Gitex shows Middle East IT sector in growth phase

Growth is the word on everyone's lips. The Gitex show itself was 20% bigger than the year before, and the completion of the splendid new Dubai Convention Centre came just in time to add to the floor space.

At a moment when the IT industry worldwide is still struggling to emerge from three years of recession, the Middle East is a picture of health. Top manufacturers expect around 10% growth in sales this year and are hopeful for better in 2004.

Yet global market pressures can not be avoided here. For example, prices of IT products are down, reflecting worldwide competition between manufacturers and software houses.

There has also been consolidation in the industry with famous names disappearing, like Compaq and PeopleSoft, and others may follow. The dot-com companies, such as Planetarabia.com and Arabia.com, have either vanished or were keeping a low profile.

Yet the global IT bounce back was already in evidence. Dell announced its entry into the printer market, doubtless to the chagrin of HP and Canon. Somehow this is what you would expect in a recovery, aggressive expansion by a major PC player into a new market segment.

And Microsoft rolled out Office 2003, and Oracle 10g grid computing. Again in a market downturn the biggest, best-run companies continue to invest in research and development, and thus emerge with enhanced market share post-recession.

Another notable feature of Gitex 2003 was the strength of the retail computer and IT market.
Firms like Fujitsu-Siemens, LG, Samsung and National Panasonic had even more digital products on show. And Canon was in a class of its own with pioneering digital products from the first digital SLR camera to super advanced copiers.

However, the overall message was that the days of the Internet start-up and many local software houses are over. The multinationals are back in control of the Middle East IT market, just as they are all over the world. Perhaps it was only ever an illusion that this was ever any different.

On the other hand, the IT multinationals now seem to realize more than ever the importance of engaging with local talent and local institutions to achieve a broader and deeper market for their products. And that will be healthy for the digital future of the entire region.

Finally, technology should not be forgotten. Behind the scenes at Gitex this year there was much discussion about broadband Internet access and its key role in the future. Watch this space for further developments.