The Middle East has emerged as the fastest growing market in the world in terms of percentage growth in revenue for Wipro Infotech, said the regional head of the firm, a division of the $6 billion Wipro Limited, India's number three software services exporting firm.
“During the last three years, our compounded annual growth rate in the Middle East has been close to 100 per cent in terms of revenues and the region is the fastest growing market for us in terms of percentage growth globally, faster than the US, Europe, India, and the Asia Pacific,” Anand Sankaran, Senior VP and Business Head for India, Middle East and Africa, Wipro Infotech, told 'Emirates 24|7'.
The Bangalore-based firm dedicated to India, Middle East and Africa geographies and providing IT products and services ranging from application development, application maintenance, application integration to infrastructure services, systems integration, consulting services, has the UAE and Saudi Arabia as the two largest markets in the region.
He said last year the India, Middle East and Africa market generated a consolidated annual revenue of $1.65bn for its IT services and IT product businesses, out of which Middle East’s and Africa’s share constituted about one-fifth ($300 million).
Saudi Arabia continues to be the fastest growing market for the firm in the Middle East and Africa region in terms of revenue and customers, he said.
However, the UAE is not far behind [in terms of revenue and number of customers], he added.
“Abu Dhabi is a good market for us. Even Dubai is seeing some good projects in spite of whatever slowdown happened over the last 12 months. Out of $300 million of revenue, two-third is the share of Saudi Arabia while the rest one third is the share of the UAE,” he added.
This region [Middle East] will continue to propel the firm’s growth, Sankaran said, adding the firm is also looking at expanding its presence in the regional market, especially in Qatar, Kuwait and parts of Africa.
“Apart from the UAE and Saudi Arabia where we have a good presence, we are also looking at consolidating our business in Qatar both in terms of people as well as facilities as Qatar has grown pretty well for us in the last 12 months,” he said.
We are targeting a few marquee projects in Qatar and therefore we would be adding more business development force in that market going forward. We are also looking at expanding in Kuwait, though selectively and we’ll look at doing business with certain large customers in Kuwait, and Oman. We’re also looking at making some big investments in Africa,” Sankaran added.
Asked the reasons behind this stupendous growth of the IT products and services sector in this region, he said: “We are seeing growth in infrastructure (especially in Saudi Arabia), banking (especially in Qatar), and in telecom and oil & gas all across the region. Public sector is another growth area.
Governments are increasing expenditure in a big way in various sectors such as education, healthcare, etc.”
Although Wipro Infotech has not gone ahead with any acquisitions so far in the region, the firm is open to that, he said.
“We are not close to acquisitions but we will continue to evaluate target companies that are up for acquisitions. If there is any target organisation that can give us complimentary capabilities, we would be absolutely open to look at it with an open mind,” Sankaran said.
According to International Data Corporation’s (IDC) latest estimates, double-digit growth is forecast this year in the IT (information technology) markets of Middle East & Africa, apart from central and eastern Europe and Latin America.
The global spending on IT surged to its fastest rate of growth since 2007 last year, driven by pent-up demand for hardware upgrades and infrastructure investment after the financial crisis and global recession of 2009. The global IT market grew by eight per cent year over year to more than $1.5 trillion at constant currency.
The US IT market grew by 6 per cent in 2010, and will expand by another 5 per cent this year, but emerging economies are again leading the way and driving the overall growth of the global industry to higher levels, IDC study said.