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Middle East/Africa IT spend to rise in 2012

But how much still depends on outcomes from Arab Spring

16 January 2012 by Penny Jones - DatacenterDynamics

     
Middle East/Africa IT spend to rise in 2012
Tahrir Square, the scene for celebration following the resignation of Egypt President Muhammad Hosni Mubarak last year

IT markets in the Middle East, Africa and Turkey are likely to recover in 2012 as companies invest further in growth through virtualization, cloud computing, analytics and mobile technologies, according to analyst firm IDC.

In its Top 10 Predictions report looking at trends in 2012, IDC said growth rates in these markets suffered in 2011 as a result of political turbulence, and in some cases the Eurozone financial crisis, and some markets such as Egypt even contracted.

But this year, given stability remains, the region is set to see growth of about 12% with a collective spend above US$65bn for the year.

Qatar is to see some of the highest growth – up to 14%, while the UAE, Saudi Arabia, Turkey and South Africa are expected to see a year-on-year increase in IT spend between 7-12%. Egypt’s spend will heavily rely on the outcome of recent political turmoil as the country still transitions to democracy.

In all countries, virtualization is seen to be a focus of many data center operators, mostly because of its cost benefits, according to IDC VP and managing director for MEA and Turkey Jyoti Lalchandani.

“Adoption is still slow in the Gulf countires, where system and application availability is a big concern and often overrides the cost benefits offered by virtualization,” Lalchandani said.

“Having said that, greenfield IT projects now invariably have virtualization as a cornerstone and foundation for future expansion and possible cloud deployment; we expect South Arabia and the UAE to continue to be at the forefront of adoption.”

The Middle East and Africa is known to focus heavily on the support of growing business functions, more than any other technological benefits because business are operating in emerging markets.

Oracle, in its Index Cycle released last week which looks at how data centers are coping with big data said the Middle East in particular has seen some of the most dramatic changes in data center improvements in the global market.

Much of this, however, is driven by the need for IT to support business growth.

Oracle SVP for EMEA Hardware Strategy Luc Opdebeeck said the region also has a different focus on technology acquisition. It is not as concerned about working with established players, and has different price points to more established markets, which opens new doors for vendors.

IDC’s Lalchandani said cost is also a major driver for South Africa and Turkey, where many companies have already started to proof test virtualization while carrying out data center consolidation projects.

“Desktop, storage and application virtualization initiatives will gain momentum, particularly within large organizations,” Lalchandani said.

“The emerging African countries of Kenya and Nigeria will also see higher levels of adoption in 2012 as awareness spreads and users begin to realise the benefits.”

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