Market Introduction
Digital Services refer to the delivery of electronic data & content to the desired end-users using devices like smartphones, computers, etc., to revitalize business functions, culture, and customer experiences and meet changing business & industry requirements. UAE has emerged as the business hub for the entire Middle East & Africa. The BFSI & IT industries of the country are booming at a rapid pace. Foreign investments in these industries are registering an uptrend while digital transactions are exponentially increasing. Moreover, the UAE government is highly proactive toward ensuring the last-mile delivery of social benefits to their citizens.
Market Insights
The UAE Digital Services Market is projected to grow at around 9.49% CAGR during the forecast period, i.e., 2022-27. Across the Middle East, the UAE has been an early adopter of advanced technologies, such as cloud computing, Blockchain, Artificial Intelligence (AI), facial biometrics of citizens, Machine Learning, among others. It, in turn, has led to the rapid adoption of digital services in diverse sectors, including BFSI, telecom, government, healthcare, oil & gas, etc.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2017-20 |
| Base Year: 2021 | |
| Forecast Period: 2022-27 | |
| CAGR (2022-2027) | 9.49 % |
| Region Covered | Dubai, Abu Dhabi, Sharjah & Rest of Emirates |
| Key Companies Profiled | AWS (Amazon Web Services), Microsoft Azure, Google Cloud, Oracle Cloud, Alibaba Cloud, Etisalat, Protiviti, Intertec Systems, Cloud4C Services FZ LLC, BIOS Middle East Group, Orixcom, eHosting Datafort, DATAMATICS Global FZ LLC, Others |
| Unit Denominations | USD Million/Billion |
The digital services market in the UAE has witnessed exponential growth during 2017-20. Favorable government policies for process automation, paperless economy, Industry 4.0, etc., have augmented the demand for digital services like cloud services, business automation, analytics, etc., across the country. For instance:
Moreover, initiatives like the National Innovation Strategy that aims to develop a culture of innovation among individuals & organizations, coupled with the TRA Vision that focuses on promoting electronic transformation while encouraging innovation across the UAE, have also bolstered the Digital Services Market in the country to a greater extent.
The country has also designed a Digital Transformation Strategy to strengthen its economy. As per the strategy, the government has launched an e-Health Information System, Digital Education, Basher (a digital platform that helps establish a business in the UAE within 15 minutes), cyber security modules for citizen safety, Unified National Digital Housing Platform, etc. These ongoing digital transformations initiated by the UAE government would continue boosting the demand for Digital Services across the country in the coming years.
Impact of Covid-19 on the UAE Digital Services Market
The Covid-19 pandemic in 2020 exponentially catalyzed the digital transformation in the UAE, with the surging adoption of smart technologies & effective digital solutions across both government & private entities. Eventually, the demand for digital services like cybersecurity strategies, business intelligence services, robotic automation, integrated cloud, and technology consulting observed exponential growth amidst the pandemic.
The sectors, such as BFSI, healthcare, IT, retail, etc., initiated several plans to deploy technologies like AI, automation, cybersecurity, etc., to accelerate the pace of existing systems and alleviate the impact of the pandemic. In addition, the UAE government also rolled out a digital strategy to provide end-to-end digital services 24*7. As a result, several organizations prioritized digital transformation by moving their business functions to the cloud to infuse increased agility & encourage customer engagement.
The BFSI sector has immensely benefited from the pandemic due to the paradigm shift of consumers from offline to digital transactions. The rise in the number of contactless & cashless transactions to minimize physical interactions significantly propelled the market growth in the country. Furthermore, owing to a significant surge in cashless transactions, banks & financial intermediaries also augmented the adoption of digital platforms to minimize online banking costs for consumers.
Key Trend in the UAE Digital Services Market
Electronic signatures are recognized legally in the UAE. In 2021, the country made several reforms to the existing regulations. As per new regulations, digital signatures of individuals hold equal weightage as physical ones and can be used for any civil or commercial transaction, including marriage, personal status, notary, and real estate services, such as renting, buying, selling, & amending contracts.
The e-Signature option is gradually witnessing acceptance among several organizations in the UAE with the ongoing digital revolution. The utilization of e-signatures is expected to witness considerable growth due to the mounting penetration of digital banking platforms, rise in stock trading activities, and mounting digitalization of healthcare records.
In addition, the Government of Dubai, in December 2021, announced that all its operations have become entirely paperless. All the government work, transactions, processes are now managed online through an integrated platform to provide a smart, easy, and better life to the UAE citizens. This major strategic event would bolster the growth of digital signatures across the country over the forecast years. The paperless strategy of the Dubai government that started in 2018 has achieved its final summit, and all 45 government departments are now paperless. This strategy has helped save more than USD 350 million in revenues, 336 million paper, and over 14 million man-hours for Dubai Government.
