We maintain a modestly optimistic outlook for the Saudi IT market over the medium term in our Q2 16 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 spe nding will grow at a CAGR of 1.9 % over 201 6-2020 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.
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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 medium-sized 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, cloud computing and smart services expected to underpin outperformance.
The Saudi Arabia Information Technology Report features BMI Research's market assessment and independent forecasts covering personal computers and software; semi-conductors, memory chips, integrated circuits and general components; the internet and IT solutions. It analyses analyses regulatory changes (licensing, customs and intellectual property protection) and competitive landscapes comparing IT companies by products, sales, market share, investments, projects and expansion strategies.
BMI's Saudi Arabia Information Technology Report provides industry professionals and strategists, corporate analysts, IT associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the IT industry in Saudi Arabia.
Benchmark BMI's independent IT Industry forecasts for Saudi Arabia to test other views - a key input for successful budgetary and strategic business planning in the Saudi IT market.
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Saudi Arabia Information Technology Report Q3 2016 - New Market Report
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