Omar Saleem, IDC: Saudi Investments in IT Services Expand

January 9, 2012

The Saudi IT services market has been growing considerably as new initiatives are launched with large IT-based projects. The IT services market in Saudi Arabia grew 13.6% in 2010 alone, largely driven by project-based and support- and installation-based services.

"Government organizations are among the largest IT services spenders in the kingdom. The sector has seen investments accelerate through a number of projects aimed to improve economic growth and offer better public services to citizens," says Senior Analyst Omar Saleem, IT services, IDC Middle East, Africa, and Turkey. "These investments will create demand for new IT infrastructure coupled with a wide array of IT services for smooth operation."

The oil and gas sector is undeniably a focus area of investment in the kingdom, with new refineries being setup and old ones being updated with new IT systems and processes. Similarly, investments into improving healthcare services are underway, with the total number of hospitals across the kingdom set to double in the next few years. Healthcare organizations in the private sector are also being encouraged to improve the quality of their services. Many hospitals, both public and private, are investing into healthcare management systems as a part of the rollout of electronic medical records for patients. The education sector in Saudi Arabia is expanding, too; new universities are being established, and the quality of education offered in existing institutions is being improved. Universities are partnering with multinational vendors to enhance their internal IT infrastructures and are offering new technical study programs.

"Such initiatives present enormous opportunities for domestic and international services providers to expand their managed services portfolios. Although investments across verticals have accelerated in the past year, concerns around data security and inadequate support prevail," says Saleem. "We believe fears about security breaches are a critical factor in Saudi Arabia – one leading to organizations' avoidance of third-party services. Although services providers have been investing in their processes and conducting audits to ensure data security standards are met, end-user organizations are skeptical about the security measures their services providers have implemented."