International Data Corporation (IDC) has set spending on blockchain solutions in Africa and the Middle East to more than double in 2018.
Forecasts from the Worldwide Semi-Annual Blockchain Spending Guide
The global technology research and consulting firm recently introduced Worldwide Semi-annual Blockchain Spending Guide which indicates blockchain spending in the region sums up to $80.8 million in 2018, a 107 percent rise from $38.9 million spent in 2017.
“There is clearly an immense amount of interest [in] distributed ledger technologies (DLT) in the region. This is being driven by the pressing need for organizations to improve their efficiency, agility, security, and integrity. In 2018, we expect more organizations across MEA to move beyond the evaluation and proof-of-concept phase to pilots and even deployments,” Megha Kumar, IDC’s research director for software in the Middle East, Africa, and Turkey said.
IDC expects blockchain spending in the two regions to hit $307 million in 2021 which represents a 77.4 percent compound annual growth rate (CAGR) for the period 2016 to 2021.
IDC research implies the regions’ public sector will use about $120.8 million (39.2 percent) in the blockchain in 2021. Financial services will use 35.5 percent while distribution and services sector will use 14.1 percent of the estimated expenditure.
“In the Middle East, Dubai’s government has identified blockchain as a major technology for helping it become a leader in the Smart Cities arena,” Kumar said. “Alongside the establishment of the Global Blockchain Council, Dubai’s ‘Blockchain Strategy’ aims to promote efficiency [in] government services and fuel economic development. […] In Africa, meanwhile, DeBeers intends to launch an industry-wide blockchain platform for tracing and authenticating diamonds, which highlights the integrity benefits of the technology.”
IDC predicts that the most widespread blockchain use cases in 2021 will be identity management, assets and goods management, and cross-border payments and settlements. These three use cases represent 33.1 percent of MEA blockchain expenditure in 2021.
“At this stage, it is still early days for blockchain, with technology vendors, start-ups, fin-techs, and end users continuing to discover new types of use cases,” Jebin George, IDC’s program manager for verticals in the Middle East, Africa, and Turkey said. “Some of these may never go mainstream, stalling at the proof-of-concept stage as they fail to bring in the scale of efficiency that was meant to be achieved.”
In technology, IDC predicts that IT and business services will account for 52.7 percent of the two regions’ 2021 spending. Additionally, blockchain software platforms will be the largest and fastest-developing in the software space while the cloud will be the fastest-developing component in the hardware space.
IDC’s Worldwide Semi-annual Blockchain Spending Guide looks into emerging blockchain markets by offering expenditure data for 10 technologies in 19 industries and 14 use cases in 9 regions. However, the guide does not offer spending data connected with cryptocurrencies that use the blockchain and other digital ledger technologies.
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