in saudi arabia riyadh | february 05, 2019 | the ritz carlton · slight ict spending growth in...
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Riyadh | February 05, 2019 | The Ritz Carlton
in Saudi Arabia
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KEY ICT Predictions for 2019
in Saudi Arabia
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IDC Prediction
ICT spending in Saudi Arabia
will show a modest recovery in
2019 totaling $34.5B (+1.0%)
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Slight ICT Spending Growth in 2019, Transformative Growth in Key Areas
DRIVERS
• Expansionary budget
• Reprioritized NTP goals – NTP 2.0
• Products to Services (True DX)
• Govt driven citizen experience
• Emerging new tech use cases(Cloud, Security, Analytics, Innovation Accelerators)
INHIBITORS
• Volatile oil prices
• Tax and levies
• ICT Budgetary Constraints
• Labor market shortcomings
• SME maturity
29.5
32.433.9
35.433.6 33.6 34.2 34.5
2012 2013 2014 2015 2016 2017 2018 (F) 2019 (F)
Saudi ICT Market 2012-2019 (US$ Bn)
0.1% 1.7% 1.0%
CAGR 2017-22
Overall ICT 1.6%
Hardware -0.2%
Software 7.9%
IT Services 6.0%
Telecom Services 1.0%
Source: IDC MEA Blackbook, Q3-Q4 Interim 2018; 2019 is 2018 Real USD
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Significant Slowdown in Mobile Shipments; Software & Services Continuing to Drive Major Growth
10.8%
12.1
%
29.8%
35.0% 11.4%
1.0%Software
IT Services
Storage
Other Hardware
Mobile Devices Systems
$11.0 B
11.5%
11.0
%
32.6%
32.3% 11.7%
0.9%Software
IT Services
Storage
Other Hardware
Mobile Devices Systems
$10.6 B
10.9%
11.4
%
31.9%
33.3% 11.6%
0.9%Software
IT Services
Storage
Other Hardware
Mobile Devices Systems
$10.9 B
2018F2017 2019F2.8%
3.9%
1.2%
4.4%
Incl. Mobile Devices
Excl. Mobile Devices
Source: IDC MEA Blackbook, Q3-Q4 Interim 2018; 2019 is 2018 Real USD
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Saudi Arabia IT Spending Outlook: Key Industries
Finance, $1,194M
Manufacturing, $637M
Retail/ Wholesale, $367M
Professional/ Personal Services, $270M
Healthcare, $312M
Transportation, $210M
Communications, $1,330M
Utilities, $221M
Government, $1,583M
Education, $422M
Resource Industries & Construction, $699M
0%
2%
4%
6%
8%
10%
12%
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
CA
GR
201
7-2
2
X-axis and Bubble Size represents IT Spending 2019 ($M)
CAGR 2017-22 – High Growth Sectors
Transportation 8.7%
Healthcare 7.7%
Manufacturing 6.8%
Government 6.4%
Source: IDC Industry Spending Guide. Total IT spending expected in 2019=$7.4B, excludes Consumer Spending
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Saudi Arabia will exhibit technology market growth that is typical of a transforming economy.
IDC Prediction
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Continuous Improvement Through
Digital Economy
Promotion of
Transparency
Through
Digitalization
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N e w G o a l s
• Scale back: Pragmatic approach
• Workforce inclusion for women. (24%
by 2020, instead of 28%)
• Focus: Upskilling of human capital
• Continued social reforms
• Reduced corruption
• Retail sector contribution to
GDP
• Specially-abled workforce
N T P 2 . 0
G i g a P r o j e c t s
• NEOM Bay
• Qiddiyah Entertainment City
• Waad Al Shamaal City - Northern
Promise
• King Salman Energy City
• Integrated Logistics Zone (Riyadh) –
under GACA (nationwide plans)
I n f r a s t r u c t u r e
M o d e r n i z a t i o n
• Government continues to lead DX.
• Technology-led energy hub
• National industrial development
program
• Logistics industry development
• Boosting local content
• Renewable energy, Exports & Mining
• Military industries
• Government procurement and
competition system
• FDI licensing automation
D x
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Supporting the NTP 2020 and Vision 2030
Envisioning an ICT led
approach to the National
Transformation Program for the
Kingdom of Saudi Arabia
A Digital Government
Vision for the
Kingdom of Saudi
Arabia
Saudi Arabia’s Vision
2030 – A Technology
led Transformation
2017 20182016
IDC is playing a key role in tracking the technology impact and progress
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Private sector
organizations will gear
up to keep pace with Dx
initiatives driven by the
government
IDC Prediction
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Key Industries Undergoing Transformation
$1.6B
$1.3B
$1.2B
$1.3B
$0.7B Healthcare &
Education
Resources &
Manufacturing
Financial Services
Telecom
Government
of overall IT spending in 201955%Source: IDC MEA Blackbook, Q3-Q4 Interim 2018; 2019 is 2018 Real USD
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Key Industries Undergoing Transformation
GOVERNMENT
Leading-edge citizen experiences
Yesser taking the lead (Expanding Abshir capabilities)
Accountability and performance measurement
Local content strategy
Cost center>Revenue center (Tourism, tax, levies)
Regulatory effectiveness (FDI, trade, maritime, cloud)
HEALTHCARE & EDUCATION
Privatization & capacity building
Insurance platform revamp
Unified health records
Omni patient experience
Curricula revamp to meet demand
Self-paced digital learning platforms
NCeL, SDL, scientific R&D
$1.6 Bn $0.7 Bn
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Riyadh 18th Dec 2019
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Pillars of Transformation
Customer Experience Transformation
Omni-channel outreach
Digital portfolios (intensifying competition)
5G Rollout
Software Defined Everything (SDx)
Drones & robotics
Mergers and consolidation
Next-gen banking experience (AI, analytics, etc.)
