The Egyptian ICT market will total $10.4 billion in 2017, according to the latest insights presented by IDC. The global technology research and consulting services firm said it expects the country to see relatively flat growth in 2017, with ongoing government initiatives aimed at creating technology hubs and establishing public-private partnerships helping to secure longer-term investment.
“2016 was a difficult year for economies around the world, including Egypt,” says Jyoti Lalchandani, IDC’s Group Vice President and Regional Managing Director for the Africa, Middle East, Turkey. “Spending growth has slowed across all sectors, with organisations increasingly looking to consolidate their IT spend and ensure they are achieving measurable returns on their technology investments by focusing on immediate business outcomes. As such, we expect the investment landscape of 2017 to be shaped by initiatives related to consolidation, operational efficiency, and IT security as emerging technologies take a back seat until the economy improves.”
Despite this more pragmatic approach, Lalchandani says Egyptian organisations are still embracing the idea of digital transformation. “Spurred by the four pillars of the Third Platform, cloud, big data, social, and mobility, a new generation of IT practices is steadily gaining traction across the country, manifesting itself in the emergence of an innovation ecosystem built around new technologies such as IoT and advanced information security. Indeed, IDC research shows that two thirds of Egyptian CIOs are actively undergoing, or currently planning for digital transformation, with security and cloud the key drivers.”
IDC expects IT services to be the fastest growing area of ICT investment in Egypt in 2017, with YoY growth of around 10.2%. Cloud services, in particular, are rapidly gathering momentum, with IDC forecasting YoY growth of 34.8% for this subset of the IT services segment in 2017. “It is still early days for cloud computing in Egypt,” says Hossam Helmi, Country Manager at IDC Egypt. “But adoption is accelerating, and organisations are increasingly beginning to consider cloud-first SaaS software-as-a-service deployments for new workloads.”
Security will also feature high on the agenda in 2017, as Egyptian organisations look to build up their defenses following a very challenging 2016. “Last year was characterised by a number of massive data leaks, a proliferation of ransomware and denial-of-service attacks, and a shortage of security skills in the Egyptian market,” continues Helmi. “We expect 2017 to be another challenging year for information security, so we are advising CIOs in the country to remain alert to such threats and actively invest in fortifying their security capabilities.”
According to IDC, other key areas of strategic focus in 2017 included improving the alignment between IT operations and line-of-business expectations, and using innovative technologies to solve IT and business problems. “Despite the budgetary constraints that many CIOs are now working under, we believe that Egyptian organisations will be able to achieve real business returns through IT innovation in 2017,” says Lalchandani. “The focus on well-managed operational expenditure should continue to drive IT investment and business benefits throughout the year ahead.”
