Market Trends of Middle East Digital Transformation Industry
The IoT Segment is Expected to Occupy the Largest Market Share
- The Internet of Things (IoT) drives digital transformation by connecting physical devices and sensors to the internet, creating smart, interconnected systems. This connectivity enables real-time data collection and analysis, improving operational efficiency, supporting informed decision-making, fostering new business models, and enhancing automation across various industries.
- Most IoT adoption in the Middle East is directed toward public administration applications and smart cities. Additionally, the City planners have been using IoT networks to monitor and control infrastructure, devices, and the generated data while keeping the overall goal of optimizing public services, business opportunities, and living standards for residents intact.
- Cities like Dubai and Abu Dhabi are integrating IoT solutions into their urban infrastructure to enhance public services and elevate citizen living standards. Dubai, in particular, is at the forefront with its ambitious Smart City initiative, utilizing IoT for various applications, including traffic management and environmental monitoring.
- This project is expected to redefine smart living per the national economic development objectives of Egypt Vision 2030. Etisalat is expected to deliver innovative, connected technologies to improve the new capital's safety, security, and energy efficiency and deliver long-term benefits to its population.
- According to GSMA Intelligence, by 2025, the enterprise sector in the Middle East and North Africa (MENA) is projected to have around 529 million Internet of Things (IoT) connections, with the consumer sector following closely at 503 million. Nearly half of the region's mobile internet connections are anticipated to utilize 4G technology by the same year.
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Saudi Arabia is Expected to be the Fastest Growing Market
- Saudi Arabia is on the verge of a transformative era filled with vast growth potential and endless opportunities. As digitalization accelerates, the nation's strategic focus on enhancing network infrastructure, adopting 5G technology, and forming key partnerships will be crucial in achieving a more interconnected and prosperous future.
- Under Vision 2030, Saudi Arabia is actively digitalizing its industries, a pivotal initiative already gaining momentum. Leveraging 5G technology, particularly artificial intelligence (AI), stands central to this transformation. The nation is fostering AI adoption by developing AI-centric environments, backing data analytics solutions, and spearheading grand projects like NEOM, a futuristic smart city.
- Aligned with its Vision 2030 strategy, the Saudi government initiated multiple projects to bolster digital transformation in the Western region. Initiatives such as the National Digital Transformation Program (NDTP) aim to enhance e-commerce, digitalize public services, and foster innovation ecosystems, particularly in Mecca and Jeddah.
- Saudi Arabia achieved a score of 76.99 in the 2023 IMD World Digital Competitiveness Rankings, which assess economies from the most to the least competitive, with scores ranging from 0 to 100. Several cities in Saudi Arabia are featured in the IMD Smart City Index, contributing to market growth. The Saudi Vision 2030 agenda includes smart city development, enhancing cloud infrastructure, and promoting IoT technology.
- In March 2024, Amazon Web Services (AWS) announced its plans to establish an AWS infrastructure Region in Saudi Arabia by 2026. This move is poised to provide a strategic advantage to developers, startups, enterprises, and various sectors, including healthcare, education, gaming, and nonprofits. These entities may cater to end-users while ensuring data residency compliance by hosting their applications in data centers within Saudi Arabia. Highlighting its commitment, AWS has invested over USD 5.3 billion (approximately SAR 19.88 billion) in Saudi Arabia.
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