A prolonged war in the Middle East will mean more for Western firms than an ungodly spike in gas prices, the latest research from IDC warns, with the conflict threatening to dull global IT spending, even as investment in AI and cyber soar.

The market intelligence firm’s impact report projects that the US-Israel-Iran conflict, which is now spilling out across the Gulf States, will hit not just energy prices, but cloud and data centre services, sovereign infrastructure development, cybersecurity spending, and supply chain security – particularly regarding semiconductors and processors passing through the Strait of Hormuz.

The scale of the damage will hinge on how long the conflict drags on, but IDC are clear that the longer the war continues, the deeper the fallout is likely to be.

Should the war last up to three months, the limit of IDC’s current forecasts, the firm said the impact on IT spending would be “measurable but moderate”, slipping to 9% from 10% in pre-war estimates.

However, even that 1% dip could make the difference between tens of billions made or lost, with estimates from Gartner suggesting that worldwide IT spending could reach $6.15 trillion this year. A longer conflict threatens a more severe impact, though IDC notes that this is more difficult to predict given the volatility of the situation.

The war will obviously have far greater consequences for firms in the region, with the study suggesting that a three-month conflict could see IT spending in the Middle East and Africa fall to 3-4% of the global market, down from 5% last year, though country-level impact depends on a variety of factors.

Again, while a relatively small decline, huge sums are at stake, with the MEA region accounting for $155 billion in IT spending last year, a figure IDC reckons cannot be matched if organisations and governments prioritise only mandatory spending to support continuity and security over the course of the war.

The report stresses that the IT and tech landscape have radically changed since the last days of the Iraq War in the early aughts, with major service providers now finding themselves on the front line thanks to a surge in global infrastructure investment, particularly in regard to data centres.

Already, AWS has suffered attacks against multiple sites in the UAE and Bahrain, with drones causing structural damage, disrupting power supplies, and resulting in water damage from fire suppression measures – forcing some services offline and crippling others until engineers could safely get in. 

IDC said that these strikes, occurring in the opening days of the war, show how vulnerable cloud environments within conflict zones are, and though investment in cloud, storage, and data centres will likely continue apace, the industry will suffer from higher construction and financing costs in the long term. 

It will also mean a move to multi‑AZ architecture, an approach where an application or database is deployed across two or more physically separate “Availability Zones” within the same region, with hyperscalers likely to quickly adapt after seeing AWS hit. 

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While that might mitigate some of the physical risk, IDC said it expects cybersecurity spending to ramp up, too, led by regional governments expanding existing programmes, though multi-national enterprises with exposure will also raise defensive spending in the short term.

This will likely lead to some growth in the wider cybersecurity and secure communications markets, even if broader macro conditions soften total growth rates. 

“While the Middle East faces immediate exposure, the global IT industry will feel second-order effects through energy costs, semiconductor supply, and capital allocation decisions,” said IDC.

“In the near term, caution and scenario planning will dominate enterprise decision-making. In the medium term, this conflict may accelerate structural investments in sovereign infrastructure, cybersecurity, and multi-region cloud resiliency.”