New Market Report Now Available: South Africa Information Technology Report Q2 2011

New Computer Technology market report from Business Monitor International: "South Africa Information Technology Report Q2 2011"
 
May 4, 2011 - PRLog -- Market Overview

BMI expects South African IT spending to increase from US$10.7bn in 2011 to about US$17.4bn in 2015, faster than real GDP growth. Despite a forecast drop-off in IT investment associated with the 2010 FIFA World Cup, other major infrastructure and transport projects will continue to provide a framework for growth during BMI's five-year forecast period.

In 2011, a brighter outlook is forecast for the household PC segment, in a context of low interest rates, ongoing wage increases and rising asset prices. South African businesses are expected to maintain a cautious attitude to IT investments, due to continued global economic uncertainty.

The 2011-2015 South Africa IT market compound annual growth rate (CAGR) is projected to be in the region of 13%, as a number of major IT infrastructure projects generate spending at provincial levels. A projected improvement in South Africa's broadband infrastructure and international bandwidth will also be an important market growth driver.

Industry Developments

The South African Department of Education has announced a target of rolling out laptops to all school children in the country by 2014. The government is looking at various ways to achieve this, inclding the use of portable mobile computer labs for schools where there is no infrastructure. This followed the launch, also in 2010, of Teacher Laptop Initiative, which should encourage PC procurements by schools across the country.

In November 2010 the South African government announced incentives to attract BPO firms to challenge India's long-term dominance of the sector. The government has offered tax rebate of 12,000 rand for every job created in the sector. The government is keen to win a larger share of the global outsourcing spending for the country.

Meanwhile, the IFMS (Integrated Financial Management Systems) project manages 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

In 2010, PC vendors Dell, HP, LG, Pinnacle, Sahara, Vodacom, MTN, Lenovo, Fujitsu-Siemens, Cel C, Mecer, and Telkom were among those selected by the South African government as accredited suppliers for its Teacher Laptop Initiative. Under the initiative teaches will have a choice of packages ranging from SAR250 to SAR390, and they will receive a subsidy of SAR130, but have to pay the remaining sum.

Meanwhile 2011 is expected to see the emergence of tablet notebooks, spearheaded by Apple's iPad. The device, from US consumer electronics giant Apple, did not officially reach South Africa until February 2011. Interest was reported to be high, although many South Africans had already purchased iPads overseas, or else were minded to wait for an upgraded version.

In 2011, IT services firms will target the emerging cloud computing opportunity, which has attracted a number of players into the market. In Q410 new telecoms service provider ARC Telecoms launched in South Africa with plans to provide connectivity, managed services and applications delivery through cloud computing. ARC signed agreements with telecoms carriers such as Telkom and Vodacom, and was targeting the small and medium business market.

Computer Sales

South Africa's computer hardware market is forecast to grow at a CAGR of 12% over BMI's five-year forecast period from an estimated US$4.7bn in 2011 to US$7.5bn in 2015. Computer sales were one of the drivers of rising retail sales in mid-2010, according to local data.

The main growth drivers during BMI's five-year forecast period include rising computer penetration, falling prices and vendor and retailer promotions, as well as the popularity of notebook computers and ultra-light products. In the past few years, falling prices have boosted PC unit shipments, along with aggressive retail promotions.

Software

The addresable software market is forecast at about US$2.0mn in 2011 and, despite current economic challenges, is projected to have a CAGR of about 17% over the 2011-2015 period. South Africa's software market is developing, despite the problem of software piracy, which still accounts for about 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.

The economic slowdown represents a challenge to software vendors, as enterprises are tempted to focus more on the bottom line. This situation is likely to lead to further consideration of open-source solutions in some sectors. Meanwhile, the progress of the software-as-a-service (SaaS) model in South Africa should receive a boost from projected improvements in South Africa's broadband infrastructure.

IT Services

The South African IT services market is projected at about US$4.0bn in 2011 and is expected to grow to about US$6.5bn in 2015. During 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.

Spending on IT services still depends heavily on government programmes and in the current economic environment. South Africa plans to invest more than 40bn rand (US$5.5bn) in a range of projects to boost economic growth and create jobs, and the government will remain the largest spending IT services vertical, followed by financial services and telecoms.

E-Readiness


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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/catalog/publishers.aspx?pubid=1010

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.

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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.
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