AI and Cloud Investments Set to Skyrocket as IDC Predicts ICT Spending Surge in META Region

The total amount spent on ICT overall in the Middle East, Turkey, and Africa (META) is expected to exceed $238 billion this year, representing a 4.5% rise from 2023, according to IDC. Spending on AI is expected to reach $6.9 billion by 2027 in the META area, indicating a high market for AI in general and generative AI (GenAI) in particular. In 2024, the META region’s spending on public cloud will surpass $13 billion, indicating a 21% annual increase.

International Data Corporation (IDC) released its most recent forecasts last week as more than 400 senior executives from the most influential technology vendors, telecoms firms, and IT service providers gathered at The Ritz-Carlton, Dubai International Financial Centre for the 2024 edition of IDC Directions Middle East, Türkiye, and Africa.

IDC said in its regional estimates for the year ahead that it anticipates expenditure on telecommunications services to rise 5% YoY to $133 billion in 2024, while IT spending is expected to climb 3.9% YoY to $105 billion. IDC predicts that digital transformation expenditure in the area will surpass $59 billion in 2024 and rise at a cumulative annual growth rate (CAGR) of 15% over the ensuing years to hit the $88 billion mark in 2027, as META’s digital economy takes shape.

“Across the META region, there is a clear appetite for AI in general and generative AI (GenAI) in particular, with spending on AI forecast to reach $6.9 billion by 2027,” said IDC’s Group Vice President and Managing Director for the META region, Jyoti Lalchandani. “However, many organizations are already questioning whether they are over-pivoting on cost reduction and not focusing enough on how AI can help them to grow their revenues. We expect revenue growth outcomes to take center stage in the next 3 to 5 years and providers must track this shift carefully with their core buyers to ensure that their AI-related offerings continue to align with the evolving business goals of their customers.”

‘Preparing Your Customers for an AI Everywhere Future’ was the theme of this year’s IDC Directions Middle East, Turkey, and Africa event. It’s projected that AI investment in the region will reach $3.0 billion this year, a 32% increase from 2023 according to IDC.

The event included a panel moderated by IDC’s Jyoti Lalchandani, with Srinivasan Sampath, acting Group CTO at First Abu Dhabi Bank, and Vinay Ramesh Kumar, CTO at Landmark Group, as panelists. Lalchandani noted that the focus of AI investment by end-user organizations is likely to shift in the coming years, moving beyond the initial emphasis on cost reduction.

Crawford Del Prete, IDC’s Global President, delivered the event’s keynote, ‘The AI Moment: Welcome to the Next Era of Technology’, declaring the rise of GenAI as a golden age of innovation. Del Prete highlighted the transformative effect of GenAI’s emergence on the IT landscape, as businesses not only seek to increase productivity, but also find new approaches to fulfill customer needs. “More and more, we see businesses investing heavily in GenAI to gain a competitive edge and avoid falling behind. In fact, we anticipate that by 2027, global spending on GenAI will exceed $150 billion, corresponding to about 30% of all AI-related investments,” said Del Prete.

A session titled ‘Preparing Your Customers for an AI Everywhere Digital Future’ followed, where Thomas Meyer, IDC’s Group Vice President of Research for EMEA, discussed the necessary support systems that tech providers should establish for their clients. “As the META region sees increased adoption of GenAI, tech vendors need to cultivate a responsible AI strategy,” said Meyer. “Part of this strategy involves assisting customers in securing investment funds and delivering significant business outcomes and ROI for prioritized use cases.”

The following were among the other noteworthy forecasts made at IDC Directions Middle East, Turkey, and Africa:

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