Enterprise application software market in Arab Mena slowing but expected to rebound in 2011, IDC reports

According to latest IDC forecasts, the region's EAS market is expected to regain footing from 2011 onward.

Governments across the region aim to strengthen their IT infrastructures and deliver government-related services to citizens online. Public sector spending will be crucial for cushioning the impending downturn in software market demand. Banking and financial services appear to be those that will be most severely hit.

Dhiraj Daryani, Research Analyst, Software, IDC UAE - Middle East, says:

"As IT budgets tighten in 2009 and 2010, vendors will have to emphasize cost-effective solutions. During the economic downturn, natural dynamics will inevitably lead to consolidation and a resulting reduction in the number of players, providing an opportunity for vendors to support performers, to weed out non-performing partners, and to optimize channel structures."

The EAS market in the Arab Mena region expanded in 2007, with dramatic increase in spending on software solutions by enterprises and governments. Saudi Arabia, with 30.8% of the market in 2007, overtook UAE, which slipped into second place with 29.2% share. In third place, the OGCC held 18.2% share. Egypt was the fastest growing market, followed by countries in the Maghreb region. License and maintenance spending in Mena reached 33.1% year-on-year growth in 2007.

"Software as a service and cloud computing are gaining importance. Customers will require more out-of-the-box functionality specific to their industries, as well as faster implementation times," says Daryani. "A clear, crisp message of functionality and features, along with lower total cost of ownership and quick ROI, are needed to attract significant numbers of new clients."

The finance sector remained the top EAS spender in the Arab Mena market in 2007, accounting for 17.6% share of the total market. The process manufacturing sector (16.5% share) ranked second, followed by the government sector (13.1%). Other key verticals included retail, discrete manufacturing, and telecoms. The education, healthcare, and government sectors are the fastest-growing vertical markets for EAS in the Arab Mena region. However, finance and process manufacturing will continue to claim significant shares of the market during IDC's forecast period ending 2012.

IDC's Arab Middle East and North Africa Enterprise Application Software 2008-2012 Forecast and 2007 Vendor Shares (IDC #ZR01Q) provides a detailed overview of the region's market for integrated EAS suites. It includes detailed qualitative and quantitative information, analysis, and forecasts that help vendors answer key questions regarding market size, segmentation, market shares, and major economic and political factors affecting the Arab Mena EAS market.