The Rise of IT Consultancy in the the Middle East

In recent years, the Middle East, particularly the Gulf Cooperation Council (GCC) region, has emerged as one of the world’s fastest-growing hubs for digital transformation. Fueled by sovereign agendas (e.g. Saudi Vision 2030, UAE’s AI and diversification strategies), regulatory modernization, and rising expectations from both public and private sectors, demand for IT consulting, ERP implementation, and digital advisory services has exploded.

This blog surveys the macro trends, regional dynamics (with emphasis on UAE and Saudi Arabia), talent and capability challenges, and strategic positioning for IT consultancies aiming to succeed in this fast moving environment.

Macro Landscape & Market Growth

GCC / Middle East Consulting Market at a Glance

• The GCC management consulting services market is projected at USD 6.83 billion in 2025, with a CAGR of approximately 4.70% through 2030. Mordor Intelligence

• Across the Middle East (beyond GCC), the management consulting services market is estimated at USD 8.62 billion in 2025, forecast to reach USD 10.77 billion by 2030 (≈ 4.56% CAGR) Mordor Intelligence

• In the UAE, the management consulting market is expected to reach USD 2.55 billion in 2025, growing at ~6.04% CAGR to USD 3.42 billion by 2030. Mordor Intelligence

• Other sources highlight that the UAE consulting market saw a 15.2% year-on-year increase recently, valued at USD 1.1 billion, with Dubai and Abu Dhabi as the growth engines. Consulting Quest

• In Dubai specifically, the consulting market is estimated at USD 3.8 billion (2025) with ~11–13% annual growth. thethinksters.com

  
  

These numbers affirm your input broadly, though be cautious: different sources segment “management consulting,” “IT consulting,” or “digital advisory” differently. But the consensus is that this is a high-growth region with strong structural tailwinds.

Drivers of Growth

1. National Transformation Agendas

   • Abu Dhabi’s newly approved AED 13 billion (USD 3.54 billion) digital strategy (2025–2027) aims to embed AI across all government services, with sovereign cloud adoption and a projected GDP contribution of AED 24 billion by 2027.

   • Saudi Arabia’s Vision 2030 and massive public investment (including a recent $40B AI investment plan) underpin sustained demand for IT consulting, particularly in AI, cloud, cybersecurity, and data architecture.

   • Free zones, smart cities (e.g. NEOM), and giga-projects are funneling capital into infrastructure, sustainability, and digital operations transformation.

2. Regulatory & Compliance Imperatives

   • ESG compliance, climate targets (e.g. UAE’s Net-Zero 2050), and mandatory disclosures push firms to engage external advisors with domain expertise. (Matches your data on ESG/green consulting growth.)

   • Digital regulation (data localisation, privacy, e-invoicing mandates) forces companies to rethink their IT architectures, which in turn drives consulting demand.

3. Enterprise Modernisation & Legacy Tech Debt

   • Many legacy enterprises (in energy, utilities, oil & gas, government) face modernization pressure - migrating on-prem systems to the cloud, adopting microservices, rearchitecting data platforms, deploying ERP/SCM upgrades.

   • The rise of AI/ML, IoT, blockchain, edge computing, and analytics means organizations must bring in outside expertise to manage architectural complexity, change management, integration, and governance.

4. SME Digitisation & Democratisation of Consulting

   • While large enterprises and governments represent the majority of spend today, small and medium enterprises (SMEs) are increasingly adopting consulting engagements via modular, “pay-as-you-go,” or platform-based advisory offerings.

   • In UAE, SMEs are projected to have a higher CAGR in consulting adoption than larger firms. Mordor Intelligence

5. Capability Centers & Shared Services Hubs

   • The Middle East capability centers market was valued at USD 4.2 billion in 2024 and is expected to reach USD 24.67 billion by 2032 (CAGR ~24.9%) snsinsider.com.

   • These hubs often outsource or partner with IT consultancies to deliver services (ERP support, analytics, DevOps) within regional cost/skills arbitrage models.

     
     

Regional Deep Dives

UAE (Dubai & Abu Dhabi)

Dubai

• Your figure of USD 3.8 billion in 2025 and growth rate of 11–13% aligns with observed market commentary. thethinksters.com

• Dubai is a leading financial, logistics, and real estate hub; its smart-city initiatives, digital government transformation (Smart Dubai), and the density of international firms make it a fertile consulting ground.

• The city houses many free zones (DIFC, DMCC) which attract fintech, innovation, and crypto/chain startups requiring advisory services.

Abu Dhabi

• The AED 13 billion AI initiative (2025–2027) represents a generational tech program that will generate multi-year consulting demand.

• Furthermore, Abu Dhabi’s moves toward sovereign cloud, AI-first government services, and digitization of public services signal long-tail consulting pipelines in architecture, governance, data, and citizen services.

• The strategic push for Emiratisation and local talent development also opens consulting roles in HR, training, and organizational change.

  
  

UAE-wide challenges & opportunities

• The UAE consulting market is fairly mature; barriers include margin pressure, competition from global players, and cost-sensitive clients.

• On the flip side, segments like technology consulting, data services, cybersecurity, AI governance are among the fastest-growing. Mordor Intelligence

• Adoption of hybrid delivery models (on-site + virtual) is gaining traction: although on-site consulting retains a majority share, remote/hybrid modes are growing. Mordor Intelligence

• Large enterprises currently capture ~78% of consulting spend; SMEs are seen as the high-volume growth lane. Mordor Intelligence

Saudi Arabia & Broader GCC

• The IT services market in Saudi Arabia is projected at USD 20.09 billion in 2025, with forecast CAGR of ~17.9% to USD 45.77 billion by 2030. This suggests enormous digital infrastructure and platform demand.

