A new research report released yesterday by International Data Corporation (IDC) shows that the Middle East and Africa (MEA) enterprise hardware market (comprising servers and external storage) remained flat in 2015 when compared to the annual revenues seen in the previous year.

Referencing its latest Quarterly Server and Disk Storage Systems Tracker, the research firm announced that enterprise hardware revenue in MEA totaled $2.31 billion in 2015, describing the year as transitionary in nature with organisations gradually moving towards convergence and datacenter optimisation.

“The region’s enterprise hardware landscape has transformed significantly in recent times, with organisation’s across MEA now increasingly focusing on converged systems and cloud solutions,” says Swapna Subramani, Research Manager for enterprise infrastructure at IDC Middle East, Africa, and Turkey.

“Given the challenging economic and political conditions now characterising much of the region, convergence and optimisation are becoming key.”

In line with this trend, the region is seeing increasing adoption of new technologies like converged systems, while procurement of infrastructure for cloud environments is also on the rise. The converged systems market, which includes hyper-converged appliances, grew by 6% year on year in 2015, and IDC expects this growth rate to reach 12% in 2016.

“New datacenter investments will leverage converged/hyper-converged infrastructures to support both public and private cloud deployments,” says Subramani.

The MEA external storage market declined 3% year on year in 2015. ”The region’s storage dynamics are swiftly moving in two different directions,” says Subramani.

“First is the movement into low-cost, scalable storage, while second is the growth of internal storage, which includes the value of storage enclosed within application servers containing three or more mass storage devices.”

IDC expects the high-end storage market to witness considerable uptake in the region during 2016, primarily bolstered by projects within the government, telecommunications, and oil & gas sectors. “The availability of alternative modes of storage such as flash, internal storage, converged systems, and cloud storage are the key driving factors for the ongoing shift we are seeing within the MEA storage market,” says Subramani.

Year on year, the MEA x86 server market witnessed 2% growth in value but a 4% decline in volume in 2015. “IDC witnessed an increased focus on high-end servers in 2015 as a result of investments increasingly being directed towards datacenter and cloud infrastructure projects,” says Victoria Mendes, Senior Research Analyst for enterprise infrastructure at IDC Middle East, Africa, and Turkey.

“This trend has resulted in an increase in the market’s value despite the decline in server shipments.”

The UAE enterprise hardware market grew 3% in value year on year in 2015. “The UAE was not hugely affected by the oil crisis in 2015 with a number of projects underway in the telecommunications, government, and banking sectors,” says Mendes.

“However, in line with the prevailing economic sentiment of the wider region, 2016 is expected to see a minor decline in the enterprise space as a number of key projects are postponed and budgets are cut.”

Saudi Arabia is expected to be heavily impacted by the oil crisis and the ongoing conflict in Yemen. The Kingdom’s enterprise hardware market suffered a 12% decline in value year on year in 2015 and IDC forecasts a further 17% decline for 2016.

However, the longer-term picture is far less gloomy, with IDC expecting the Saudi enterprise hardware market to stabilise and exhibit a five-year compound annual growth rate (CAGR) of 5% through to 2020.

The Africa enterprise hardware market suffered a 5% year-on-year downturn in value in 2015. The continent was rattled by currency depreciation in key markets like South Africa and Nigeria, along with political instability in several pockets of Africa.

Stability is expected to return this year, however, with IDC forecasting year-on-year growth of 3% for the continent as a whole. Egypt was the sole bright spot in 2015, showing good signs of recovery with year-on-year growth in enterprise hardware spending of 25%.

The release of pent-up demand from the political turmoil of the 2013–2014 period was the key factor driving the strong performance of the Egyptian market in 2015, and the market is expected to remain relatively flat in 2016 with cautious investments moving forward.

With 35.4% share, HP retained top spot in the overall MEA server market for 2015 despite suffering a 5% year-on-year decline in revenue. Dell moved up to second spot and was followed by IBM in the third place.

The latest edition of ITU’s annual global ICT regulatory report, Trends in Telecommunication Reform 2016,charts and analyzes the challenges and opportunities facing today’s ICT regulators as services proliferate, platforms converge and network operators ready their infrastructure for the next round of data-intensive technologies, from 5G mobile to the Internet of Things (IoT).

