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Follow on Google News | New Market Report Now Available: South Africa Information Technology Report Q3 2010New Computer Technology research report from Business Monitor International is now available from Fast Market Research
The 2010-2014 South African IT market compound annual growth rate (CAGR) is projected to be in the region of 11%, as a number of IT infrastructure projects generate spending at federal and provincial levels. Much spending in key IT verticals such as telecoms, banking and mining will be driven by factors internal to those sectors. The IT market fundamentals of sub-10% PC penetration, rising incomes and falling prices also underpin our growth forecast. A successful hosting of the 2010 FIFA World Cup could be expected to attract more foreign investment. The IT market will also be driven by a continued improvement in South Africa's ICT infrastructure and bandwidth availability. 2009 saw steep falls in the cost of asymmetric digital subscriber line (ADSL) services, which declined by as much as 80% in some areas, bringing broadband internet within reach of a wider proportion of South Africans. Industry Developments The Department of Home Affairs (DHA) hasannounced that it will spend more than SAR500mn on IT projects in the 2009/10 financial year. The objectives include improving service delivery and immigration services and fighting corruption. IT projects will receive ZAR514mn in 2009/10, with this allocation growing to ZAR652mn in 2010/11. One core strand of the South African authority's e-government strategy is the Gateway project. The concept behind the 10-year project, due to be completed by 2014, is a single gateway facilitating access to all information about, and services provided by, the South African government. The Gateway will be delivered in five implementation phases over several years, with the phases overlapping. The IFMS (Integrated Financial Management Systems) project is a project to manage the evolution of government IT systems to support interoperability and e-government service development. The project, supervised by the State Information Technology Agency (SITA), involves the integration and migration of government finance, HR, asset management, logistics and other business solutions into a single distributed system. Competitive Landscape Leading South African IT Services company Dimension Data reported an 11.1% rise in revenues in the first half of its 2010 financial year. Revenues for the six months to March reached US$2.2bn. The company forecast further recovery in client spending in the second half of the year. However, Datacentrix, another leading South African ICT company, saw gross revenues contract to SAR1.3bn from SAR1.5bn, due mainly to poor results in parts of the infrastructure division. In February 2010, Microsoft launched the discounted promotional software Microsoft Office 2007 Home and Student for Africa. The software retails at SAR3,999 and can be installed on three computers. Microsoft hoped that the release of the lower-cost software will help to combat software piracy in Africa. Government figures have estimated that the company accounts for around one-third of national spending on software licences. The banking and financial services sector remains a key target for IT vendors, despite the global financial crisis. In March 2010, Tibco Software won a contract from financial services institution Discovery Holdings to supply its messaging, business process management (BPM) and service oriented architecture. Discovery,which has more than 2mn clients across South Africa, hopes to drive process improvements across its business units. Computer Sales South Africa's computer hardware market is forecast to grow to at a CAGR of 11% over the next few years from an estimated US$4.1bn in 2010 to US$6.3bn in 2014. In 2009, sales were hit by sluggish retail demand, with the wholesale and retail trade sector contracting. The main growth drivers during BMI's five-year forecast period include rising computer penetration, falling prices and vendor and retailer promotions, and the popularity of notebook computers and ultra-light products. Software The software market is forecast at around US$1.8mn in 2010 and, despite current economic headwinds, is projected to have a CAGR of around 11% over the 2010-2014 period. South Africa's software market is developing, despite the problem of software piracy, which still accounts for around 36% of software. The growing regional ambitions of South African companies will be a factor driving corporate spending on software, but vendors will have to meet increasing demand for vertical-specific applications. IT Services The IT services market is projected at around US$3.5bn in 2010 and is expected to grow to around US$5.3bn in 2014. In early 2010, IT services vendors reported increased client spending in key segments. Major infrastructure and transport projects provide a framework for faster spending growth during the forecast period. E-Readiness Internet penetration in South Africa is by far the highest on the continent, although broadband penetration remains low. In the small business sector, some progress is being made: according to a 2008 survey, 63% of smaller companies that use computers to connect to the internet now have a DSL internet connection, exactly the proportion using dial-up five years ago. For more information or to purchase this report, go to: - http://www.fastmr.com/ About Business Monitor International Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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