Bahrain Information Technology Report 2013

Executive Summary

BMI View: The total size of the addressable Bahrain IT market in 2013 is forecast by BMI to beUS$372mn, up from an estimated US$346mn in 2012. BMI forecasts a CAGR of 8% for 2013-2017.

Bahrain's strong financial sector will continue to provide opportunities for vendors in the post-creditcrunch era, although we do not see IT spending returning to its previous rate of growth during our fiveyearforecast period. Global IT trends such as cloud computing, virtualisation and convergence willcontinue to gain ground in the Bahraini market.

Headline Expenditure Projections

Computer hardware sales: US$219mn in 2012 to US$233mn in 2013, +6% in US dollar terms.Forecast in US dollar terms upwardly revised due to macroeconomic factors and the release ofWindows 8 should provide a boost to replacement PC purchases.

Software sales: US$41mn in 2012 to US$44mn in 2013, +7% in US dollar terms. Forecast in US dollarterms downwardly revised due to macroeconomic factors but there are evolving opportunities in thefinancial sector.

IT services sales: US$94mn in 2012 to US$91mn in 2013, +8% in US dollar terms. Forecast in US dollarterms downwardly revised due to macroeconomic factors but emerging areas such as cloud computingand virtualisation will drive investments.

Risk/Reward Ratings: Bahrain's score was 48.3 out of 100.0. Bahrain remained in seventh place in ourlatest MEA RRR table, behind regional peers Qatar and Kuwait, but ahead of Oman and Lebanon.

Key Trends & Developments

Bahrain is becoming an important financial hub and there is a substantial opportunity as banksinvest to support new services and regulatory compliance. Virtualisation solutions are set tobecome increasingly popular in the financial sector as banks look to save on hardware andenergy costs. Meanwhile, the government has also embarked on a journey towards cloudcomputing, launching a plan for consolidation and virtualisation of its IT infrastructure.

Cloud computing development has been relatively slow in Bahrain compared with some othermarkets but in September 2012, Batelco, the leading local telecom service providers, launchedan infrastructure management platform called IMaaS. Software vendors were also rolling outnew hosted solution offerings in the Bahraini market, targeted at private enterprises as well aspublic sector organisations.

Enterprise applications should account for around 30% of software spending, as the market forenterprise resource planning (ERP) applications is far from saturated. New cloud computingofferings should fuel further demand from end-users to utilise this technology.