New Market Research Report: United Arab Emirates Information Technology Report Q3 2013

We retain a positive growth outlook for the UAE's IT market, despite a weaker economic outlook in H213. We expect overall economic growth to slow in the second half of the year as net exports fall on the back of lower oil prices during that period. However, we expect the impact of this development on the IT market to be counterbalanced by positive consumer and business sentiments towards the country, as evidenced by notable improvements in the real estate and equity markets. We also retain our view that government spending will increase by 3% in 2013, a situation that will drive growth in IT spending across key sectors, including education, healthcare, utilities, banking, telecoms and transportation.

Headline Expenditure Projections

Computer Hardware Sales: AED7.59bn in 2012 to AED8.16bn in 2013, +7.5% in local currency terms. PC market recovered in H212, and we expect growth to be driven higher in 2013 due to demand for tablets, hybrids and ultrabooks.

Full Report Details at
- http://www.fastmr.com/prod/648294_united_arab_emirates_information_technology.aspx?afid=303

Software Sales: AED2.58bn in 2012 to AED2.85bn in 2013, +10.3% in local currency terms. Upgrades to Microsoft's Windows 8 OS will boost spending in 2013, while the UAE is also one of the region's fastest growing enterprise resource planning (ERP) markets.

IT Services Sales: AED4.26bn in 2012 to AED4.74bn in 2013, +11.3% in local currency terms. Managed services will be a leading growth area, with growth of cloud computing and real-time analytics accelerating. Risk/Reward Ratings: The UAE's score was 65.4 out of 100.0. However, the country dropped to third position, from second, in our latest regional RRR table, behind Qatar and Israel.

Key Trends & Developments

Etisalat and du are expanding their cloud computing services portfolio with major partnerships signed during Q213. In June 2013, Etisalat announced plans to launch its first cloud computing service in the UAE. The service, called 'Cloud Compute', distinguishes itself by offering a pay as you go model, easy to scale up or down depending on business needs. Also in June, du announced the expansion of its managed services portfolio with the launch of a new enterprise solution, Business Cloud Platform, in partnership with Encloud. The service offers du enterprise customers access to a broad range of flexible cloud services, covering infrastructure platform and software.

Compared with European markets, there is much more opportunity for Middle Eastern telecoms operators to move into cloud computing and IT services as there are only a handful of third party companies already providing these types of services. Furthermore, telecoms operators are in a good position to leverage their huge investments in key infrastructure, including fibre-optic networks, data centres and links to a number of submarine cable systems, to deploy IT-based services for businesses in the country.

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