UAE Digital Transformation Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 0.99 Billion |
| Market Size (2029) | USD 2.23 Billion |
| CAGR (2024 - 2029) | 15.09 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
UAE Digital Transformation Market Analysis
The UAE Digital Transformation Market size is estimated at USD 0.99 billion in 2024, and is expected to reach USD 2.23 billion by 2029, growing at a CAGR of 15.09% during the forecast period (2024-2029).
- There is a growing demand for cloud services as businesses and government entities move towards cloud-based solutions for scalability, flexibility, and cost efficiency. Thus, organizations are proactively adapting policies, procurement strategies, human resource practices, and cultural norms to harness the full potential of technology. Partnering with a trusted partner is essential to craft an IT ecosystem that comprehensively addresses the challenges, facilitating swift and seamless innovation adoption.
- The Telecommunications and Digital Government Regulatory Authority (TDRA) takes responsibility for the digital transformation initiatives at the federal level in UAE. Aligned with global best practices, the TDRA plans the UAE's ambitious National Digital Government Strategy 2025. This national strategy, a cornerstone of the 'We the UAE 2031' vision, focuses on elevating the government's service delivery to a world-leading standard. It plans to improve the accessibility and efficiency of services by deploying artificial intelligence for the initiatives.
- The Smart City Expo Dubai 2024, scheduled for November 2024, engages individuals in governmental decision-making at the local, state, and federal levels. The event offers significant value to private sector entities keen on contributing to smart city development. The event's agenda emphasizes the role of technology and forward-thinking concepts in shaping the future urban environment. Attendees can engage with innovators, delve into advanced solutions, and witness firsthand how smart cities are revolutionizing our lifestyles, workplaces, and environmental interactions. These initiatives derive the demand for artificial intelligence, machine learning, and IoT and increase the demand for cybersecurity for the prevention of misuse of data.
- There is a need for robust data protection and cybersecurity measures majorly due to the growth of the volume of sensitive data. Thus, it is becoming challenging for companies to maintain data security and prevent data exploitation. Moreover, the country experienced a skill gap in emerging technologies such as AI, cybersecurity, and blockchain. The talent shortage is a barrier to implementing digital transformation in the UAE.
- The pandemic pushed businesses and governments to rapidly adopt digital tools and solutions for faster implementation of e-commerce and online services. Moreover, the market is also experiencing growth in investments in smart infrastructure to enhance urban living standards by deploying smart city technologies and IoT solutions, which is driving the market growth.
UAE Digital Transformation Market Trends
Cloud and Edge Computing is Expected to Witness Growth
- Cloud computing is transitioning towards significant growth majorly due to the its on-demand delivery of IT resources via the Internet by using a pay-as-you-go pricing model. Rather than investing in and managing physical data centers and servers, businesses can tap into technology services ranging from computing power to storage and databases based on a need. This shift enables SMEs to allocate resources precisely where needed, curbing unnecessary expenses on IT resources.
- Small and medium enterprises (SMEs) in the UAE are increasingly turning to cloud services to power their business analytics and artificial intelligence (AI) initiatives. With a growing emphasis on data-driven decision-making and widespread AI adoption, SMEs are swiftly integrating these technologies into their workflows. This alignment empowers SMEs to harness advance tools and also enhances operational scalability, bolstering their competitive edge in the digital arena. As per the MasterCard survey, 74% of SMEs in UAE were confident about business growth in 2023.
- Moreover, the UAE government's commitment to digital transformation and smart city initiatives creates opportunities for cloud service providers and business to develop and deploy innovative solutions. Governmenet policies supporting cloud adoption will boost the demand.
- Many market players are investing in partnership for advanced offerings in digital transformation initiatives. For instance, in September 2023, Microsoft Corp. announced an expanded partnership with Abu Dhabi’s G42. The collaboration aimed to advance artificial intelligence (AI) technology and provide cloud infrastructure services in the United Arab Emirates (UAE). This initiative was planned to grant the UAE's public sector and select industries access to Microsoft's Azure cloud and AI capabilities, facilitating compliance with local privacy and regulatory standards. Notably, Microsoft bolstered its Azure services in the UAE, leveraging Khazna Data Centers, a joint venture involving G42 and Emirates Telecom.
- There is expansion of data centers by major cloud providers in the UAE which aims to open new opportunities for local busineses to leverage high-performance cloud services with low latency. For instance, In June 2024, The UAE's Ministry of Investment and Egypt's Ministry of Communications and Information Technology inked a Memorandum of Understanding (MoU) to jointly invest in data center projects, aiming for a combined IT capacity of approximately 1 GW. The agreement outlined a commitment for Egypt and the UAE to share insights on projects, explore joint ventures, and delve into policy, investment research, certification development, and innovation in the data centers.
