MEA Enterprise Hardware Market Sees Constrained Growth

The Middle East and Africa (MEA) enterprise hardware market, comprising servers and external storage, remains in a passive state according to the latest figures released today by International Data Corporation (IDC). Referencing its EMEA Quarterly Server and Disk Storage Systems Trackers, the research firm today announced that the market expanded a sluggish 5.1% year on year in 2013 to total $2.58 billion, with much of the growth spurred by infrastructure deals within the oil and gas (O&G), telecommunications, and BFSI verticals.

The MEA region's x86 server market witnessed a 5.0% year-on-year increase in value, but a 3.7% decline in unit terms during 2013. "There are a lot of changes occurring in the MEA enterprise domain, with a gradual shift towards fully virtualized datacenters and cloud-based infrastructures," says Zeeshan Gaya, research manager for systems and infrastructure solutions at IDC Middle East, Africa, and Turkey. "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."

The region's external storage market expanded 5.1% year on year in 2013. ''The overall sentiment in the MEA storage market ended on a positive note in 2013, with most countries witnessing healthy growth barring a few in Africa," says Swapna Subramani, senior research analyst for storage systems at IDC Middle East, Africa, and Turkey. "The storage market is witnessing increased uptake of entry-level and midrange storage devices driven by demand for the NAS protocol. Mobility and bring-your-own-device (BYOD) initiatives, video surveillance, and Big Data are the key driving factors for this ongoing shift within the MEA storage market."

UAE’s enterprise hardware market witnessed a strong growth of 11.5% with 2013 revenue representing a healthy mix of spending by the country’s key verticals namely, Financial, Telco, Hospitality and Government sectors. Saudi Arabia’s growth was more subdued at 3.2% annually hampered by the small decline in the server market this year compared to the massive server revenue registered in the Kingdom last year.

The enterprise hardware market in the Gulf Cooperation Council (GCC) countries registered very positive results in 2013, growing 12.8% year on year, with the region's smaller countries like Oman (50.0%) and Bahrain (37.4%) posting exceptional growth that was bolstered by projects in the O&G and telecommunications verticals, respectively. Qatar and Kuwait also witnessed healthy growth owing to large infrastructure investments taking place across various verticals.

North Africa (Morocco, Algeria, and Tunisia) saw healthy year-on-year growth of 8.0% in the enterprise market of 2013, and the region continues to show strong uptake. This growth can be attributed to investments made in the telecommunications and finance verticals across the region and a few O&G deals that took place in Morocco. Key strategic projects in Algeria within the O&G sector in the second half of 2013 also contributed to the healthy growth seen in the North African region. Egypt's enterprise market declined 7.3% year-on-year owing to a curb on spending across most verticals, with investments limited to a few enterprises in the very large businesses segment.

The South African enterprise market declined markedly (14.5%) year on year in 2013. This decline can be attributed to shifts in the foreign-exchange rate, which has become an important risk factor to vendors in the country due to continuous depreciation of the rand of close to 20% (plus associated volatility) during 2013.

On the vendor side, HP retained top spot in the overall MEA server market of 2013 with over 42.3% share, followed by Dell and IBM. Cisco emerged as a bright spot in the MEA server market in 2013, recording year-on-year growth of 57.5% and taking considerable share away from the market leaders owing to its aggressive blade server strategy across the region. EMC continued its dominance of the region's external storage market, with 37.7% share of total disk storage, followed by IBM and HP.

About the Research

IDC's 'EMEA Quarterly Server Tracker' is a quantitative tool for analyzing the server market on a quarterly basis. The tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, country, operating system, price band, CPU type, and architecture. IDC's 'EMEA Quarterly Disk Storage Systems Tracker' provides timely market information on the disk storage systems market across Western Europe, Central and Eastern Europe, and the Middle East and Africa. Markets can be measured in terms of new storage capacity shipped, factory value, and end-user value of shipments. The tracker provides insight into the impact of market changes, key trends, and the results of vendors' new product, marketing, and channel activities.