Region leads IT investment

The Middle East will be responsible for more than one in every 10 dollars of new global information technology (IT) spending this year.

The Middle East will be responsible for more than a tenth of the world's new information technology spending this year, with companies in the region boosting investments by almost 7 per cent as the sector's global budget stagnates. John Gantz, the chief research officer for IDC, a technology research and analysis firm, told chief information officers from across the region to capitalise on the opportunity presented by the global slowdown. Opening a technology summit in Dubai yesterday, he said CIOs had the chance to move the IT capabilities of their organisations ahead of competitors in the West. "You can expect a lot more attention from vendors," he said. "Your economies are so outperforming the rest of the world that you can make a good case for vendors and suppliers to make their own investments here, to support your development. You can do that in a way you couldn't even try in an economy that is plummeting." IDC forecasts global spending on IT to rise by just 0.5 per cent this year, while spending in the Middle East and Africa will grow by 6.7 per cent. The region's estimated US$63 billion (Dh231.39bn) in new spending this year will be focused largely on software and services as companies look to squeeze maximum value out of existing infrastructure. Spending on servers, long a mainstay of corporate IT budgets, is expected to drop by 16 per cent as the growing trend of virtualisation of computing resources takes hold. Mr Gantz told CIOs to expect an explosion in IT needs at large companies, as an increasing number of devices become internet-enabled, workers produce and consume more information, and new internet technologies create broader and deeper conversations between staff and customers. Each of these trends meant IT departments would become more central to answering the strategic questions facing businesses, he said. But while large corporations manage complex, maturing systems, a class of new ventures, many government-backed, are emerging across the Gulf. These companies, founded by sovereign-backed investors such as Abu Dhabi's Mubadala Development or the Qatar Foundation, have significant financial backing, aim to compete internationally in major industries, and expect to grow from tens of employees to thousands within years. "What they need to do is focus their spending on growth, on building capacity, and managing the expansion they are going through," said Kenny Wilson, the CIO of Injazat Data Systems, one of the region's largest IT outsourcers. Itself a Mubadala-backed start-up, the company has developed a niche skill in supporting new companies going through rapid growth. "There is a core bundle of specific things they need on day one," Mr Wilson said. "The ability to communicate, to manage their employees and their basic processes, things like human resource management systems." Injazat has developed a package for new businesses, which Mr Wilson described as a "Mubadala villa in a box - it's about six services, and you might not need all of them, but you'll need some of them. It's quick to provide, all hosted out of a data centre and ready on the day they start up." The company recently opened the most advanced data centre in the Middle East, on the outskirts of Abu Dhabi. The centre's Tier IV designation means it is certified to hosting information and applications considered "mission critical" by customers, with 99.99 per cent reliability. [e-mail]