BMI View: We maintain a modestly optimistic outlook for the Saudi IT market over the medium term in our Q2 16 quarterly report update . We believe 2016 will witness the final year of the IT market contraction. The steep decline in the oil price in 2014 and 2015 has put Saudi Arabia's economy on a lower growth trajectory and as a result we downgraded our IT market outlook in the Q116 update. We forecast total spe nding will grow at a CAGR of 1.9 % over 201 6-2020 to reach SAR43.7bn in 2020 . The hardware segment is forecast to underperform over the medium term as a combination of economic uncertainty and market maturity sees spending contract, though volume growth is expected to return in the final years of the forecast. The services market is the bright spot in our outlook, with cost efficiency and flexibility generating solutions expected to see the strongest demand from local enterprises looking for manoeuvrability in an uncertain economic environment. This is even true for the oil and gas segment, where low prices could actually prove a catalyst for a new generation of investment in smart services to increase efficiency and ensure margin maintenance in a depressed global market.
Latest Updates & Industry Developments
Computer Hardware Sales: SAR18.3bn in 2016 to SAR17.9bn in 2020. A weak economic backdrop will combine with market maturity and a dynamic of price erosion to see the hardware segment underperform over the medium term.
Software Sales: SAR8.6bn in 2016 to SAR10.3bn in 2020. While projects face being deferred or scaled back in the oil sector, enterprise software adoption will continue to deepen among small- and medium-sized enterprises.
IT Services Sales: SAR11.9bn in 2016 to SAR15.5bn in 2020. Solutions offering cost savings and flexibility to enterprises in an uncertain environment such as outsourcing, cloud computing and smart services expected to underpin outperformance.
|Maturity And Low Consumer Confidence To Hit Hardware Demand|
|e/f = BMI estimate/forecast. Source: BMI|
The Saudi Arabia Information Technology Report features BMI Research's market assessment and independent forecasts covering personal computers and software; semi-conductors, memory chips, integrated circuits and general components; the internet and IT solutions. It analyses analyses regulatory changes (licensing, customs and intellectual property protection) and competitive landscapes comparing IT companies by products, sales, market share, investments, projects and expansion strategies.
BMI's Saudi Arabia Information Technology Report provides industry professionals and strategists, corporate analysts, IT associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the IT industry in Saudi Arabia.
- Benchmark BMI's independent IT Industry forecasts for Saudi Arabia to test other views - a key input for successful budgetary and strategic business planning in the Saudi IT market.
- Target business opportunities and risks in Saudi Arabia's IT sector through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Saudi Arabia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering IT, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the IT sector and within the broader telecommunications, political, economic and business environment.
BMI Industry Forecast
Historic data series (2010-2013) and forecasts to end-2019 for all key industry and economic indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
- IT Sector: Industry value (USDmn); IT sector contribution to GDP (%); value of hardware, software and services industry (USDmn); PC, peripherals and software imports and exports (USDmn); PC, peripherals and software sales (USDmn); number of PCs (‘000); PCs per 100 inhabitants; internet users (‘000); internet users per 100 inhabitants; broadband subscribers (‘000); broadband subscribers per 100 inhabitants.
- Economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).
Information Technology Risk Reward Index
BMI’s Risk Reward Indices provide technology manufacturers, service providers, and IT vendors/leasing agents looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Country Market Overview
Structure, size and value of the industry sectors including hardware, software and services; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments and government authority.
BMI Macroeconomic Forecast
BMI forecasts for all headline macroeconomic indicators to end-2019 including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Full analysis of the competitive landscape within the hardware, software and services sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Cross-border analysis of country markets in the region, commenting on IT penetration (PC and internet) and market growth drivers (IT market size and IT market compound growth).
The information Technology Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.