MENA IT Spending Projected To Reach US$169 Billion By 2026 Amid Digital Transformation
The Middle East and North Africa (MENA) region is on the brink of a significant transformation, with IT spending projected to hit US$169 billion by 2026, a jump of 8.9% from the previous year. This growth underscores the region's burgeoning role as a pivotal technology hub, with countries in the Gulf Cooperation Council (GCC) leveraging their sophisticated infrastructure and progressive policies to entice global partners and foster digital prowess.
In the face of worldwide economic and geopolitical uncertainties, Chief Information Officers (CIOs) within the MENA region are prioritising strategic investments that are set to redefine the technological landscape. These areas include artificial intelligence, intelligent automation, adoption of multi-cloud strategies, bolstering cybersecurity, and the upskilling of the workforce.
A significant contributor to this IT spending surge is the anticipated increase in data centre systems expenditures, projected to rise by 37.3% in 2026. This marks it as the fastest-growing IT segment within the region, according to Gartner. This expansion, however, is expected to moderate to a more sustainable pace as the market transitions from a period of rapid growth. This shift reflects a larger trend towards more deliberate and sustainable investment strategies across the region.
Eyad Tachwali, Vice President of Advisory at Gartner, highlighted the symbiotic growth between data centre systems spending and investments in AI-powered software and updated AI infrastructure by Chief Information Security Officers (CISOs) in the region. This increase is primarily fuelled by the escalating demand for generative AI and advanced machine learning, which necessitate extensive computing power for processing large volumes of data.
Tachwali further noted that the demand for these advanced data processing capabilities is expected to predominantly originate from government entities, major cloud service providers, technology vendors, and institutions engaged in developing and deploying AI models. This marks a shift from traditional enterprises or consumer-driven demand.
The Future of Software Spending in MENA
A significant facet of IT spending in the MENA region is the projected growth in software expenditures, expected to rise to US$20.4 billion in 2026, marking a 13.9 percent increase. This surge is largely attributed to the rapid adoption of generative AI across various organisations. Gartner forecasts suggest that by 2028, three-quarters of global software spending will be allocated to solutions that integrate generative AI capabilities, indicating the pivotal role of AI in shaping future software investments.
Mim Burt, Practice Vice President at Gartner, emphasised the MENA region's rapidly solidifying status as a global technology hub. "The MENA region is rapidly emerging as a global technology hub, as GCC countries leverage their advanced infrastructure and forward-looking policies to attract global partners and build digital capabilities that fuel innovation and support resilient, AI-enabled economies," Burt said. This outlook reflects a broader recognition of the region's strategic moves to harness technology for economic resilience and innovation.
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