Boston, MA -- (SBWIRE) -- 01/24/2014 -- IT is central to Saudi Arabia's modernisation and economic diversification plans. We expect the government's efforts to achieve both goals, and other growth and development targets, to drive IT spending during our five-year forecast period ending 2017. There is a strong pipeline of major IT projects by government and enterprise across multiple sectors. We expect the implementation of these projects to boost IT spending in the latter part of 2013 and over the medium term. Particularly large opportunities exist in healthcare and education, as well as cloud computing adoption and investments in smart systems that require hardware, software and services. These trends will combine to ensure Saudi Arabia remains the biggest IT market in the Gulf, and the Kingdom will continue to be a lucrative market for technology products and services.

Headline Expenditure Projections

Computer Hardware Sales: SAR7.91bn in 2012 to SAR8.39bn in 2013, +6% in local currency terms. Although PC sales slowed down in H113, growth in the segment is being driven by a deepening of the tablet market and evolution in form factors.

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Software Sales: SAR2.88bn in 2012 to SAR3.05n in 2013, +6.2% in local currency terms. Upgrades to Windows 8 will boost sales in 2013, while modernisation by enterprises will provide momentum for the business software market over the medium term.

IT Services Sales: SAR4.55bn in 2012 to SAR4.90bn in 2013, +7.8% in local currency terms. Investments in smart cities' projects and the adoption of cloud computing services will drive growth.

Risk/Reward Ratings (RRR): Saudi Arabia's score is 55.8 out of 100.0. Although this was a considerable increase from a score of 53.4 in the previous quarter, Saudi Arabia dropped one place to fifth in our latest Middle East and Africa RRR table.

Key Trends And Developments

- According to the International Data Corporation (IDC), Saudi Arabia's IT market was the biggest in the Middle East in 2012, with sales of over US$1bn. In September 2013, the IDC predicted that this figure will soar to US$12bn by 2016, with growth fuelled by third-platform technologies and solutions offerings, which will be based on mobile devices, cloud services, social technologies and big data. IDC noted that third-platform technologies currently represent only 25% of overall IT spending.
- Saudi Arabia-based telecoms company Etihad Etisalat (Mobily) has increased its business cloud solutions portfolio, launching its Managed SAP Service. The move will allow the company to increase its business' operational efficiency and cut IT infrastructure cost. The service is based on SAP platform and will comprise management of the operating system, databases and SAP BASIS. The company will also offer comprehensive professional services that will assist customers to design, set strategy, manage and operate their SAP cloud during each stage of their engagement.

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