Gulf wired in to tech growth

Visitors to Gitex browse the latest in technology in Dubai. IT spending in the Middle East is expected to continue its rapid growth.

Forget the global economic crisis, IT spending in the Middle East is set to continue its rapid growth in the coming year, technology executives in Dubai said today, Gathered at the Gitex technology conference in Dubai, industry leaders said they expected strong growth in spending by customers as their underlying economies continued to expand and the cost-saving role of technology increased in importance.

"I'm still positive, and this is not based on feelings or emotions, it is based on data," said Gaby Matar, the group managing partner of eSolutions, one of the region's largest technology integrators. "We are dealing with the oil sector, with utilities, telecoms and government. "The way things are moving, they are keeping all their projects in place. Why? Because we are in technology - our return on investment reduces their costs, which is what they need."

Similar sentiments were echoed across the busy halls of the Dubai World Trade Centre, as thousands of technology buyers and sellers joined together in a mood that was far from despondent. Exhibitors said they were doing a brisk trade, particularly for the first half of the opening day, that is typically at its busiest on days two and three. Mr Matar said he was confident that sales at eSolutions would follow the overall trend of solid growth in IT spending in the Middle East. "The growth for the industry is supposed to be 12 to 14 per cent," he said. "Maybe it will go down by two or three points, but I am still forecasting double-digit growth." Sales at eSolutions have grown at a consolidated annual rate of 30 per cent in the past three years.

"Companies have grown substantially, and now they are stuck at a point where they need to streamline their processes," said Usman Zafar, the managing director of Al Taqnyah Business Solutions, a systems integrator. "There continues to be huge spending, because every sector is growing dramatically. Obviously this creates huge opportunities." Taqnyah has interests in areas of trade, construction and energy. Meeting the growing technology needs of businesses in the group keeps it busy, but it has also signed primarily government and financial services sector contracts in recent years.

Being the in-house technology wing of a major business group has also built a steady foundation for Al Futtaim Technologies, a unit of the Al Futtaim conglomerate that holds strong positions in a range of industries across the region. More than 75 per cent of the technology company's business comes from other members of the Al Futtaim group. "When you go into the marketplace there might be some caution - but mostly it's just talk," said Venkat Raghavan, the general manager of Al Futtaim Technologies. He does, however, believe that the underlying growth of the region will continue to support technology businesses such as his own. "Most vendors are cashing in on the infrastructure boom," he said, "and it is one of the key contributors to our business - construction, hotels, residential, this is making a big impact."

Al Futtaim Technologies announced yesterday that it would open an office in Qatar to serve its growing customer base. The regional infrastructure boom is well exemplified by Yahsat, the UAE's first satellite communications company. Yahsat is investing billions of dollars to launch and operate at least two communications satellites, addressing the demand for satellite broadcasting and communications capacity in the underserved Middle East and Africa region.

"Infrastructure is a necessity, not a luxury," said Jassem al Zaabick, Yahsat's chief executive. [e-mail]