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BMI View: Egypt's IT market bounced back from a slowdown at the height of political crisis in 2014 and
2015, and we expect strong growth to occur over the medium term. However, the growth is expected to be
slightly slower than it was immediately after the crisis when pent-up demand pushed growth even higher. A
combination of population and income growth are positives for the retail market where there is still scope
for vendors to target increasing PC penetration. In the software and services segment growth potential is
even faster as the public and private sector modernises. However, there is a downside, primarily from
political and security risks that could potentially undermine the economic growth trajectory.
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? Computer hardware sales are predicted to increase from EGP8.9bn in 2016 to EGP12.3bn in 2020, a
compound annual growth rate (CAGR) of 8.4%. There will be a small downgrade to reflect the greater
threat of smartphone cannibalisation, but population and income growth, and educational procurement
will support the segment and maintain growth.
? Software sales are forecast to increase from EGP3.3bn in 2016 to EGP5.5bn in 2020, a CAGR of 13.3%.
Piracy is still holding back software sales and overall the software market in Egypt is of a low value, but
Software as a Service (SaaS) provision is expected to help counter piracy and deepen the market to
accelerate spending growth.
? IT services sales are predicted to increase from EGP4.9bn in 2016 to EGP8.2bn in 2020, a CAGR of
14.1%. Cloud services will be an area of outperformance as vendors target opportunities presented by the
low on-premises penetration of legacy solutions.