Is data the next big thing for Middle East?
Transformational wave makes it a valuable resource
The middle east has been home to a number of oil-dependent economies in the past, with oil and gas exports accounting for the majority of revenues in some countries. However, given dwindling oil prices, these countries are now ramping up their focus on other industries such as transportation, banking, government, tourism, education, and healthcare sectors as they prepare for a future post fossil fuels.
Businesses across the region are implementing ambitious transformation roadmaps to ensure their relevance in the digital world. Indeed, the adoption of third platform technologies like cloud, mobility, social, and big data is slowly becoming mainstream throughout the Middle East.
We are seeing the proliferation of devices across the region, together with increased connectivity among both individuals and businesses. Various governments are also implementing their own smart city and IoT initiatives. Overall, the new era of low oil prices has served as an unwitting catalyst for a new wave of digital transformation that is sweeping across the Middle East.
Digital transformation, increased connectivity, and the proliferation of devices have all caused an explosion in data, much of it highly valuable. Enterprise and consumer activities create a digital trace that can potentially act as raw material for data distilleries. This distilled data or structured data intelligence can then be used to improve operations, enhance the provision of customer services, and radically transform business processes and outcomes.
It can therefore be surmised that this transformational wave has brought about a new, potentially valuable, resource that now needs to be refined, renewed, and distributed profitably — data. In that sense, data is the Middle East’s new natural resource for the post-oil era.
At IDC, we expect the Middle East big data and analytics market is to grow at a compound annual growth rate of 10 per cent over the five years from 2015 to 2020. And much of this growth will be spurred by the digital transformation initiatives being undertaken by enterprises across the region, as they inevitably require predictive analytics and data distillation to develop smarter business model frameworks.
The global trend shows that government authorities and private organisations are currently relying on big data, business intelligence and analytics to support infrastructural developments, improve healthcare services, efficiently manage available natural resources, develop robust defense mechanism, and mitigate risks and disasters.
And the Middle East is following suit. Indeed, IDC research suggests that 48 per cent of the region’s CIOs plan to implement big data technologies over the 2016-17 timeframe, while 51 per cent are planning to implement analytics such as business intelligence software as part of their IT transformation strategies.
The enterprise environment in the Middle East is clearly changing, with a significant increase in network-connected devices such as tablets, smartphones, sensors and detectors, along with increased application centricity within business processes. This has led to the generation of huge volumes of distinct data that cannot be processed by conventional data-processing applications.
Big data and analytics tools therefore have to be leveraged if forward-thinking enterprises are to be truly effective in the way they make business decisions, analyse customer spending behaviour, launch new product lines, enhance supply chains, identify geographical trends, and drive competitive advantage.
Increased connectivity has also led to IoT technology being used across various sectors, including automobile, construction, healthcare, and oil and gas, among others. The growth momentum of IoT solutions is dependent on the growth of the big data, business intelligence, and analytics market.
And the success of IoT solutions is reliant on enhanced data communication and processing abilities. In the current scenario, organisations are increasingly deploying IoT to provide cutting-edge solutions, which, in turn, is expected to boost the growth of the big data, business intelligence, and analytics market. Smart city initiatives in key Middle East countries like the UAE and Saudi Arabia are further emphasising the importance of data in improving communication between cities, citizens, automobiles, electronics, and devices with the overall smart city infrastructure.
The rise in competition across the region amid a challenging economic climate is also driving demand for simplified, but enhanced, data visualisation tools that can enable businesses to make smarter and more cost-effective decisions.
At the same time, continuous technological advancements in the field of big data and business analytics have led to a slight decrease in their implementation costs. As such, we will also begin to see SMEs leveraging data analytics tools as they search for valuable insights that will strengthen their footholds in the market.
Ultimately, the current and future business and economic scenarios in the Middle East region point towards a future that is less dependent on oil and more dependent on data. And in this scenario, it is big data and analytics technologies that will serve as the essential distillery for making sense of this valuable new resource.