The world’s most comprehensive overview of ICT policy and regulatory trends, ITU’s Trends in Telecommunication Reform 2016 brings together insights from a broad range of leading global experts to help regulators, ICT analysts and tech journalists gain a deeper understanding of the issues facing an increasingly broad array of ICT players – and consumers.

New ICT goods and services are bringing with them enormous social and economic disruption. But while there are many benefits to be reaped, the report highlights regulatory challenges that must be addressed to preserve the ‘level playing field’ considered essential to competition and innovation. With the theme of ‘exploring regulatory incentives to achieve digital opportunities’, the report emphasizes the growing importance of flexible, light-touch, technology-neutral regulatory principles which stimulate market growth while protecting the rights of consumers and encouraging new entrants.

“Information and communication technologies are now all-pervasive and will be central to helping the world meet all 17 Sustainable Development Goals. The role of ICT regulators in creating an enabling environment for ICT growth and development has never been more critical,” said Houlin Zhao, ITU Secretary-General. “ITU’s annual Trends in Telecommunication Reform report supports regulators around the world to put the right policies in place for their national markets.”

“To realize the full potential of the digital economy, policy-makers and regulators have a key role to play in building policy and regulatory environments in which new technologies can flourish,” said Brahima Sanou, Director of ITU’s Telecommunication Development Bureau. “This 16th annual edition of Trends in Telecommunication Reform focuses on regulatory incentives to achieve digital opportunities which I believe upholds the ultimate goal of regulators: serving consumers.”

Key findings of the 2016 edition:
Broadband investment

Capital expenditures on fibre infrastructure are expected to surpass USD 144.2 billion between 2014 – 2019.
More than 40 operators have launched or are planning LTE-A deployments worldwide; 88% of these operators are in developed markets.

The rise in consumer data consumption may spur more Wi-Fi investment.

Increasing numbers of existing operators, new entrants and financiers are developing alternative funding approaches for broadband network investments.

Investment in broadband infrastructure is also coming from more unlikely institutions such as hedge funds or corporates that do not traditionally invest in telecoms infrastructure.

Network Sharing

When network coverage becomes less of a competitive differentiator, operators may need to consolidate networks (through network sharing) as a means of moving away from infrastructure investment and towards developing innovative services.
Governments currently allocate spectrum mainly on a dedicated basis. New dynamic spectrum access (DSA) technologies allow devices to use spectrum where it is not being used in a particular geographic area, or at a particular time.

Network sharing can have many benefits but is not without risks, which can include: reduction in competitive intensity; potential for collusive dealing and information sharing; and reduced options for services-based competitors.

IoT

The mobile industry association GSMA predicts between 1 – 2 billion M2M connections by 2020. Some experts believe that the market for IoT devices will grow exponentially, resulting in over USD 1.7 trillion in value added to the global economy by 2019.

The simplest IoT technology — passive RFID tagging — is already widespread in retail, transit ticketing and access control.

Near-Field Communication (NFC) is now included in newer smart phones, enabling applications such as contactless payments.

More complex M2M systems can send information over cellular networks. Examples include electricity metre readings sent to energy companies and car airbag deployment notifications sent to emergency services. Literally hundreds of millions of M2M systems are being deployed around the world.

IoT technical standards have evolved from a variety of different applications and stakeholders with different aims and requirements, and more work is needed to integrate different standards frameworks. A uniform network of “things” is unlikely to develop in the medium term. Smart meters are unlikely to communicate directly with heart-rate monitors, or recipe planners. Some networks will use public infrastructure, others will be entirely private. Some applications will have high bandwidth and interactivity requirements (such as video surveillance), others may focus on transferring short bursts of information (such as smart meters).

For IoT to become a truly ubiquitous technology, the cost of tags, sensors and communication systems need to fall to a level where they are a very small fraction of the total costs of the objects to which they are attached, with readers also made easily available. Even the cheapest (printed) tags, known as Quick Response (QR) codes, have not yet generated high responses in consumer-targeted marketing campaigns.

High reliability levels also become important in large-scale systems that can include thousands of sensors, devices and readers.

Without adequate security, intruders can break into IoT systems and networks, accessing potentially sensitive personal information about users and using vulnerable devices to attack local networks and other devices. IoT system operators and others with authorized access are also in a position to “collect, analyse, and act upon copious amounts of data from within traditionally private spaces.”

A further privacy issue relates to the amount of personal information that can be derived from seemingly innocuous sensor data, especially when it is combined with user profiles and data from other sources.

