Market Trends of Israel ICT Industry
Growing demand for Cloud Technology
- ICT market vendors widely adopt cloud computing for application development and testing, resource management, data storage, backup, orchestration services, etc. Cloud computing technology is adopted across various sectors, including IT and telecom, healthcare, BFSI, manufacturing, retail, media, and entertainment. For instance, Microsoft plans to launch its first cloud in Israel to provide cloud services in local data centers across the country.
- BFSI sectors in the country have led to the increasing deployment of cloud-based services for secured payment gateways. For instance, TCS is working with Newgen to enable Israel's central bank to transform its banking sector by building a cloud-hosted centralized platform to provide end-to-end banking solutions.
- Key players in the ICT market have upgraded their existing data centers with cloud computing solutions, primarily driving the market growth. For Instance, Israel signed a contract with Google and Amazon Web Services (AWS) worth USD 1 billion to provide cloud services for the public sector and military.
- Furthermore, the increasing investments by the government in promoting the development of numerous technologies, such as 5G, AI, IoT, machine learning, Big Data, etc. is expected to drive the growth of the ICT market. For instance, IBM acquired the Israeli provider of data observability software company Databand.ai. This acquisition will help the company to extend its leadership in observability to the full stack of capabilities for IT across infrastructure, applications, data, and machine learning and is part of its efforts to boost its hybrid cloud and AI skills and capabilities.
- Globalization in this region and the growing need for adopting advanced technologies such as Cloud, IoT, and artificial intelligence are boosting the market's growth. According to the IMF, Israel will record a GDP of USD 678.59 billion in 2027. This indicates that the GDP is growing, and so will the ICT market.
Understand The Key Trends Shaping This Market
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The IT and Telecom Sector is Expected to Drive the Market
- The government is taking initiatives to boost the country's IT sector because of the growing demand for digital transformation. For instance, based on the Human Capital Fund Program, the Israel Innovation Authority will fund training and placement schemes with a total budget of USD 10.59 million (public and private funds). Such initiatives from the government will bring new growth opportunities for the Israel ICT market.
- The demand for greater agility and flexibility in IT infrastructure is driving the growth of the ICT market. For Instance, Google LLC plans to build its fourth data center in Israel. Such infrastructure investments will bring new growth opportunities for the Israel ICT market.
- The transition to 3G, 4G, and 5G is still rising in the country due to expanding new networks and increasing demand for high-speed connectivity services. For instance, Israel plans to allow Palestinian mobile operators to launch 4G networks in Israel.
- According to GSMA, smartphone adoption will grow by 85% by 2025. The growing population of adults in the country is increasingly using smartphones which will increase the demand for ICT products and services.
- The growth in the telecom industry is mainly due to the increasing population with the rising adoption of broadband services in the country. According to the Ookla Speedtest Global Index, Israel ranked 33rd with a median fixed broadband download speed of 95.66 Mbps in November last year. Fixed broadband services penetration is growing significantly and thus increasing the demand for the telecom services sector.
