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Spending on data centre systems is projected to decline marginally in 2024
IT spending in the Middle East and North Africa (MENA) region is expected to reach $193.7 billion in 2024, an increase of 5.2 percent from 2023, according to the latest forecast by Gartner. However, the annual growth is down from 6.6 percent growth in 2023.
“While inflation in the region has eased, organisations in the Middle East continue to face challenges due to ongoing uncertainty caused by oil production cuts, downside economic risks linked to regional geopolitical tensions as well as supply chain disruptions in key shipping routes. As a result, local organisations are becoming more cautious with their IT expenditures,” said Miriam Burt, Managing VP Analyst at Gartner.
Despite experiencing growth in 2023, spending on data centre systems - consisting of servers, external controller-based (ECB) storage, and enterprise network equipment - is projected to decline 0.3 percent to $4.81 million in 2024. According to the report, shrinking investments on data centre systems reflect decrease in regional spending on ECB storage and a shift towards alternative capabilities.
“This is due to the rise in demand of alternative options such as software-defined storage (SDS), hyperconverged infrastructure software (HCIS), and the ‘storage as a service’ model,” said Burt.
MENA IT services spending is expected to record an increase of 9.6 percent while devices spending is expected to further decline 4.5 percent in 2024 due to uneven demand for newer devices, such as mobile phones, in different countries within the MENA region.
Meanwhile, GenAI will not have immediate impact on MENA IT spending levels in 2024.
“CIOs in the MENA region are expected to increase their spending on cloud services. While AI/GenAI has some influence on cloud services spending, it is not expected to have an immediate and significant impact on IT spending levels in MENA in 2024,” said Eyad Tachwali, Senior Director Advisory at Gartner. “Regional CIOs’ focus today is primarily on everyday lower cost use cases, rather than on costly game-changing AI.”
Furthermore, global hyperscalers, with the ability to offer extensive infrastructure for storage and computing facilities for AI and GenAI, are accelerating investments in in-country data centres, particularly world-class green data centres.
“Some have launched sovereign cloud services tailored to the unique needs of specific Gulf Cooperation Council (GCC) markets,” said Burt. |