Market Segmentation
By Service Type:
During 2017-19, the demand for application services witnessed firm growth due to their extensive usability across small & large enterprises to enhance their daily operations. CRMs & ERPs have dominated the market due to their central role in managing routine operational activities, along with client servicing. However, the demand for solutions like e-signatures has been propelling due to the UAE government’s initiatives on the paperless economy and regulations for encouraging the use of electronic signature solutions like DocuSign, etc., for verifying documents. Also, the implementation of application services over cloud architecture has been a key contributor to the adoption of software like ERPs, CRMs, document management systems, etc., since they provide affordability, scalability, and low latency. Moreover, the digital service providers are have been largely dependent on establishing partnerships with end-users to provide them with digital solutions. For instance:
By Organization:
Of both, the Government sector has been the pioneer adopter of digital technologies in Dubai, with burgeoning investments in digitalizing the operations and opting for smart practices to improve the city management, cyber security, and governance. Various government initiatives have been implemented in the historical period to enhance the integration of digital solutions & technologies to achieve the above-mentioned goals of the Dubai Government, which, in turn, have boosted the demand for digital services across the region.
Moreover, the mounting push toward creating a connected environment, with the growing number of smart cities, is another crucial aspect attributed to the surging demand for digital services across Dubai. For instance:
By Industry:
Here, the BFSI sector held a considerable share in the UAE Digital Services Market in the previous few years, mainly due to the increased adoption of solutions like online insurance & banking platforms, digital loan management, etc., by private banks in Dubai. For instance:
Moreover, the banks in Dubai are increasingly focused on establishing partnerships with digital banking providers to support the growing Fintech ecosystem across Dubai, which shall strongly contribute to the growth of the UAE Digital Services Market in the years to come.
Regional Landscape
Geographically, the UAE Digital Services Market expands across:
During 2017-20, the Digital Services Market in Dubai has seen noticeable growth since the country is an early adopter of advanced technologies like cloud computing services created for building, testing, deploying, and managing applications & services to optimize the operational efficiency among organizations. Moreover, the implementation of Artificial Intelligence (AI) & Machine Learning has helped create experiences that are highly personalized, frictionless, & easy to navigate.
Additionally, favorable government policies for process automation, paperless economy, industry, etc., have also augmented the demand for cloud services, business automation, data analytics, etc., across the region and, in turn, has boosted the market.
Dubai has been the epicenter of growth for digital services with the extensive investments & integration of digital technologies for governance & city planning, efficient work planning, and its management both by the government & private entities. With the growing dependence on digital technologies, the Dubai Digital Services Market has observed significant growth & provided more opportunities for the service providers to expand their presence across the region. For instance:
Furthermore, the Covid-19 pandemic has shifted the focus of consumers, employees, & partners toward digital habits, i.e., encouraging businesses to digitize their operations entirely. During the pandemic in 2020, Dubai police launched a new surveillance camera project powered by Artificial Intelligence named Oyoon, which could check the temperatures of people passing by and ensure 6-feet social distancing measures. Similarly, Dubai International Airport, Dubai's Silicon Oasis, etc., have also installed several high-tech surveillance cameras, owing to which the city has experienced an uptick in the demand for digital services.
Market Dynamics:
Key Driver: Government Support for Digitalization
The UAE has observed a significantly rising demand for digital services during 2017-20, primarily due to the mounting penetration of the internet & social media, increasing investments in smart city (smart homes, building automation, etc.) initiatives by the government, and rising digitalization in businesses to improve operational efficiency. According to the World Bank, in 2020, around 99.2% of the total population in the UAE had access to the internet. The rising adoption of advanced technologies like Cloud, IoT, AI, & Big Data, coupled with various strategies undertaken by the Telecommunication & Digital Government Regulatory Authority (TDRA), are the key aspects projected to drive the expansion of the UAE Digital Services Market during 2022-27.
Key Questions Answered in the Market Research Report:
Market Outlook, Segmentation, and Statistics
Frequently Asked Questions
A. The UAE Digital Services Market is projected to grow at around 9.49% CAGR during 2022-27.
A. The Healthcare & BFSI sectors are projected to emerge as areas of remunerative opportunities for the leading players in the UAE Digital Services Market through 2027.
A. Various initiatives by the UAE government to digitalize social services and promote the development of smart cities & intelligent transport services are the key growth opportunities for the leading players in the UAE Digital Services Market during 2022-27.
A. The Covid-19 pandemic had a catalytic effect on the UAE Digital Services Market in 2020. Presently, the UAE is witnessing a considerable surge in funding toward digital transformation & technological infrastructures by the government to combat the pandemic, which would act as a game-changer for the market in the coming years.