Data driven transformation
Regulatory compliance vs. innovation
Fintech and agent banking
Blockchain and DLT uptake
TELECOM FINANCIAL SERVICES RESOURCE & MANUFACTURING
Predictive maintenance & Asset mgmt.
Technology-led energy hub
National industrial development program
Logistics for industry development
Renewable energy and mining in limelight
Ship and aircraft building sites
$1.3 Bn$1.2 Bn$1.3 Bn
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IDC’s Syndicated Events
1,100
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Saudi Arabia’s digital transformation drive will be increasingly complemented by innovation accelerator use cases such as AI, IoT, Blockchain, and Robotics.
IDC Prediction
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DX currently
under wayEarly market competitive advantage Differentiated
customer experience
43%About to start
DXNeed to ensure governance and
alignment to drive success
14%
Planning DX
efforts Need to translate plans into actionable strategy or risk being left behind
37%No plans
Significant business risk 6%
90%Joint Activity
between IT and Business
Digital Transformation is Underway in the KingdomCurrent DX Adoption Trends & Implications
Source: IDC KSA CIO Summit Results, 2018
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Innovation Accelerators - Creating a New Wave of IT Disruption in the Kingdom
INTERNET OF THINGS
Smart City projects
COGNITIVE SYSTEMS
AlRaedah Finance
ROBOTICS
Smart Pharmacy
Autonomous Underwater Vehicles
AR/VR
VR Lounge
BLOCKCHAIN
Common Digital Currency Called ‘Aber’
3D PRINTING
3D Printed Homes
DRONES
Surveillance
Monitoring pilgrims walking up Mount Arafat
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3• Controlling the flow of
traffic and manage diversions.
• Simulating and predicting what's going to happen in the future and how to optimize.
Riyadh Traffic - Big Data & AI
21• Smart Fire Alarm System
(Ministry of Interior and Ministry of Haj).
• IoT paired with AI to generate data and intelligence for emergency response services before an incident
Hajj – Blended IoT & AI
• Assessing and tracking the movement of people who got affected to analyze how the disease is spreading and in which region.
• Making healthcare affordable
Preventing SARS
Saudi Arabia’s National Transformation Program
National Digitization is at the heart of the “Saudi Arabia’s Vision 2030”
– AI use-cases are Emerging
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13.9841.50
149.19
223.84
518.46
18.5049.08
231.94
291.19
558.77
Cognitive AI 3D Printing AR/VR Robotics Big Data and Analytics
$M
illio
ns
2018 2019
33.21% 20.62% 41.77% 25.60% 8.13%CAGR
Source: IDC Worldwide, Black Book 3rd Platform, Oct. 2018
Digital Transformation (DX) IT spending in META will surpass $25B in 2019 and will be a key driver for ICT spending
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Saudi Arabia – Jeddah | September 18-19, 2019
9th Edition
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IDC’s Syndicated Events
1,100
Riyadh 18th Nov 2019 Jeddah 21st Nov 2019
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The need to showcase swift RoI
in Smart City initiatives will
further drive the adoption of
“Off the shelf” solutions
IDC Prediction
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Backed by almost USD500
billion, Neom is expected
to incorporate innovation
and technology with
sustainability and diversity.
Sound Footing01
Neom will innovate in
Nano technology, 3D
Printing, Sensors, IoT
Devices, Electrical and Self
Driving Vehicles, Robotics
and Renewable Energy.
Innovation Hub02
First phase of the NEOM Bay
with a functioning airport will
be ready by 2020
NEOM Bay03Development on 14 luxury
hotels will begin under the
supervision of TRSDC
Red Sea Project05
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26
Neom is Set to Diversify Saudi Arabia and Its Economy
NB-IoT will become mainstream to support the growing needs of
the most visited cities in the Kingdom
Key Smart Cities Predictions 2019
Smart Parking, lighting, signage and cleaning systems will lead
the way to score quick wins and improve sustainable living
Manufacturing, Healthcare and Public Safety will be the early
benefactors of 5G deployments in the Kingdom
AI-based analysis will become the standard for generating
actionable, in-depth insights out of vast amounts of information.