• Consulting segments, especially cloud, AI, cybersecurity, are among the fastest-growing in Saudi’s portfolio.

• Within the GCC consulting landscape, Saudi currently commands the largest share. Mordor Intelligence

• GCC-level forecasts suggest a 12% growth in 2025 for the consulting market overall to over USD 8 billion. Consultancy ME

• However, cautionary signals are emerging: governments have begun scrutinizing consulting costs and demanding stronger accountability from external advisors. For example, Saudi’s Public Investment Fund recently banned PwC from new advisory work. Financial Times

• Another headwind: macro volatility related to oil prices affects government budgets and prioritization of digital spending.

  
  

IT / ERP / Digital Consulting: The “Sweet Spot”

Demand is particularly acute around ERP implementation, digital transformation, and ongoing managed support. Below is how those sub-segments fit into the overall opportunity.

ERP & Enterprise Software Adoption

• Many regional organisations are in various stages of modernising legacy ERP/supply chain systems, moving to cloud-native ERP, or integrating their systems with analytics, AI modules, IoT telemetry, etc.

• The complexity lies not only in software implementation but in change management, process redesign, systems integration, data migration, and governance, areas where external consultants play critical roles.

• As firms adopt multi-cloud, hybrid deployments, composable architectures, and microservices, the boundary between ERP consulting and pure IT/digital consulting blurs.

Managed Services & Support

• After go-live, many clients require ongoing support, enhancement, tuning, training, upgrades, and third-party integrations.

• This creates stickiness and annuity revenue potential for consultancies that build strong local presence, domain competence, and support delivery capabilities.

Advisory + Technology Convergence

• Modern consulting engagements increasingly bundle strategy, architecture, data, AI, and transformation delivery (rather than pure strategy or pure IT silos).

• Advisory firms that can architect full-stack solutions (cloud + data + AI + operations) are better positioned to capture higher-margin work and longer-term engagements.

Sector Focus Drives Niche Expertise

• Strong demand is emerging in verticals like fintech, health tech, tourism / hospitality, government / smart cities, energy / utilities, and logistics.

• Over time, consultancies that build domain IP (e.g. in healthcare claims, digital payments, smart transport) will enjoy differentiated positioning.

Talent, Capability & Delivery Challenges

Even though the market opportunity is large, consultancies must navigate a few structural challenges:

1. Scarcity of local expertise in AI / advanced engineering

   • Many firms must recruit globally, then localize knowledge, which can strain margins.

   • Talent retention in high-competition ecosystems (UAE, Saudi) is a persistent concern.

2. Cultural & regulatory nuance

   • Each GCC country has its own regulatory regime, procurement rules, data sovereignty laws, Emiratisation/Saudisation quotas, etc.

   • Success often hinges on local partnerships, in-country presence, and navigating public-sector decision dynamics.

3. Margin compression & competitive pressure

   • As more global consultancies, boutique firms, system integrators, and local firms enter, pricing pressure intensifies.

   • Clients increasingly expect measurable outcomes, flexible pricing models (e.g., outcome-based, risk-sharing), and modular solutions rather than big-bang mandates.

4. Delivery model adaptation

   • Hybrid and remote consulting models must be balanced against data localisation, cybersecurity, trust, and client expectations.

   • Efficient “nearshore/offshore + local” delivery models are becoming common, but integration quality, communication, and quality control are key challenges.

5. Sustainability & ESG consulting specialization

   • ESG and green consulting is growing ~40% year-over-year. But supplying credible, methodology-backed services (carbon accounting, climate risk, green IT) requires rare capabilities.

6. Project execution risk & governance

   • Large-scale digital transformation is always risky (scope creep, failure to deliver value). Consultancies must combine technical rigor with strong program governance, change management, and stakeholder alignment.

     
     

Strategic Playbook: How IT Consultancies Can Win

To succeed in the Middle East IT consultancy space, consider the following strategic levers:

Strategy	Description	Why it matters
Local anchoring + global expertise	Establish physical presence (UAE, Saudi) and hire local senior leadership, while pulling in global centers of excellence	Builds client trust and compliance with localization rules
Sector specialization & vertical IP	Focus on 2–3 verticals (e.g. fintech, health, utilities) to build domain credibility and reuse assets	Differentiates from generic consultancies
Modular, outcome-based offerings	Offer modular “plug-and-play” products, outcome-based pricing, and subscription services for SMEs	Lowers client entry barriers and improves recurring revenue
Hybrid delivery architecture	Combine local project leads and on-site presence with remote/nearshore engineering and delivery	Controls costs while maintaining client proximity
Ecosystem partnerships	Forge alliances with ERP vendors (SAP, Oracle, Microsoft, etc.), cloud hyperscalers, local VARs / ISVs	Leverage partner go-to-market, co-delivery, joint sales
Capability investment in AI, data, ESG	Build internal IP in data platforms, model governance, carbon accounting, sustainable tech stacks	Anchors high-margin offers in emerging themes
Governance, metrics & assurance frameworks	Build rigorous quality, risk management, assurance, ROI measurement frameworks	Key to building credibility, especially in government / large enterprise projects
Talent strategy & upskilling	Develop talent pipelines, training academies, and cross-border mobility programs

Conclusion & Call to Action

The Middle East is witnessing a structural shift: digital transformation is not a discretionary project anymore but a strategic imperative. Governments, enterprises, and SMEs alike are hungry for talent, advisory expertise, and execution partners to guide them through the complexity of ERP, AI, cloud, and sustainable business models.

For IT consultancies, this moment offers a rare window to establish or expand presence in a high-growth, underserved region. But success demands more than ambition: it requires local roots, domain focus, delivery excellence, and disciplined governance. Who can deliver all this and more? That's right... SmartChoice, contact us to find out how!