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Saudi Arabia Information Technology Report

  • Date Submitted: 05/02/2016 11:17 PM
  • Flesch-Kincaid Score: 37.8 
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“Saudi Arabia Information Technology Report”   IT Services Sales offer cost savings and flexibility to enterprises in an uncertain environment.

View: We maintain a modestly optimistic outlook for the Saudi IT market over the medium term in our Q216 quarterly report update. We believe 2016 will witness the final year of the IT market contraction. The steep decline in the oil price in 2014 and 2015 has put Saudi Arabia's economy on a lower growth trajectory and as a result we downgraded our IT market outlook in the Q116 update. We forecast total spending will grow at a CAGR of 1.9% over 2016-2020 to reach SAR43.7bn in 2020. The hardware segment is forecast to underperform over the medium term as a combination of economic uncertainty and market maturity sees spending contract, though volume growth is expected to return in the final years of the forecast. The services market is the bright spot in our outlook, with cost efficiency and flexibility generating solutions expected to see the strongest demand from local enterprises looking for manoeuvrability in an uncertain economic environment. This is even true for the oil and gas segment, where low prices could actually prove a catalyst for a new generation of investment in smart services to increase efficiency and ensure margin maintenance in a depressed global market.

Latest Updates & Industry Developments
- Computer Hardware Sales: SAR18.3bn in 2016 to SAR17.9bn in 2020. A weak economic backdrop will combine with market maturity and a dynamic of price erosion to see the hardware segment underperform over the medium term.
- Software Sales: SAR8.6bn in 2016 to SAR10.3bn in 2020. While projects face being deferred or scaled back in the oil sector, enterprise software adoption will continue to deepen among small- and mediumsized enterprises.
- IT Services Sales: SAR11.9bn in 2016 to SAR15.5bn in 2020. Solutions offering cost savings and flexibility to enterprises in an uncertain environment such as outsourcing,...

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