Information Technology in the UAE

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SOFTWARE DEVELOPMENT
Summary:
The software market is robust in the UAE, especially compared to other countries in the region.  The lack of significant trade barriers to the presence of foreign competitors has spurred the growth of the industry. The UAE is neither a net outsourcer of software nor is it recognized as a global or regional player in the industry.  The domestic market includes both distributors of imported products and to a lesser extent, developmental firms.  Indian-owned companies are prevalent; however, Microsoft and Oracle still dominate the market.  There is plenty of room for growth as numerous untapped sub-sectors still exist.

General:
The UAE does not impose significant trade barriers to investors and companies in the domestic software market, which makes it an ideal place to operate such a business.  Software companies from around the world are drawn to the UAE free trade zones for tax-free, relatively unhindered competition.  Outside of the free trade zones; however, the software market is marginal, at best.  The prime geographic areas for the software industry are unquestionably Dubai and Abu Dhabi, with limited investment in Sharjah. 

Although the government does not enforce ISO-9000 certification requirements, it is quickly becoming the industry trend.  This trend will allow further recognition of the UAE as a leader in information technology.  The UAE has taken the necesary steps to "stay in the game".  In order to further increase its standing in the software market additional free trade zones will need to be established to encourage foreign investment throughout the entire UAE rather than in just Abu Dhabi, Sharjah, and Dubai.


Sub-Sectors:
The majority of the software companies are based in Abu Dhabi and Dubai, specifically in the free trade zones.  Only about 3 percent are based in Sharjah.  Games and educational software programs are prevalent and mirror those found in the United States and other advanced countries.  However, there is a noticeable gap in indsutry specific programs, human resources management software, and decision-making software in the market (1). 
The following chart shows the number of companies in each of the sub-sectors of the software industry.  The number of companies is derived from the UAE pink pages, which is the U.S. equivalent of the yellow pages.  A specific breakdown of the number of foreign versus domestic competitors is not available.
 
Sub-Sector
 # of Companies
Communications Consultants
2
CAD/CAM 
18
Computer Bureau Services 
8
Computer Graphic Services
13
Computer Multimedia Products
22
Computer Network Systems
96
Computer Repair and Maintenance
48
Computer Software
206
Computer Software Arabization
3
Computer Training Services
103
          *UAE Pink Pages
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UNITED ARAB EMIRATES

 
 
Export/Import Market:
The UAE is not an exporter of computer software technology.   Local production of software technology accounts for only about 40 percent of the market, or $6 million.  The remainder of the market ($9 million) is from imports. The following chart represents data from 1997.  It is highly probable that the dollar amounts have grown significantly in the last three years; however, these are the latest available statistics:
Import Market
$9,000,000
Local Production
$6,000,000
Exports
0
Total Market
$15,000,000
Imports from U.S.
$6,000,000
* Services included in this table are consulting, outsourcing, Internet/Intranet connectivity, development of customized software, software maintenance, software training, and network services.
Primary Players:
Foreign Software Companies: Microsoft, Lotus, Word Perfect, Word Star, Arabic Universal Word, Oracle, Novell, IBM, Digital Equipment, Compaq, HP, Sun Microsystems, NCR, Netscape, Informix, NCR, Bay Network, and CISCO.

Foreign Software Consulting Companies: Andersen and GE Information Systems.

Local Software Companies: ITS, Cyber-Gear, Emirates Information Technologies, Emirates Computers, Gulf Computers, Search Inc., Dubai On-line, EMITAC and Netventures.(2)
 
Impacts of National Information Technology Environments on Business
Kogod School of Business
The American University