According to a recent report by market research company IDC, although established domestic IT service providers continue to dominate the UAE market, the competitive landscape is changing, with global IT vendors and telcos becoming much more active in the country’s IT services space.
“This relatively small market has shown a tendency to favor large integrators that can offer services across multiple areas and service lines, and they will most likely retain the lion’s share of the market in the foreseeable future,” says Rima Ruhman, research manager for IT Services, IDC Middle East, Africa, and Turkey.
“However, the UAE market is very dynamic, and smaller players can grab a share if they capitalize on specialized services as the technology becomes more available and affordable. Also, as the market matures, especially in regard to managed services and cloud computing, international players are more likely to be attracted by the growing demand.”
Spending on IT services in the UAE is expected to expand 10.2% year on year in 2011, after 9.3% growth in the previous year, when it totaled $1,170 million. Investments in IT services have continued to grow, as a result of businesses realizing the long-term benefits of managed services, systems integration, and new hosting models. UAE companies are moving from internally managed non-standard IT systems (which are difficult to operate and maintain) to the standardized IT services (mostly related to hardware but also software) that are available in datacenters.
MDS Holding was the leading IT services provider in the UAE in 2010, with IT services revenue of $167.03 million and 12.8% market share. Injazat Data Systems placed second, with $84.23 million and 6.4% market share. Wipro ranked third, with $66.01 million and 5.0% share. CNS and Emitac rounded out the top five IT services providers in the market in 2010, with 5.0% and 4.8% shares, respectively.
Although companies in the UAE have traditionally shown a very strong preference for internal IT management, IDC has registered a growing interest in and adoption of services, particularly managed services, as decision makers are more willing to relinquish total control in exchange for reduced capital expenditures.
“Adopting a new technology just to be on the bleeding edge is mostly a thing of the past, given the tight operating budgets in the current economy,” says Ruhman. “Today, the market demands that IT solutions not only support the mission and vision of the organization, but also demonstrate an ROI that justifies the IT investment. Investments must be viable in terms of cost and deemed essential for the company to survive and thrive.”
IDC’s Competitive Profiles and Analysis of Leading IT Services Players in the United Arab Emirates, 2011 (Doc # ZS13T) study presents the top 83 IT services providers in the UAE, including their market shares based on their respective performances in 2010. Furthermore, it examines in great detail the performance of the top 10 IT services providers in the country. The study presents these companies in IDC’s Leadership Grid, which contains current competitive positioning in 2010 and illustrates the changes in position that are likely to occur over the forecast period. The study also includes market size and shares for the top 10 services vendors by IDC’s 13 foundation market categories.
Tuesday, January 24- 2012 @ 13:40 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.