Gartner Forecasts MENA IT Spending to Grow 5% in 2024
Generative AI Expected to Have Limited Impact on MENA IT Spending Levels in 2024
According to the latest forecast by Gartner, Inc., IT spending in the Middle East and North Africa (MENA) region is projected to reach $193.7 billion in 2024, marking a 5.2% increase from 2023. This growth, however, is a slight deceleration from the 6.6% increase recorded in 2023.
“While inflation has subsided, organizations in the Middle East are navigating challenges from oil production cuts, economic uncertainties tied to regional geopolitical tensions, and supply chain disruptions. Consequently, these factors are prompting local organizations to exercise more caution with their IT expenditures,” stated Miriam Burt, Managing VP Analyst at Gartner.
Shifting Trends in IT Spending
Despite previous growth, spending on data center systems is expected to decline by 0.3% in 2024, driven by a reduced focus on external controller-based storage (ECB) in favor of software-defined storage (SDS), hyperconverged infrastructure software (HCIS), and storage-as-a-service models.
Table 1. MENA IT Spending Forecast, 2023-2024 (Millions of U.S. Dollars)
| Segment | 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) |
|---|---|---|---|---|
| Data Center Systems | 4,826 | 5.5 | 4,809 | -0.3 |
| Devices | 28,379 | -1.8 | 27,092 | -4.5 |
| Software | 13,555 | 8.0 | 15,229 | 12.3 |
| IT Services | 17,338 | 4.6 | 19,016 | 9.6 |
| Communications Services | 120,026 | 9.0 | 127,584 | 6.3 |
| Overall IT | 184,124 | 6.6 | 193,731 | 5.2 |
Source: Gartner (June 2024)
IT Services and Security to See Significant Growth
MENA's IT services spending is projected to rise by 9.6% in 2024. Burt noted that IT leaders are prioritizing expenditures on professional and consulting services to facilitate cloud migration, AI, generative AI (GenAI), and IoT implementations, as well as data monetization opportunities from these technologies. Security and 'Anything as a Service' (XaaS) models are also significant growth drivers in this segment.
Conversely, devices spending is anticipated to decline by 4.5% in 2024 due to uneven demand across the region.
Limited Immediate Impact of Generative AI
Generative AI is not expected to have a significant immediate impact on IT spending levels in MENA for 2024. Eyad Tachwali, Senior Director Advisory at Gartner, explained, “CIOs in the MENA region are more focused on practical, lower-cost use cases rather than expensive, transformative AI applications.”
Global hyperscalers are investing in local data centers, including green data centers and sovereign cloud services tailored to specific Gulf Cooperation Council (GCC) markets, to support AI and GenAI infrastructure needs.
Gartner’s IT spending forecast utilizes a comprehensive analysis of sales data from over a thousand vendors, combined with primary and secondary research, to deliver insights on market opportunities and challenges. Detailed findings are available in the “Gartner Market Databook, 1Q24 Update.”
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