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MEA Enterprise Hardware Market Set to Take a New Direction in 201

Susan Mwenesi by Susan Mwenesi
6 years ago
in Business
7 min read
0

The Middle East and Africa (MEA) enterprise hardware market, comprising servers and external storage, remained in a passive growth state according to the latest figures released today by International Data Corporation (IDC).

IDC Referencing its EMEA Quarterly Server and Disk Storage Systems Tracker, the research firm today announced that the market expanded a sluggish 3.8% year on year in the third quarter of 2014 to total $522.9 million, with much of the growth spurred by infrastructure deals within the oil and gas (O&G), telecommunications, and Government verticals.

“The MEA enterprise hardware market is poised to take a new direction in terms of infrastructure investment in 2015,” says Swapna Subramani, research manager for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey. “We are expecting to see a shift in focus toward efficiency and consolidation, with demand moving from volume products to value products.”

The MEA region’s x86 server market witnessed a 3.0% year-on-year increase in value, but a 6.4% decline in unit terms during Q3 2014. “The dynamics of server adoption within enterprises has seen a major shift in the past six to eight quarters,” says Subramani. “Enterprises are now looking at consolidated and converged infrastructures with the focus shifting from boosting server capacity and volumes to optimizing the server installed base and enabling cloud technologies. As such, the growth seen in the x86 server market’s value, and the corresponding decline in volume, can be attributed to the increased adoption of virtualization technologies that utilize fewer server units than is the case in traditional datacenters.”

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The region’s external storage market witnessed robust growth of 13.9% year on year in the third quarter of 2014. ”Datacenter investments are shifting from being server centric to being more data and storage centric, with the region’s external storage market expected to grow at a faster rate than the server market over the coming five years,” continues Subramani. “The storage market is witnessing increased uptake of entry-level and midrange storage devices driven by demand for the NAS protocol. High-end storage devices actually saw a sharp decline in shipments in Q3 2014, validating the overall market movement into more cost-optimized, scalable solutions that can be adapted to 3rd Platform technologies such as cloud, big data, mobility and social.”

The UAE’s enterprise hardware market witnessed strong growth of 32.7% in Q3 2014, with telco and government spending accounting for the majority of the growth. Saudi Arabia’s growth was more subdued at 5.1% year on year, with a decline in the server market offset by strong growth in the external storage market.

The enterprise hardware market in the Other Gulf Cooperation Council (OGCC) countries witnessed a 1.8% decline in Q3 2014 compared to the same quarter last year. This decline was solely due to a decline in server shipments in the region as the external storage market registered solid double-digit growth. A delay in anticipated enterprise projects within the education and government sectors were the main cause of the shrinkage in server shipments. Within the region, Qatar (33.9%) and Bahrain (27.4%) posted exceptional growth that was bolstered by projects in the O&G and BFSI verticals, respectively.

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North Africa (Morocco, Algeria, and Tunisia) witnessed a stark decline of 11.6% year on year with a decline in both server and external storage shipments. The market suffered from heavy administrative constraints, very long decision periods, unexpected delays, and a lack of visibility on the execution of pipeline projects.

Egypt’s enterprise market grew 4.7% year on year after many quarters of successive declines. “Although Egypt is still awaiting a state of permanent stability, enterprise spending is picking up, particularly in the banking and telecommunications segments,” says Subramani. “We expect to see positive investment fervor in the country, with optimistic growth forecasts bringing the country up to its pre-crisis investment levels within the next couple of years.”

The South African enterprise market continued to decline in Q3 2014, registering a 5.6% slump in enterprise hardware shipments. Declining customer affordability due to the rand’s depreciation was the major reason for the slowdown. The South African market has also become mature in terms of enterprise systems adoption, meaning growth opportunities are becoming limited.

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Susan Mwenesi

Susan Mwenesi

Interested in business, technology and all things startups in Africa!

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