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Oman Information Technology Report Q1 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: February 2008 Product Code: R302-2115 Description Market OverviewThe total size of the Oman IT market is forecast by BMI to increase from US$276mn in 2007 toUS$413mn in 2012. The government is investing in IT as a key element of its strategy to diversify theeconomy, and despite some risks, a favourable economic outlook is expected over the forecast period.The total IT spend is expected to grow at a CAGR of 8% over the forecast period from 2007 to 2012.Oman is one of the smaller IT markets in the region, and the emphasis on diversification is encouraginginfrastructure projects in sectors ranging from tourism to ports. With the US-Oman Free Trade Agreement (FTA) opening the gateway to more IT imports, nearly allsectors are feeling the benefits of recent high oil prices and improved performance of the nonhydrocarboneconomy, The PC market performed well in 2007 due to strong demand for notebooks aswell as important projects in sectors like government, oil and gas, and telecoms. Telecoms liberalisationand compliance with banking regulations are positive drivers of opportunities in these sectors. Industry Developments The continuing development of e-government in Oman received a boost towards the end of 2007 with thelaunch of the government’ new national electronic web portal. The portal, developed by the country’s ITAuthority (ITA) was officially inaugurated in November 2007 and will allow citizens to pay taxes, feesand fines to government institutions. The new portal is part of the ‘Digital Society’ government projectlaunched by the ITA in June 2006. In 2007 the ITA launched a new phase of the digital Oman project and during the next five years anumber of new services will be rolled out to connect citizens and the government of Oman.Information Technology is expected to be one of the key sectors to benefit from the US-Oman FTA, thatwas signed by President Bush in November 2006. The ultimate vision of policy makers is to establish afull Middle East FTA by 2013. Moves towards trade liberalisation and the creation of a Gulf Co-operationCouncil (GCC) Free Trade Area are among the drivers of IT market growth in BMI’s forecasts. Company News The continuing strong growth in PC sales in 2007 in Oman and across the region did not significantlyalter a competitive landscape dominated by international players such as Acer, Hewlett Packard (HP)and Dell. The strongest challenge to these main players comes from other multinationals, with ToshibaOman Information & Technology Report 2008making particular progress. The strong position of multinationals can partly be attributed to the highdemand for notebooks, which remains the most dynamic type of computer. Another factor is the regionaldemand for enhanced functionality rather than simply low prices. With growth expected to continue to increase steeply, vendors are positioning themselves to defend andexpand market share. Part of the challenge for vendors in the region is to establish the right distributionstrategy, and in particular achieve the right relationship with channel partners. Dell recently appointedAsbis, better known for its strength in whole components, as a dedicated distribution partner for Oman.Services are set to be the fastest growing area of the market over the next few years and this is promptingsome consolidation. The most notable deal in 2007 came with HP’s purchase of Atos Origin MiddleEast (AOME), formerly the largest systems integrator in the region. Meanwhile new Siemens ITSolutions and Services Company entered the Oman market in 2007 and will focus on industry-specificsolutions particularly for government and airports. Computer Sales According to BMI estimates, the Oman PC market (including notebooks and accessories) was worthUS$99mn in 2007, within an overall computer hardware market of around US$126mn. CAGR forhardware spending is expected to be at least 7% over the forecast period through 2012. General marketdrivers include the growing popularity of notebooks, the government’s ‘Towards Digital Oman’ strategy,and the elimination of custom duties within the GCC. Software BMI predicts a legal software market value of US$72mn in 2007, rising to US$112mn by 2012. CAGRfor that period forecast is around 9%. With greater attention now being paid to intellectual propertyissues, and particularly following the signing of the FTA, the e-software (mainly import) market isexpected to grow significantly. The evolution of the IT market means a stronger enterprise focus onsoftware spending is being seen, with companies preparing to compete in a regional environment ofgreater trade freedoms. Services Oman’s IT services market was estimated by BMI at US$77mn in 2007 and should rise to at leastUS$120mn by 2012. IT services revenues CAGR is forecast at 9% for the period through 2012. Currentlysupport services still account for around one-third of spending, with consulting and integration thesecond-largest category, followed by managed services. Although the market remains relativelyimmature, tighter margins in the hardware segment are encouraging vendors and retailers to seek profitsthrough value addition and greater emphasis on customer services. Table of Contents
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