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Qatar Information Technology Report Q1 2012
Business Monitor International, Jan 2012, Pages: 57
Market Overview
With its booming economy and ambitious ICT investment programme, Qatar is expected to be the fastestgrowing IT market in the region over BMI's five-year forecast period. 2012-2016 IT spending CAGR is forecast at 14%, with opportunities in sectors such as infrastructure, hydrocarbons, banking and telecoms.
The decision to award Qatar the 2022 FIFA World Cup is expected to fuel a wave of investment in IT products and services. The government's ICT-2015 strategy will also create opportunities. In H111 there were new IT tenders in areas such as e-government and healthcare, following on from a series of new IT projects in 2010 from large organisations such as Qatar Steel and Qatar National Bank.
Industry Developments
The Qatari government has said it will invest QAR6bn (US$1.6bn) in information technology and IT services as part of its ICT-2015 strategy. Qatar is planning to build digital networks, smart cities, and other technology landmarks as part of the plan. One of the key components is a national FTTH network. The government continues to innovate in an attempt to increase use of its national Hukoomi egovernment portal. In July 2011, ICT guiding body, ictQATAR announced the launch of a new security solution that will use Qatari citizens' national eID card to enhance access security of the portal. Users will now be able to sign forms and official documents online.
ictQATAR has several priority policy areas, including telecoms liberalisation, online government, elearning, e-health, and small and medium-sized enterprises (SMEs). A government target is to increase utilisation of ICT by SMEs. The government is also implementing a major IT initiative in the healthcare area.
Competitive Landscape
Cloud computing is a growing focus for vendors in the Qatar market. In 2011, Microsoft unveiled its Office 365 product in Qatar. Microsoft had previously reached an agreement with local telecoms company Qtel to deliver cloud-based services and software applications over Qtel's converged network.
Meanwhile, Qtel has launched a new specialist business solutions provider company offering ICT services to companies across Qatar. Qtel is partnering in the venture with EMEA, which provides managed services.
In July 2011, enterprise resource planning (ERP) software vendor Epicor announced plans to further expand its channel in Qatar, to target what the company described as 'tremendous growth opportunities' in the country. Epicor said that it was targeting companies with US$2bn or less in annual revenue. Among the vendor's local clients is Khalid Cement Industries Complex (KCIC), one of the largest concrete manufacturing companies in Qatar
Computer Sales
The Qatari addressable computer hardware market including PCs, notebooks and accessories is forecast at around US$264mn in 2012, with drivers including double-digit economic growth, massive infrastructure projects, and demand from an expanding hydrocarbons sector. Government projects, and particularly substantial spending on IT in education, will boost computer hardware spending.
The Qatari computer hardware market is projected to grow at a CAGR of 6% between 2012 and 2016. An evolving retail landscape will help to stimulate sales, with the traditional domination of smaller stores having been diluted by the appearance of multi-brand electronics sections in hypermarkets and monobrand stores in malls. A growing population has also helped expand the consumer segment and attract new retailers into the market.
Software
BMI forecasts a software market value of US$104mn in 2012. With the evolution of the IT market, a stronger strategic focus on software spending is being seen, with procurement decisions often taken at a higher executive level. Software spending is expected to grow at a CAGR of 11% during BMI's five-year forecast period.
Growth areas include business intelligence and other information management applications, as Qatari companies seek more efficiency in both internal collaboration and relationships with international customers and partners. There remains demand for basic ERP, however, even among larger manufacturing and service sector companies. A Qatari government report found that software piracy had declined by almost 10% within the last five years.
IT Services
The IT services market is forecast to be the fastest-growing segment of the Qatari IT market between 2012 and 2016, outperforming the hardware and software sectors. Indeed, it has steadily increased for the last 10 years. With IT services spending estimated to grow at a 15% CAGR to US$289mn by 2016, the next period promises to see more opportunities in sectors such as financial services, healthcare, education, and communications.
In 2011 new tenders were being awarded by banks, real estate organisations, and educational institutions. Demand will be driven by the ambition of Qatari companies to expand regionally and internationally.
E-Readiness
Qatar's broadband market continues to suffer from a lack of competition and the sector has been criticised for its high subscription fees. These factors could account for the relatively slow growth that has characterised the broadband market and the wider internet subscriber market. This was expected to change during 2009, however, as Vodafone Qatar geared up to launch services. Although ADSL will be the strongest driver of broadband subscription growth, we expect to see an increasing focus on wireless broadband services such as WiMAX.
Qatar was one of the regional movers in the UN's most recent e-readiness survey. Qatar moved up four places to 32nd, due to government initiatives and expanding broadband penetration. The country performed even better in the e-government rankings, moving from 62nd to 53rd place. The government launched a new e-services portal in 2008 and is rolling out new initiatives in various areas.
Business Monitor International's Qatar Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Qatar's information technology industry.
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