Although the United Arab Emirates has numerous weaknesses in terms of information technology the country is, and will continue to be, an ideal place to locate an IT business. The market is lucrative and the demand is present.  A company; however, should seriously consider where to locate an IT business, or any business, in the UAE.  Establishing IT companies in any one of the free trade zones is highly recommended.  They offer unique privileges such as tax breaks and ownership rights that the rest of the country does not.  The most ideal location in the country currently to establish any business is in Dubai Internet City (DIC).  DIC was established solely for the purpose of technology related firms. 

In sum, it would be advisable to locate a small, medium, or large business in the UAE; however, only in one of the free trade zones.  Until similar IT centers are established in the lesser developed areas of the UAE it would not be financially prudent to locate a software or a hardware manufacturing firm outside of the free trade zones. Following are the primary strengths and weaknesses in the IT industry: 

Strengths: 

• Small population and country, making investments in the latest infrastructure technologies possible and cost effective.  Furthermore, the UAE is situated at the crossroads of Asia and the Middle East providing a potential market to almost 2 billion people.
• Virtually unlimited educational opportunities in information technology.  The major universities and education facilities around the nation are offering programs in telecommunications and information technology.  Furthermore, the UAE is beginning to make basic computer skills a key curriculum in lower education institutions. 
• Fully diversified telecommunication infrastructure. 
• No significant trade barriers to the presence of foreign competitors in the software market or hardware market.  This being said, the hardware and software market in the UAE is growing and will continue to grow.  A noticeable lack of industry-specific software programs, as well as other software is evident.  This would be an ideal market to enter in the UAE.
• Incredible government support of the telecommunications industry and infrastructure.  Policies aimed at inviting foreign technology firms into free trade zones such as Dubai Internet City and Jebel Ali Free Trade Zone will allow the UAE to continue its diversification efforts. 
• Large revenues from oil will increase GDP per inhabitant and living standards.  This will increase access to modern technology allowing it to become a mainstay in the society.  For example, even though access costs are high the majority of the people in Dubai, Abu Dhabi, and Sharjah can afford it.
• The UAE is regionally competitive.  Other members of the GCC (Saudi Arabia, Oman, Qatar, Yemen, Kuwait, and Bahrain) are following the precedent set by the UAE in terms of deregulation and liberalization, infrastructure modernization, and legal policies affecting the IT industry. 
• Free Trade Zones.  The countries ten free trade zones offer unique advantages to the IT industry.  The ability to ‘test’ software and hardware solutions in Dubai Internet City is a great incentive for establishing such a business.
• Growth in Arabic software packages in the UAE and Arabic speaking countries for business and other uses increases the potential user base of the Internet and computers, in general.  For example, the ARAB VISTA search engine no longer precludes Internet access by non-English speaking citizens.

• ETISALAT is a monopoly that controls telecommunication and Internet Access. This would limit foreign and local investment in telecommunications and Internet gateways.
• No significant manufacturing of hardware or software locally.
• The cost of Internet access is still very high.  Although many of the people in the modernized administrative districts (Abu Dhabi, Sharjah, and Dubai) are able to afford modern technologies other regions are lagging behind.  Until the gap between these regions and the remaining four districts (Ras al-Khaimah, Ajman, Al Fujayrah, and Umm al Qaywayn) is shrunk the UAE will not be a fully modernized state.