BFSI Holds Largest Market Share
- The UAE has a vibrant fintech ecosystem with numerous startups offering innovative solutions in payments, lending, wealth management, and blockchain technology. Thus, increased investment in fintech companies is driving innovation and growth in the BFSI sector in the market.
- During the Dubai Fintech Summit 2024, The UAE planned to lead the digital economy with its regulator's support. Aligned with the CBUAE’s vision to cultivate a robust fintech landscape, the CBUAE has introduced an extensive regulatory sandbox framework. This Sandbox Regulation is designed to offer a secure space for both fledgling fintech ventures and established firms to trial fresh and inventive offerings, all while upholding consumer protection and regulatory standards. Moreover, some institutions demonstrated that they are leveraging machine learning for customer service and fraud detection and prevention, which has unlocked new levels of efficiency.
- In May 2024, Aligned with Dubai's D33 Agenda, aiming to elevate the city as a leading global financial hub by 2033, the 2nd Dubai FinTech Summit prioritized cross-border collaboration and innovation, crucial for reshaping the FinTech landscape. Dyna.Ai made its global debut at the summit, showcasing its advanced AI solutions tailored for the Arabian market.
- Moreover, The UAE is moving towards a cashless economy with widespread adoption of digital payment solutions, including mobile wallets and contactless payments. There is integration of digital payment gateways with e-commerce platforms that enhance the online shopping experience. As per data by PPRO Financial Ltd, card transactions dominated in UAE which contributed 48% payment methods for e-commerce transactions in 2023.
- Additionally, companies are using big data analytics to gain insights into customer behavior and preferences, enabling personalized product offerings and marketing strategies. Furthermores, real-time analysis and machine learning algorithums help detection of suspicious activities, which can help players in preventing fraud and reducing financial losses.
UAE Digital Transformation Industry Overview
The UAE digital transformation market is moderately fragmented in nature. Key major players include G42.ai, IBM Corporation, Microsoft Corporation, Oracle Corporation, and others. These major players account for a considerable percentage in the country and actively participate in partnerships and product innovations to gain more market share.
- In April 2024, G42, the artificial intelligence (AI) technology player, and Microsoft Corp. announced a significant move in which Microsoft planned to invest USD 1.5 billion in G42. This strategic investment aimed to bolster the collaboration between the two entities, focusing on introducing advanced Microsoft AI technologies and skill-building programs in the UAE and globally.
- In September 2023, the University of Wollongong in Dubai (UOWD) launched its Master of Digital Transformation program, a pioneering initiative in the region. Developed in collaboration with tech leader IBM, the program aligned with the UAE's 2025 digital strategy, designed to propel the nation towards a knowledge-based economy, emphasizing innovation and advanced sciences. By partnering with IBM, UOWD guarantees its students an education tailored to industry needs, arming them with the expertise and mindset crucial for spearheading digital transformations in diverse sectors.
UAE Digital Transformation Market Leaders
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Microsoft Corporation
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G42
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IBM Corporation
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SquareOne Technologies
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Oracle Corporation
*Disclaimer: Major Players sorted in no particular order
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UAE Digital Transformation Market News
- In February 2024, Ericsson, in collaboration with du, a subsidiary of Emirates Integrated Telecommunication Company (EITC), unveiled their strategic alliance. This partnership aimed to introduce Ericsson Private 5G Networks, an advanced wireless solution tailored to elevate services for the government and corporate segments in the UAE. Together, Ericsson and du pioneered sophisticated private 4G and 5G networks. It is designed to seamlessly integrate with the latest data-driven technologies, empowering UAE enterprises.
- In October 2023, Group-IB, a cybersecurity technology developer specializing in combatting digital crime, announced a significant signing of a memorandum of understanding with the United Arab Emirates Cyber Security Council. This agreement planned for a shared commitment to develop and share advanced technologies aimed at bolstering digital security. Additionally, it highlighted the UAE Cyber Security Council's and H. E. Dr. Al Kuwaiti's dedication to engaging with the private sector, fostering a robust cybersecurity environment, and ultimately ensuring the safety of the nation.
UAE Digital Transformation Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. INDUSTRY ECOSYSTEM ANALYSIS (Detailed Coverage of Key Stakeholders in Digital Transformation Industry Product/Solution Providers, System Integrators/VARs, Connectivity Providers, Regulatory Bodies, End-users, Service Providers, etc.)
