have on the economy in the UAE, bearing in mind that the IT sector provides almost 1.5% of the country's GDP, will be focused on the near term outlook.
There have been some signs of recovery in the market in the shape of arrested drops in server spending and a forecast increase in global IT budgets. The UAE seems to be weathering the storm according to the DCC, with spending flat on IT services, such as ERP, throughout 2009 - no bad thing given the decreases in spending seen in other geographic markets. Spending is then expected to rise from an estimated $816 million this year to $1.3 billion in 2013.
This high percentage of spend from IT services from the overall IT sector total indicates that the UAE will become something of a hotbed for ERP. It could show firms intent on gearing up to improve their performance throughout their supply chains through a switch to ERP or an upgrade of their current system. It may also show businesses throughout UAE are focusing on making their operations leaner and more competitive - again, no bad thing.