Interoperability

The concept of ‘interoperability’ is much broader than just technical compatibility, with implications across all four key levels – technological, data, human and institutional.
Systems can increase interoperability by:

– providing greater opportunities for technical interconnection;
– being more open about the types of systems and services that can interconnect;
– supporting a greater variety of data; and by
– making it easier for humans to leverage the interconnections.

Interop can also increase opportunities to exploit the system. A system that has more points of access allows (1) more types of systems to connect, (2) processes data with fewer limitations (3) increases potential attack vectors and (4) creates more opportunities for nefarious actors to exploit data or to inject bad code.

Increased levels of interoperability tend to enhance user choice and autonomy.

Interoperability is not an end in itself, and doesn’t always have to be maximized. Instead, private actors and regulators must work carefully to optimize the level of interop necessary to meet their objectives.

Interop challenges include:

– increased complexity of interoperable systems, which may lead to decreased reliability, with downstream systems increasing reliant on upstream systems
– Increased homogeneity and less market diversity
– Decreased privacy because of a rising number of individuals with access to one’s personal information
– Threats to business models – as higher levels of interop are distributed unequally across a market. Some businesses may have a vested interest in maintaining lower levels of interop, allowing them to benefit from customer lock-in.

The Middle East and Africa (MEA) PC market suffered a 28.7% year-on-year slump in shipments in the final quarter of 2015, according to the latest insights from global technology research and consulting firm International Data Corporation (IDC).

Shipments fell for the third consecutive quarter in Q4 2015, with the decline representing the steepest ever recorded in the region for a single quarter.

In a shift from earlier quarters in the year when the decline in desktop shipments was notably less pronounced than the decline in notebooks, this time round both product categories declined at a similar pace.

Indeed, IDC’s Quarterly PC Tracker shows that desktop shipments declined 29.4% year on year in Q4 2015 to total 1.3 million units, with notebook shipments falling 28.2% over the same period to total 1.9 million units.

“Similar to the previous quarter, Turkey, the ‘Rest of the Middle East’ grouping (Iran, Iraq, Syria, Yemen, Afghanistan, and Palestine), Saudi Arabia, and Pakistan experienced the sharpest declines within MEA,” says Fouad Charakla, Senior Research Manager for personal computing, systems, and infrastructure solutions at IDC Middle East, Africa, and Turkey.

“The reasons for these declines varied from country to country, but included high levels political and economic instability and uncertainty, low oil prices, increasing security concerns, and volatile currency fluctuations, especially with the U.S. dollar becoming more expensive.”

Once again, the top three vendors remained unchanged in Q4 2015. The continued focus of these vendors on the commercial segment has contributed significantly to their ability to remain at the top of the rankings, since they combined to serve almost 70% of the region’s commercial PC demand during the quarter.

Overall, HP maintained the top spot in terms of market share, despite experiencing a fall of 27.4% year on year, while second-placed Lenovo suffered a decline of 29.9% on shipments. Dell, on the other hand, escaped with a mild decline of 8.7% year on year as the vendor had experienced a relatively slow quarter during the same period last year.

Declining slightly slower than the overall market at 23.2% year on year, Asus overtook Acer to claim fourth position, while Acer experienced the fastest decline among the top vendors at 42.9% year on year.

Similar to previous quarters, the local assembly of desktops continues to slow as a growing portion of end users opt for refurbished PCs, upgrades, or to prolong their refreshment cycle altogether as they increasingly shift their usage towards mobile phones and tablets.

“As market sentiment remains low, IDC expects to see a delay in the recovery of PC demand,” says Charakla.

“Overall, 2016 will experience a further decline on 2015, as growth is only expected to occur in the second half of the year. A slightly stronger recovery is expected during 2017, after which the region will continue to experience a period of slow growth over the longer term. As the growing popularity of smartphones and tablets will continue to inhibit demand for PCs, vendors and channels across the region are expected to plan and order cautiously so as to avoid being left with high inventory levels.”

Similar to IDC’s previous forecasts, there will continue to be a gradual shift in the weight of demand from consumers to the commercial segment as a growing proportion of home users switch from PCs to tablets and smartphones while commercial end users maintain a greater loyalty to PCs.

As a result, commercial demand for PCs in the region is expected to surpass that stemming from home users by the year 2017.