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increase in the adoption of big data analytics and other technologies in the country
5.1.2 The rapid proliferation of mobile devices and apps
5.2 Market Restraints
5.2.1 Concerns about the Privacy and Security of Information
6. CURRENT MARKET SCENARIO AND EVOLUTION OF DIGITAL TRANSFORMATION PRACTICES
7. KEY METRICS
7.1 Technology Spending Trends
7.2 Number of IoT Devices
7.3 Total Cyberattacks
7.4 Technology Staffing Trends
7.5 Internet growth and penetration in the Country
7.6 Digital Competitiveness Ranking
7.7 Fixed and Mobile Broadband Coverage
7.8 Cloud adoption
7.9 AI adoption
7.10 E-commerce Penetration
8. MARKET SEGMENTATION
8.1 By Type
8.1.1 Analytics, Artificial Intelligence and Machine Learning
8.1.1.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.1.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.1.3 Use Case Analysis
8.1.1.4 Market Outlook
8.1.2 Extended Reality (XR)
8.1.2.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.2.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.2.3 Use Case Analysis
8.1.2.4 Market Outlook
8.1.3 IoT
8.1.3.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.3.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.3.3 Use Case Analysis
8.1.3.4 Market Outlook
8.1.4 Industrial Robotics
8.1.4.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.4.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.4.3 Use Case Analysis
8.1.4.4 Market Outlook
8.1.5 Blockchain
8.1.5.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.5.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.5.3 Market Outlook
8.1.6 Additive Manufacturing/3D Printing
8.1.6.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.6.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.6.3 Use Case Analysis
8.1.6.4 Market Outlook
8.1.7 Cybersecurity
8.1.7.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.7.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.7.3 Use Case Analysis
8.1.7.4 Market Outlook
8.1.8 Cloud and Edge Computing
8.1.8.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.8.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.8.3 Use Case Analysis
8.1.8.4 Market Outlook
8.1.9 Others (digital twin, mobility, and connectivity)
8.1.9.1 Current Market Scenario and Market Projections for the Forecast Period
8.1.9.2 Key Growth Influencers (Drivers, Challenges, and Opportunities)
8.1.9.3 Market Breakdown by Type (Digital Twin, Mobility and Connectivity)
8.1.9.4 Use Case Analysis
8.1.9.5 Market Outlook
8.2 By End-User Industry
8.2.1 Manufacturing
8.2.2 Oil, Gas and Utilities
8.2.3 Retail & e-commerce
8.2.4 Transportation and Logistics
8.2.5 Healthcare
8.2.6 BFSI
8.2.7 Telecom and IT
8.2.8 Government and Public Sector
8.2.9 Others (Education, Media & Entertainment, Environment etc)
9. COMPETITIVE LANDSCAPE
9.1 Company Profiles
9.1.1 Microsoft Corporation
9.1.2 G42
9.1.3 IBM Corporation
9.1.4 Oracle Corporation
9.1.5 SquareOne Technologies
9.1.6 Amazon Web Services Inc. (Amazon.com Inc.)
9.1.7 Accenture PLC
9.1.8 ABB Group
9.1.9 Siemens AG
9.1.10 SAP SE
- *List Not Exhaustive
10. KEY TRANSFORMATIVE TECHNOLOGIES
10.1 Quantum Computing
10.2 Manufacturing as a Service (MaaS)
10.3 Cognitive Process Automation
10.4 Nanotechnology
UAE Digital Transformation Industry Segmentation
Digital transformation is the process of incorporating digital technologies such as analytics, artificial intelligence, and machine learning, extended reality (XR), Iot, industrial robotics, blockchain, additive manufacturing/3D printing, cybersecurity, cloud and edge computing, and others (digital Twin, mobility, and connectivity) in various end-user industries across UAE.
The UAE digital transformation market is segmented by type [analytics, artificial intelligence, and machine learning, extended reality (XR), IoT, industrial robotics, blockchain, additive manufacturing/3D printing, cybersecurity, cloud and edge computing, and others (digital twin, mobility, and connectivity)] and end-user industry [manufacturing, oil, gas and utilities, retail and e-commerce, transportation and logistics, healthcare, BFSI, telecom and IT, government and public sector and others (education, media & entertainment, environment etc)]. The market sizes and forecasts are provided in terms of value (USD ) for the segments.
UAE Digital Transformation Market Research FAQs
How big is the UAE Digital Transformation Market?
The UAE Digital Transformation Market size is expected to reach USD 0.99 billion in 2024 and grow at a CAGR of 15.09% to reach USD 2.23 billion by 2029.
What is the current UAE Digital Transformation Market size?
In 2024, the UAE Digital Transformation Market size is expected to reach USD 0.99 billion.
Who are the key players in UAE Digital Transformation Market?
Microsoft Corporation, G42, IBM Corporation, SquareOne Technologies and Oracle Corporation are the major companies operating in the UAE Digital Transformation Market.
What years does this UAE Digital Transformation Market cover, and what was the market size in 2023?
In 2023, the UAE Digital Transformation Market size was estimated at USD 0.84 billion. The report covers the UAE Digital Transformation Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the UAE Digital Transformation Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
UAE Digital Transformation Industry Report
Statistics for the 2024 UAE Digital Transformation market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. UAE Digital Transformation analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
