IT Scenario in Middle East
- By Ratan Sharda
Middle East or MENA region contains within itself another larger group called GCC (Gulf Co-operation Council) countries. With an exception of a few, all countries in this region have natural wealth in form of Crude Oil and Natural Gas. This region ranges from Turkey on East to Egypt on the West. Nearly all the countries are Monarchies. With rising wealth and better exposure to world, aspirations of people are rising, resulting in rebellions of various types and shades in nearly the entire Arab world, even outside the conventional Middle East region, in countries falling in North Africa, 
like Libya – a country more close to Arab world view than African. These agitations and rebellions have disturbed a very stable region with thriving economies. Of course, there are some countries like Yemen and Tunisia that never saw a stable polity, a government that is responsive; countries that see wide economic disparity and poverty.
Being a small and closely knit region, any successful business happens to have branches in all GCC countries. With disturbances stretching over months, the investment sentiments have soured. All expansion plans have been put on hold. Information Technology investment has also taken a hit due to this environment.
Economies in Middle East are centred around Petroleum industry as the biggest economic activity. These industries have adopted to IT in a big way as they were controlled earlier by US based multi-nationals and followed their working style. Other industries that came up subsequently, are built around this raw material and they are also moving up the IT value chain in a big way. Many countries in the region, understanding that petroleum is not going to last forever, have begun investing in other manufacturing and commercial activities. This is the market that IT companies are keen to exploit.
Truly speaking, major commercial activity in this region is Imports, Sales and Distribution. Since, production is in limited industrial segments, and minimal, this sector is the mover of economies. Many cities like Dubai are hubs to such activity. This is the largest segment of SMB where all IT companies are investing their energies now. Large IT companies are pursuing their products and services sales in this region.
If one views the scenario from the top, one can see high IT penetration, good knowledge and operating skills though not local development skills. Most of the IT is managed or controlled by Indians and to some extent 
Pakistani and Philippine skilled people. Western managers can be seen mostly in large manufacturing facilities or in consulting arena. All the brands of the world an all the software services companies worth their name would be found in nearly all the GCC countries. Countries outside charmed GCC circle have lesser IT penetration mainly because of long war like conditions, less developed economies and lack of petroleum money. Barring the upper end of industry, middle segment still doesn’t fancy costly software services and is content with low cost solutions.
Some countries like Qatar who have gone on economic growth path very aggressively with huge government finance will find good deal of action, though most of it would be controlled by government bodies, while the trickle down effect on other manufacturing, project companies and Sales and Distribution and Retail chains will result in larger demand for software products and services. However, movement from low cost solutions to middle tier softwares may take some more time.
Though, on paper Middle East region, with enough petroleum generated funds looks strong market for IT companies, we cannot see its full potential till the current disturbances settle down and new political structures come up.
About the Author
Ratan Sharda is Chief Consultant with ESS. He has a rich industry experience of over 33 years, of which 21 years have been in IT. His domain since last 15 years has been ERP. He brings along with this his years of rich experience in textile manufacturing and marketing, dairy, packaging, publishing and printing. He is a postgraduate in Economics from Mumbai University , having graduated from St. Xaviers College.
