DUBAI, March 5 (Xinhua) -- Middle East and North Africa IT spending is projected to reach 155 billion U.S. dollars in 2018, a 3.4 percent increase from last year, U.S. consultancy Gartner Inc. forecast on Monday.

At the annual three-day Gartner Symposium ITXPO, Gartner said spending for software in the region will continue to outperform the IT sector growth.

The amount of money spent for software is expected to grow 12.7 percent in 2018, while the growth rate reached 10.9 percent in 2017.

"The growth has been driven by companies pursuing new functionalities in major back-office systems like supply chain management, enterprise resource planning and customer service," said Gartner.

However, not all categories of IT spending in the region will surpass the regional total average in 2018, said the study.

"Cloud spending in the region is among the lowest in the world when measured as a percentage of total IT spending," stated Gartner.

"There are insufficient local hyper-scale and large-scale data centers to support cloud systems, which cause local organizations to derive cloud offering from abroad," said Peter Sondergaard, executive vice president and global head of research at Gartner.

"Moreover, latency, legal and local currency makes this option problematic and limits cloud adoption among businesses," he added.

The communications services segment, which is the largest spending segment in the region, is growing to serve increasing demand for premium mobile phones, which also fuels growth in the devices spending segment in 2018, said Gartner.

"The region witnesses continued focus on technology initiatives and improvements," said Sondergaard. "Digital business transformation is creating new industry revenue streams."

Leading tech firms such as Huawei, Microsoft, Apple, Cisco in recent years have been expanding operations in the region, especially in the Gulf Arab countries, in order to benefit from the IT spending spree.

The young Arabs generation's affinity for mobility and e-shopping is driving IT investments, especially in the cashless payments sphere, according to credit card provider Mastercard.