Growing IT markets fuel investments in storage software in the states of the Arab Gulf

According to a new IDC study, 2004 should prove to be just as dynamic, as businesses and governments in the area continued to be inundated with massive influxes of information.

Saudi Arabia accounted for the largest share of the software storage market last year. The United Arab Emirates was second. Together, these two countries represented almost three-quarters of spending on storage software in 2003. "This stands to reason," says Heini Booysen, Senior Analyst, IDC CEMA's Software Group. "Saudi Arabia is the largest country in the region and the UAE is one of the most advanced, as well as the de facto IT hub for the Gulf States and also much of Africa."

Backup and archiving software constituted the largest share of software sales in the Gulf region in 2003. Storage resource management was number two, as companies sought to take advantage of networked environments and underused capacity. Replication software was third. "Companies and governments are still not fully aware of how storage software can help them," says Booysen. "But awareness is growing fast and many are realizing they are not taking full advantage of their capacity, both of which should lead to the continuing expansion of the Arab Gulf software storage market."

The competitive environment in the Gulf States software market was tight in 2003: the top four vendors captured more than 77% of revenue across the region. EMC took first. In the Gulf, it has managed to successfully leverage its storage hardware business to move software solutions. It was followed by Veritas, IBM, then Computer Associates. "Restrictions in the software markets of the Gulf are starting to loosen," says Booysen. "Vendors need to invest in user and channel-education campaigns and ramp up sales efforts to ensure that the benefits of their solutions are known across the value chain."

A number of key verticals accounted for the bulk of spending on storage software in the Arab Gulf in 2003. The process manufacturing sector (mainly oil and gas) represented the largest source of demand at 30.7% of market share. The finance sector, largely comprised of banks, was the second most important segment, with 24.9%. Other key segments included telecommunications and the public sector. "Spending will continue to be concentrated in these key verticals," says Booysen. "Nevertheless, a lot of smaller companies in other segments have been expressing interest in storage solutions, which suggests a potentially lucrative development of the market."

IDC's Gulf States Storage Software 2004-2008 Forecast and 2003 Vendor Shares presents the storage software market in the Gulf States for 2003 and forecasts expenditure on storage software applications through 2008. The study contains market size, vendor market shares, and forecasts for five discrete market categories. It also ranks the major storage software providers by their 2003 revenue, and includes a profile of their activities and presence in individual country and vertical markets. The study aims to answer the following questions: What is the current size of the storage software market? Which storage software segments are most important? What is the current focus of spending? How will spending on storage software evolve and what are assumptions underline forecast numbers? Who are the market leaders and what are their strengths, weaknesses, and strategies for the future? Which industry sector s are the most important sources of demand for storage software applications? What are the future trends in this area?