Cloud, 5G, AI to accelerate META ICT spending
Hybrid cloud, 5G, Internet of things (IOT), artificial intelligence (AI) and blockchain technology are among the trends expected to shape companies' ICT spending in the Middle East, Turkey and Africa (META) in 2019.
This is according to a report from data analytics firm IDC, which highlights the critical role digital transformation initiatives will play in driving ICT investment across this region.
The report projects overall spending on ICT in META will grow 2.5% year-on-year in 2019, to reach $213 billion, as organisations experiment with technologies such as blockchain, IOT, AI and data analytics in a bid to spur innovation and revolutionise their customer experience.
With hyper-scale cloud providers such as Microsoft, Amazon and Huawei expected to launch their data centres in Africa over the next 12 to 24 months, IDC predicts more organisations in the region will adopt hybrid clouds for their critical workloads, accelerating enterprise transformation and significantly impacting their ICT investments.
Cloud's scalability will place smaller organisations on a level playing field with bigger ones. A well-implemented cloud environment will help companies drive innovation; making things like big data analytics, IOT connections and in some instances 5G more impactful, according to IDC.
"Access to cloud and improved connectivity levels such as 5G will allow for the uptake of edge computing, which will be critical for the progress of IOT and smart cities projects," explains Megha Kumar, research director, software and cloud for IDC Middle East, Turkey and Africa.
"Innovation, experience and the need for efficiency will fuel investments around AI and blockchain technologies."
With META being a region known for leapfrogging technologies, a myriad of organisations will be looking to create new businesses around blockchain technology, notes IDC.
"The macro-economic challenges in the META region and the need to innovate will result in a two-way optimisation strategy where organisations will be more cautious in terms of their spending, while at the same time optimising their current and new operations," notes Kumar.
According to a Gartner report, global IT spending is projected to total $3.8 trillion in 2019, an increase of 3.2% from the expected $3.7 trillion in 2018.
Gartner says cloud software, blockchain, digital businesses and spending on devices (PCs, tablets and mobile phones) are expected to drive growth.
Digital transformation platforms
As META organisations strive to broaden the scale of their innovation and accelerate the responsiveness of their operations, radical digital transformation initiatives can be expected this year.
"Developing an effective digital transformation platform that can sustain, advance and scale business operations may be the most important task facing the region's decision-makers," says Jyoti Lalchandani, IDC group VP and regional MD for the META region.
"We expect digital spending across the META region to cross the $200 billion mark in 2019 and that figure is only going to increase over the coming years as more and more organisations experiment with transformative technologies, creating organisational change."
A new Accenture report found that in SA, digital technologies such as AI, blockchain and virtual reality can generate more than R5 trillion in value for industry and society over the next decade.
Arthur Goldstuck, World Wide Worx MD, warns that many companies in the META region talk the language of digital transformation but do not seem to appreciate what it takes to implement an effective digital transformation strategy.
"Some of the biggest hindrances to achieving digital transformation are that the technological will is missing from some organisations, clear digital perspective is missing, courage to change is missing. Banks, for example, are still stuck in silos when they should have been the first with seamless infrastructures," Goldstuck points out.
"Telcos, who should be the drivers of the revolution, are still mired in paper and manual systems. The fact that clients cannot use an online portal to manage every aspect of an account, and do so seamlessly and without friction, is the clue to lack of digital transformation."