In 2010, IT spending is expected to increase but IT will be focused on process efficiencies, cost savings and value creation. According to a recent research by IDC, the MENA region is set to see IT spending grow by 12% in 2010, compared to the global average of 3%, making the region one of the world’s fastest-growing regions for IT expenditure. The UAE leads the way in the MENA region and is forecast to spend $4.79bn on IT this year, an increase of 12.4% on last year.

Interestingly, a high proportion of this spending is going towards using some form of Managed IT Services. According to IDC predictions for 2010, IT services is forecasted to constitute 23% of all IT spending in the UAE.

The key factors driving businesses down the Managed Services route are IT-business alignment, consolidation and centralization, flexible business models (CAPEX to OPEX), skills shortage, management of data explosion and compliance and governance requirements.

The Data Centre business model is also evolving from traditional physical servers to virtualization and cloud computing.

According to a Gartner report, “By 2012, 40% of hardware infrastructure spending will be as a service.”

“9 out of 10 companies plan to increase their use of Software-as-a-Service (SaaS) in 2010 for reaping the benefits of the flexibility of anywhere access, minimized time and risk of deployment and reduced capital investment through operational efficiencies.”

A recent survey by IDC indicates that virtualization remains the most important Data Centre issue – 70% of surveyed CIOs have this on their short-term agenda.

Researched statistics state that the volume of market opportunities from the global Cloud Computing industry is estimated to be worth a whopping AED 589 billion (US$ 160 billion) by 2011. However, there is limited adoption of IT Cloud Services in the region as concerns around security still remain.

According to an IDC survey, IT management styles are mirroring the economic outlook with 29% of all organizations planning to invest in projected growth areas, 30% of all organizations planning on having a flexible arrangement with suppliers, another 30% planning on developing contingency plans and only 11% delaying discretionary spend.

All in all, the IT budget outlook for 2010 appears positive and companies are looking at IT as an enabler for business operations.