UAE ICT Market Size & Share Analysis - Growth Trends & Forecasts

UAE ICT Market Trends and Insights

Smart-city and 5G infrastructure build-out

Projects such as Dubai’s “Dubai Here” digital twin embed AI, IoT, and high-bandwidth 5G links to improve urban planning and citizen services, sparking fresh demand for edge platforms and analytics. Operator du has opened a 5G-A Innovation Center to field-test 5G-Advanced, lifting throughput and slicing options for enterprise verticals. Demonstrations at GITEX showed Ericsson streaming UHD video and AI-enabled security feeds over 5G networks, underscoring energy-saving designs that align with federal decarbonization goals. Qualcomm and e& are co-developing 5G edge AI gateways that tie into industrial automation, logistics, and energy management use cases.^{[1]Qualcomm, “Qualcomm and e& Collaborate on AI at the Edge to Drive Transformation,” qualcomm.com}

Cloud-first federal mandates and digital-transformation programs

The UAE Digital Government Strategy 2025 requires that all public services move online and targets 90% citizen satisfaction for digital channels.^{[2]UAE Government, “The UAE Digital Government Strategy 2025,” u.ae} Abu Dhabi’s Digital Strategy 2025-2027 extends this priority to data interoperability and AI adoption across agencies. These programs accelerate cloud uptake among ministries and state-owned firms, catalyzing parallel moves in the private sectors that seek regulatory alignment and procurement synergies.

Hyperscaler expansion driven by in-country data-residency rules

Local data-sovereignty clauses require customer data to stay within the UAE, prompting hyperscalers to build or lease regional zones. A 5 GW AI campus in Abu Dhabi, backed by G42 and US partners, shows the capital intensity of new builds. du and Microsoft plan a USD 544 million hyperscale facility, with Microsoft as the anchor tenant, broadening access to Azure workloads. Oracle’s multibillion-dollar regional expansion adds further choice while ensuring compliance with draft PDPL provisions.

Corporate-tax rollout spurring ERP upgrades (2025-26)

A 9% federal profit tax, effective in 2024, plus a 15% domestic minimum top-up tax for multinationals from 2025, push firms to modernize finance stacks. Automation modules that embed current tax tables and e-filing workflows top procurement lists, boosting demand for SaaS ERPs and specialized tax engines. Vendors report uptake of multi-currency ledgers and API-ready connectors that integrate with existing HR and procurement functions.

Cyber-security talent shortage and rising attack frequency

More than 50,000 cyberattacks strike government assets daily, yet employers struggle to fill over 2,000 open security roles, pushing entry salaries beyond AED 120,000 and senior packages past AED 500,000. Hybrid-cloud adoption compounds identity-management complexity, and the gap in certified specialists lifts project costs and lengthens deployment cycles.

High expatriate turnover inflating operating expenses

Frequent relocation of foreign IT staff forces companies into cyclical recruitment and training, eroding productivity. Golden Visa incentives help retention, yet global remote-work options sustain churn. Emiratization quotas aim for 2% nationals in private ICT roles, promising longer-term stability, though short-term hiring costs remain elevated.

Segment Analysis

By Type: IT services dominate as cloud accelerates

IT services account for 31.4% of the UAE ICT market in 2024, reflecting strong demand for managed operations, consulting, and migration expertise. Continuous 5G and edge roll-outs require integration partners, keeping utilization rates high. Cloud services, the fastest-growing sub-segment, post a 17.2% CAGR outlook as firms shift capital budgets toward scalable opex models. This transition enlarges the UAE ICT market size for vendors that bundle migration playbooks with security and compliance add-ons. Communication services are provided by e& and du, anchor connectivity layers, while hardware refresh cycles pivot toward energy-efficient servers that support data-center PUE targets.

A parallel rise in cybersecurity outlays surfaces as cloud perimeters expand. Identity-as-a-Service, XDR, and Zero Trust frameworks rise inside RFPs, boosting revenue for local MSSPs and global pure-play vendors. Software spending stays resilient, chiefly around ERP, CRM, and analytics stacks, as firms prepare for tax reporting and data-driven decision routines. Hardware imports decline slightly in unit terms yet grow in value as buyers opt for AI-optimized accelerators, storage class memory, and WiFi 7 routers.