Smart Public Transit will become a reality with reliance on signal control systems, access control,
and smart surveillance
End-Point Security concerns will force the public sector to
develop smart security regulations and frameworks
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22 Use Cases
10 MEA Cities
5 Strategic
Priorities
12 Programs
Nominations Now Open!
Become a Sponsor!
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IoT spending across all
segments and industries in
the Kingdom will surpass
$1.4 B in 2019.
IDC Prediction
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Spending across the IoT Technology Value Chain will Grow
Source: IDC Semi-Annual IoT Spending Guide, Nov. 2018
$162.1M
$528.9M $522.1M
$273.7M
Connectivity Hardware Services Software
Production Asset Management
Freight Monitoring
Fleet Management
Manufacturing Operations
CCTV Security & Surveillance
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Manufacturing sector will start to use to Machine Learning &
RPA over their connected devices to prevent downtime
Regulators will recognize the threats from IoT devices and will
explore regulations around security
2019 will see the emergence of IoT VNOs, introducing additional
use cases and ramping up the competition
Artificial Intelligence will take IoT from reporting to providing
predictive and preventive actions in key verticals
As the amount of connected devices grows, demand for data processing will move from the
core to the edge
LPWAN and 5G deployments will add traction to Smart
Utilities and Asset Tracking use cases
Key IoT Predictions for 2019
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Proliferation of the 3rd
platform and innovation accelerators will change the Kingdom’s posture towards securing high-profile assets.
IDC Prediction
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IT security will remain a major area of focus. Exponential data growth and kingdom-wide digital transformation initiatives will be key drivers.
71%
Maintaining security is
the biggest technology-
related challenge for
Saudi CIO’s
MAINTAINING SECURITY
75%
Think investments in
cyber security and privacy
technologies are
extremely important
INVESTMENT PRIORITIES
46%
Will implement advanced
security solutions in the
next 12-24 months
IMPLEMENTATION ROADMAP
Source: IDC Saudi Arabia, CIO Survey, 2018
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New and Emerging Opportunities within Managed
Security Services (MSS).
Key Security Predictions for 2019
Security to become a national priority
Non traditional players entering into security market mainly in
cybersecurity domain
Development of SOC capabilities to intensify
With increase in the number of cyber attacks role of
Governmental agencies like NCSC will become more critical
Telcos to aggressively focus on delivering security services
remotely
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Amid the evolving cyber threat landscape, security vendors and services providers will proactively align themselves with customer’s business priorities.
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78.749
194.180
112.210
82.151
211.476
121.408
Hardware Services Software
$M
illio
ns
2018 2019
Overall security spending would reach $415 M in 2019, expanding at CAGR of 7.9% till 2022
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BUSINESS SECURITY: RISK & RESILIENCE
Turkey . Bahrain . Kuwait . Muscat . Doha . UAE . Saudi Arabia. Egypt . Jordan . South Africa. MauritiusExclusive CISO Roundtables: Riyadh.
Riyadh 15th April Jeddah 17th April
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Increased uptake of cloud in the Kingdom will garner high interest in data locality under the current cloud specific regulations.
IDC Prediction
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140.37
191.82
264.06
Cloud
$ M
illio
n
2017 2018 2019
The Public Cloud Market in the Kingdom will exceed $264 million in 2019
Spending on cloud will grow at a CAGR of 32.63% from 2018-2022
Source: IDC Saudi Arabia, Public Cloud Services Market, 2108-2022
More than 50% of SaaS market is comprised of below workloads
Human Capital Management Applications
Financial Applications
Email Applications
Procurement Applications
Inventory Management Applications
Enterprise Performance Management Applications
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Regulations related to data locality and entry of international players would be a key
necessity
Key Cloud Predictions for 2019
Emergence of Multi cloud -Customers will have a mix of private
and public clouds deployments.
Industry specific solutions - Enterprises in 2019 will look for solutions that are closely aligned
with sectorial needs
Increase in the acceptance and uptake of Cloud within Government sector
When it comes to cloud offerings, Telcos will look at an ecosystem approach and expand
partner base.
Competition in cloud market to intensify with the entry of International players
32%27%
43% 43%
Private Cloud Public Cloud
Already Implemented
Planning till 2020
Cloud Implementation Roadmap
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Managing cost and
investment48% of ICT budgets → “Keeping
the Lights On” activities
ModernizationInfrastructure & People
Security Risk & Continuity
Skills and managementDX needs governance and leadership
Positioning for new
technologyDigital Roadmap. Data.
Automation.
“Technology spending
momentum will rapidly shift from
traditional to transformative
solutions whilst “doing more with
less” will continue to prevail”
12111
210
39
48
576
Are you even playing the right game?
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Thank You
in Saudi Arabia