DR and BC services expected to lead growth in Managed Services market

    • The managed service market in the GCC region experienced a 11.6 per cent growth. Infrastructure support is expected to remain the most demanded type of managed services, while data hosting services and DR&BCs will also lead the growth.
    • It is projected that the market will grow at 18.8 per cent CAGR during the forecast period and the market will reach US$ 3,116 in 2018. The majority of this growth is accounted for the three leading countries in the region- KSA, UAE and Qatar.
    • The businesses in the region still limit their spending on non-core operations. It was a common trend across the Gulf as companies started seeking efficiency. It forced a shift from Capex to Opex, reducing total cost of ownership on IT equipment.

Infrastructure support is expected to remain the most demanded type of managed services, while data hosting services and DR&BCs will also lead the growth.

  • The governmental entities and BFSI organisations in the Gulf were the key clients for the MS providers; the oil & gas vertical, the biggest contributor to countries economy, generated only 13.2 per cent. The future MS market growth is expected to be led by orders from oil & gas vertical, IT & Telecom, health, media and manufacturing.
  • Companies in the Gulf have a shortage of skilled IT personnel and the red tapism involved in bringing an expat staff is time consuming, hence MS providers come handy with their experience and infrastructure.
  • Data centre hosting services was the second largest segment; it is projected to grow faster than the whole MS market due to significant demand for data hosting in the KSA.
  • The large enterprises in the Gulf usually sign up for infrastructure support services, DR & BCs and network security services. While demand for data hosting solutions is on the rise, a big share of large enterprises still choose to keep their data on their proprietary servers on site.
  • SMBs generated more than a third of regions MS revenue. It is expected that their market share will increase in the future due to dropping service price, increased competition, decreasing broadband cost, and new developments, especially cloud computing.
  • Four types of companies – telecom operators, International and local system integrators and data hosting service providers dominate the managed services market in the GCC region.

Note: This is an extract from the Frost & Sullivan report titled: Middle Eastern Managed Services

Market: Emerging Opportunities in the Managed Services Market.

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