Note: Segment shares of all individual segments available upon report purchase

By Enterprise Size: SMEs drive growth momentum

Large enterprises held 59.8% of the UAE ICT market share in 2024, leveraging multi-cloud estates and AI pilots to optimize operations in sectors such as aviation, energy, and BFSI. Migration of mission-critical SAP and Oracle workloads to local hyperscale zones underscores confidence in in-country resilience controls. The UAE ICT market size generated by SMEs, however, expands faster at a 14.9% CAGR, lifted by federal credit schemes and simplified VAT refunds that free cash for tech adoption. Government-backed Operation 300 bn grants ripple through manufacturing SMEs, underpinning investments in SaaS ERPs, e-commerce storefronts, and cybersecurity suites.

By Industry Vertical: Government leads while retail surges

Government agencies command 25.3% of 2024 spending as the UAE Digital Government Strategy funds AI chatbots, single-sign-on platforms, and fully digital permit workflows. Massive digital twin projects drive GPU clusters and spatial data analytics, positioning public entities as lighthouse adopters. The UAE ICT market size for retail and e-commerce grows quickest, 13.7% CAGR, supported by the D33 Agenda that earmarks AED 100 billion in annual digital transformation gains and seeks 90% cashless transactions by 2026. Retailers roll out omnichannel stacks that link storefront POS with last-mile logistics APIs and payment gateways.

BFSI remains a high-value vertical with real-time payments, open-banking APIs, and reg-tech compliance workloads. Telecom operators diversify into B2B cloud and security to offset saturated mobile revenues, while energy and utilities pilot digital field-service platforms to trim downtime and carbon intensity. Manufacturing uptakes industrial IoT and digital thread solutions that support predictive maintenance and traceability.

Note: Segment shares of all individual segments available upon report purchase

By Deployment Model: Cloud adoption accelerates

On-premise estates held 55.6% of workloads in 2024, driven by sovereign data needs in defense, health, and finance. Yet the draft PDPL raises compliance complexity for in-house teams, making managed cloud with local residency controls more attractive. The UAE ICT market share for cloud deployment rises fastest, with an 18.2% CAGR, propelled by new Abu Dhabi and Dubai availability zones that slash latency below 5 milliseconds to end users. Tier-IV data center builds equipped with direct-current power and liquid cooling improve sustainability scores, aligning with COP28-driven procurement metrics.

Hybrid architectures prevail, linking private hosts for sensitive data with public cloud for test, dev, and analytics bursts. Vendors package joint reference architectures, easing migration and disaster-recovery planning, which hastens workload movement over 2025-2027.

Geography Analysis

Dubai and Abu Dhabi jointly attract over 70% of national tech investment as they spearhead smart-city agendas and host most hyperscale zones. Dubai’s business-centric policy stack, plus free zones such as Dubai Internet City, lures multinational headquarters and drives large e-commerce volume.^{[3]International Trade Administration, "Digital and Information Communication Technology (ICT)," www.trade.gov} Its digital twin platform integrates 2D and 3D topologies across 40 agencies, illustrating mature inter-agency data sharing. Tourism-related operators deploy AI guest-experience bots that run on local cloud regions to meet residency mandates.

Abu Dhabi’s Digital Strategy 2025-2027 focuses on AI research and sovereign compute. The 5 GW AI campus, in partnership with US players, underscores its ambition to anchor regional AI training and inference workloads. The emirate funnels venture support through entities such as ADGM to nurture fintech, health-tech, and climate-tech startups.

Secondary emirates - Sharjah, Ras Al Khaimah, and Fujairah—promote sector-specific parks that emphasize education, manufacturing, and logistics, supported by targeted broadband upgrades. While their absolute spend remains smaller, double-digit growth in e-government rollouts and SME cloud adoption expands addressable markets. Inter-emirate fiber links reduce backhaul costs, allowing edge compute placement closer to population centers, which benefits real-time IoT services in logistics corridors connecting Jebel Ali, Khor Fakkan, and Port Khalifa.