BMI View : High incomes and a consumption culture combine to make the UAE one of the most lucrative global IT markets in per capita terms, with retail spending a particular strength, Traditionally IT adoption by the enterprise sector has been for basic applications, but that is changing. Etisalat's adoption of Microsoft Lync, which can connect people across Windows and other operating systems, including mobile devices, and the Federal Authority for Human Resources' (FAHR) implementation of IBM MobileFirst support our view that heavy investments in next generation mobile broadband networks and the proliferation of smartphones has laid the foundations for growth in the region's enterprise mobility solutions market. However the rising number of devices and migration to cloud computing solutions expose organisations to a growing number of cybersecurity threats. Improving awareness of these threats combined with increased government support will underpin robust demand for cybersecurity solutions in tandem with cloud-based IT services.
Headline Expenditure Projections
Computer Hardware Sales: AED8.4bn in 2014 to AED8.4bn in 2015, -0.7% in local currency terms. Decline in tablet volumes, and a sluggish market for desktops and notebook after upgrades brought forward to 2014, will result in a minor contraction in market value in 2015.
Software Sales: AED3.1bn in 2014 to AED3.3bn in 2015, +7.1% in local currency terms. The UAE is one of the region's fastest growing ERP markets as modernisation initiatives continue in an effort to increase international competitiveness. Cybersecurity will be another important growth driver.
IT Services Sales: AED5.3bn in 2014 to AED5.7bn in 2015, +8.1% in local currency terms. Managed services will be a leading growth area, with growth of cloud computing and real-time analytics accelerating.
Key Trends & Developments
BMI believes that through its partnership with Meraas, Aliyun (the datacentres and cloud computing arm of China-based e-commerce giant Alibaba) is well-placed to benefit from the emergence of smart cities and related infrastructure over the next decade in the GCC states. The company's proven capabilities in processing complex 'big data' systems will make it an attractive partner for players across multiple verticals and, potentially, give parent Alibaba access to a relatively underserved e-commerce market. The as-yet unnamed joint venture will be based in Dubai and will create new applications, cloud computing architecture and 'big data' tools for local and multinational organisations operating out of the UAE initially, and target the GCC region. These solutions will be integrated into next-generation transportation, communications, infrastructure, power, government services and urban planning projects as authorities orchestrate the development of smart cities, starting with Dubai.
Rising awareness of cyberthreats and increased government support for development of cybersecurity solutions will underpin the segment's strong growth over the next five years, BMI believes. Research by Symantec's Attack Investigations Team showed that the UAE consistently had the highest number of ongoing infections detected in the Middle East on a monthly basis in the twelve months leading to June 2014. According to Microsoft, the UAE compared favourably to the Middle East as whole in terms of malware infection rates, but as of Q213 around 13 out of every 1,000 computers were infected in the nation, more than double the worldwide average of 5.8. Meanwhile, according to a survey commissioned by F5 Networks published in 2015, 82% of surveyed IT decision-makers in the UAE believed their organisation was 'very' or 'extremely' vulnerable to cybercrime, hacking and hacktivists, while only 8% were confident that their organisation had consistent IT security measures across their entire IT network. A key challenge for these organisations is the rising complexity of cyberattacks, which is partially driven by the increasing penetration of smartphones and tablets and the shift toward cloud computing.