GCC IT focus to shift to software and services (page 1 of 2)

Speaking to IT heads at the event, IDC said that in early 2008 it had predicted that global IT spend for 2009 would grow by around 5.9%.

By late 2008, the global economic slump had forced it to revise downwards its predictions for 2009 and 2010 to a growth of 2.6% and 4.5% respectively.

Now, IDC believes IT spend will have declined 8.2% by year end, recovering to a growth rate of 4.4% in 2010.

Per capita, the UAE remains the biggest IT spender in the Middle East, closely followed by Qatar. But while GCC IT spend is expected to grow around 5.8% this year and 8.3% next year, it is a very different picture for the UAE, where IT spend is expected to have slumped by 11.6% this year, recovering to a 7.6% growth in 2010.

Currently, much of that IT spend is on hardware, rather than software or services, although this is expected to change. Post financial crisis, IDC believes the IT outlook in the GCC and wider Middle East will begin to change. Attention, said Naser Sha'sha'a, a Project Manager at IDC, will shift towards software as a service, Cloud computing and managed services. Equally, there will be tighter integration between IT and the other business functions and more desire to save money through being more energy efficient.

Add to that an explosion in bandwidth requirements, growing storage needs and a desire to implement different communications technologies, and, post crisis, CIOs, IT managers and their staff will have their hands full.

'We can no more look at IT as a separate entity to the organisation,' said Sha'sha'a. 'IT is an enabler and should be working hand in hand with the organisation.'

ROI and TCO

That mean priorities will shift towards return on investment and total cost of ownership, as well as the ever present concern about IT security. Anything that runs on IP, said Sha'sha'a, will 'end up in IT's lap'.

KS Parag, Regional Director (Middle East) at Value Added Distributor FVC, said the challenges for IT heads would be many in the coming year, as they look to ensure that with smaller budgets they provide better ROI. Tips for IT heads, he said, included making friends with the financial director, thinking longer term IT strategy, keeping explanations simple - especially when talking to the boardroom - and delivering projects on time and in budget.

Finally, he said IT heads should keep their explanations simple. In other words, 'talk about technology and the value it adds, how it will reduce costs and improve business efficiency', he said, and not about how a piece of technology works.

As demands on IT grow, a weak link will be in-house skills, particularly if budgets and headcount is still being squeezed. Where many organisations in other parts of the world have looked to outsource certain functions and have embraced ideas such as managed services and software as a service - both as a way to improve efficiencies and better predict and manage costs - there has been reluctance in the Middle East to follow suit. In particular, there is suspicion about allowing a third party manage a company's data on-site or moving that data off-site and having it managed by an external supplier.

Offsite hosting

A number of IT suppliers and companies offering hosted services say that attitude is now beginning to change.