The total amount spent on ICT overall in the Middle East, Turkey, and Africa (META) is expected to exceed $238 billion this year, representing a 4.5% rise from 2023, according to IDC. Spending on AI is expected to reach $6.9 billion by 2027 in the META area, indicating a high market for AI in general and generative AI (GenAI) in particular. In 2024, the META region’s spending on public cloud will surpass $13 billion, indicating a 21% annual increase.
International Data Corporation (IDC) released its most recent forecasts last week as more than 400 senior executives from the most influential technology vendors, telecoms firms, and IT service providers gathered at The Ritz-Carlton, Dubai International Financial Centre for the 2024 edition of IDC Directions Middle East, Türkiye, and Africa.
IDC said in its regional estimates for the year ahead that it anticipates expenditure on telecommunications services to rise 5% YoY to $133 billion in 2024, while IT spending is expected to climb 3.9% YoY to $105 billion. IDC predicts that digital transformation expenditure in the area will surpass $59 billion in 2024 and rise at a cumulative annual growth rate (CAGR) of 15% over the ensuing years to hit the $88 billion mark in 2027, as META’s digital economy takes shape.
“Across the META region, there is a clear appetite for AI in general and generative AI (GenAI) in particular, with spending on AI forecast to reach $6.9 billion by 2027,” said IDC’s Group Vice President and Managing Director for the META region, Jyoti Lalchandani. “However, many organizations are already questioning whether they are over-pivoting on cost reduction and not focusing enough on how AI can help them to grow their revenues. We expect revenue growth outcomes to take center stage in the next 3 to 5 years and providers must track this shift carefully with their core buyers to ensure that their AI-related offerings continue to align with the evolving business goals of their customers.”
AI-related Investments
‘Preparing Your Customers for an AI Everywhere Future’ was the subject of this year’s IDC Directions Middle East, Turkey, and Africa event. According to IDC, investment on AI in the area is expected to reach $3.0 billion this year, up 32% from 2023.
IDC’s Jyoti Lalchandani moderated a panel discussion with acting Group CTO at First Abu Dhabi Bank, Srinivasan Sampath, and CTO at Landmark Group, Vinay Ramesh Kumar. She explained that end-user organizations’ priorities for AI investment will probably change in the upcoming years as they go beyond their initial focus on cost reduction.
IDC’s Global President, Crawford Del Prete, presented the event’s keynote address, ‘The AI Moment: Welcome to the Next Era of Technology’, during which he heralded GenAI’s emergence as a golden era of innovation. “The impact of GenAI’s emergence will reshape the IT landscape as companies strive to not only boost productivity, but also create new ways of meeting the needs of customers,” said Mr. Del Prete. “We are increasingly seeing companies invest aggressively in GenAI to capture an advantage and ensure they are not left behind. Indeed, by 2027, we expect global spending on GenAI to top $150 billion, accounting for around 30% of all AI-related investments.”
This was followed by a session titled ‘Preparing Your Customers for an AI Everywhere Digital Future’, during which Thomas Meyer, IDC‘s Group Vice President of Research for the EMEA region, explained the support mechanisms that tech vendors must put in place for their customers. “As GenAI adoption grows in the META region, tech providers must develop a responsible AI strategy,” said Mr. Meyer. “As part of this strategy, they need to support their customers in unlocking funding for investments and delivering ROI and significant business outcomes for prioritized use cases.”
The following were among the other noteworthy forecasts made at IDC Directions Middle East, Turkey, and Africa:
- Public cloud spending will be mostly allocated to Software-as-a-Service (SaaS), with the remaining percentages going to infrastructure as a service (IaaS) at 23% and platform as a service (PaaS) at 18%.
- Cybersecurity spending is expected to approach the $6.5 billion level in 2024, exceeding earlier growth predictions.
- In the META area, 77% of CISOs anticipate a 10% or more rise in their cybersecurity spending by 2024.
