Conflicting signals on IT prospects

More mixed messages from the IT sector this week with some reports saying IT projects worth US$10 billion are being scrapped as a consequence of the recession and others claiming spending will be higher in the Middle East in spite of the crisis.

Jyoti Lalchandani, regional managing director at research firm IDC, who came up with the US$10 billion figure, reckons new IT projects in both the private and public sector have been slashed - partly as a consequence of projects worth billions in the real estate sector being put on hold.

However, his colleague, IDC chief research officer John Gantz, still sees some bright spots. He expects spending on servers to fall by 16% as virtualisation takes off and thinks companies will focus on software and services as they look to sweat existing hardware. Thanks to this activity he thinks IT spending in the Middle East and Africa will grow by 6.7% this year in contrast to a global figure of 0.5%. That's still pretty disappointing given the vast growth experienced in previous years. I guess it represents small progress and in this market I'm quite happy to settle for that.

The long-term prospects for the region also hold promise. The region's IT industry is expected to be worth US$80 billion by the end of 2012, according to research commissioned by Dubai Internet City.