According to a recent report released by research firm Gartner, IT spending in the Middle East and North Africa (MENA) region is expected to reach $175.5 billion in 2023, a 2% increase from $171.9 billion in 2022. Gartner also predicts that global IT spending will total $4.6 trillion in 2023, a 5.5% increase from 2022. Despite ongoing global economic uncertainty, all regions worldwide are expected to achieve growth in IT spending in 2023.
Gartner’s Distinguished VP Analyst, John-David Lovelock, noted that digital transformation continues to be a priority for businesses, even in the face of macroeconomic headwinds. He said that IT spending will remain strong, as CIOs seek to optimize spending while using digital technology to transform their companies’ value proposition, revenue, and client interactions.
The software segment is expected to see double-digit growth this year, as businesses prioritize spending to capture competitive advantages through increased productivity, automation, and other software-driven transformation initiatives. Conversely, the devices segment is expected to decline by almost 5% in 2023, as consumers delay device purchases due to decreasing purchasing power and a lack of incentive to buy.
In the MENA region, communication services are projected to see the highest spending this year, at $115.13 billion, up 2.5% from $112.31 billion in 2022. The software sector is expected to experience the highest growth in spending, with $13.34 billion, up 9.8% from $12.15 billion spent last year. Meanwhile, Gartner’s data indicates that spending on devices will decline 6.4% from $26.68 billion in 2022 to $24.97 billion in 2023.
Gartner’s report also discussed the recent collapse of banks such as Silicon Valley Bank, Signature Bank, and Credit Suisse, which had a significant impact on both the banking and tech industries. Although the exposure to the fallout is relatively contained, tech startups are likely to face increased questions and scrutiny from stakeholders, clients, and prospects.
Lovelock emphasized the importance of tech CEOs ensuring that their organizations are prepared for any future economic uncertainties by conserving working capital, monitoring the impact on cash, securing access to credit, and keeping a close eye on talent and culture. Once the organization is ready, tech CEOs can then engage employees to find, accelerate, and execute on market opportunities.
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