IT Services Lead The Way In Saudi Arabia


Saudi Arabia's status as one of the Middle East's largest IT market s will be driven by new IT services that reach the market and maintain the country's strong growth trajectory. Telecare provider CompuGroup Medical (CGM) highlights the potential for IT spending in the healthcare industry while Texas Instruments (TI) has developed tools for e-education in the country. BMI notes the IT services segment of Saudi Arabia's IT market is set to grow 35.3% between 2013 and 2017, considerably faster than the total market's growth.

IT Services Will Drive Market
IT Market Spending By Segment (US$mn)

Government IT spending is an important pillar of Saudi Arabia's IT market growth, with the government taking advantage of developments in several industries to lower costs and improve services. According to CGM, the Saudi government allocated US$1.74bn for medical devices in 2012, growing 17.8% from 2011. IT services and hardware are increasingly important to developments across many different sectors, creating opportunities for IT hardware and software companies to diversify revenues. CGM's positive outlook for the Saudi telecare market is shared by mobile operator Mobily, which has launched a telecare partnership with drugmaker Sanofi.

CGM estimates spending on IT in the healthcare industry reached US$4.1bn in 2012 with 9% y-o-y growth. This is higher than overall IT services growth, according to BMI estimates, highlighting the potential for IT services in new industries to generate faster growth rates in markets such as Saudi Arabia.

TI's focus on education also offers benefits. Its TI-Nspire CX handheld device aims to aid science and mathematics education in the country, with a local language version of the device trialled in schools across al-Kharj and Jeddah. Although the Saudi population is largely urbanised, providing education in rural areas is more difficult, leading to greater developments in e-education.

Saudi Arabia's already strong IT market and established telecoms infrastructure offer great potential for the continued development of new services in telecare and e-education as well as providing services across many other industries. A wealthy population offers many opportunities for TI and CGM to expand revenues from Saudi Arabia and neighbouring markets with similar characteristics.