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SA IT spend rising

By Warwick Ashford, ITWeb London correspondent
Johannesburg, 22 Nov 2004

As IT budgets increase, South African companies are planning to spend more in the short-term on voice over IP (VOIP) and radio frequency identification (RFID) technology than their European and North American peers, according to Forrester Research.

In July and August this year, Forrester completed its first specific survey of 103 South African businesses and government organisations. The survey shows South African IT spending is on the rise and that local firms lead their overseas counterparts in new development spending.

Marc Jeton, Forrester international channels manager, says the research shows 39% of South African organisations are planning new investments in VOIP before the end of the year, compared with 28% of American and 22% of European companies.

John McCarthy, Forrester Research VP, says telecommunications deregulation in SA is set to have an impact in the market as companies gear up to maximise the business benefits.

South African organisations also take the lead in spending on RFID with 14% planning investments in this emerging technology, compared with 10% in America and only 6% in Europe.

At a recent international conference on RFID at the Sandton Convention Centre, SA was acknowledged as one of the world leaders in developing RFID technology.

Other areas of spending where SA tops its overseas counterparts include enterprise application integration, business intelligence software, enterprise portal software and content management software.

At the top of the South African IT shopping lists are PCs, with 91% of companies saying they would be making PC purchases by the year-end, followed by server hardware (72%) and network equipment (67%).

Although as a percentage of company revenue, South African IT spending is 51% lower than in Europe and 32% lower than in North America, the survey shows local IT spending is on the rise. South Africans expect IT budgets to increase by 7.3% against 2.2% for North America and 1.6% for Europe.

"Close to 50% of large South African organisations say their IT budget in 2005 will be higher than this year," says McCarthy. "This optimism is 24% higher than North America and 51% higher than Europe."

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