IT spending in Africa will increase 9.9% year-on-year in 2011 to reach $23 billion, according to an International Data Corporation (IDC) forecast.
Jyoti Lalchandani, VP and regional MD of IDC Middle East, Africa and Turkey, says IT spending growth in Africa is evident by the fact that 53% of the region's CIOs have set a higher IT budget this year, compared to 2010.
“The mood in emerging regions is optimistic. Some 37% of African CIOs say they will be investing in projected growth areas, while 28% will develop contingency plans to scale quickly, and 15% will delay spending this year,” notes Lalchandani.
The focus for 2011 for CIOs in emerging regions has changed from last year, according to IDC researchers at the IDC Africa CIO Summit.
Instead of just focusing on cost-cutting, this year will see African enterprises driving efficiency and leveraging current assets.
Stephen Murdock, VP and GM of Dell public and large enterprise, EMEA, says virtualisation and cloud technologies are well-positioned this year.
“The traditional role of the CIO has been around control and cost management. But efficiency needs to become the new benchmark.”
Murdock adds: “Around 95% of data is unstructured, and the digital universe [free online information service] doubles every 18 months. Enterprises need to respond to this challenge, especially as governance and compliance regulations increase.”
He points out that enterprises in EMEA, despite looking to grow, are still facing the same cost challenges.
“Companies in the EMEA region still spend 80% of their IT budgets on keeping the lights on, and in some of the biggest companies, that number can reach 90%.”
According to IDC, last year saw $11.5 billion of IT spending in SA, and nearly 80% of it was made in hardware and IT services.
In a panel discussion, Steven Frantzen, senior VP of research for IDC EMEA, said IT efficiency and automation are key to addressing challenges in the market.
“The real game changer will be around virtualisation, automation and process management as requirements in the data centre.
“If we can manage the information explosion and understand the impact of social media, Africa will soon start seeing a doubling of the IT spend. In emerging markets, we are starting to see a higher spend of hardware due to the huge amounts of investment being made in infrastructure,” explains Frantzen.
In a research report released by IDC, the analyst firm says the market has witnessed resurgence since posting a 0.6% decline in 2009. It states that while these latest figures represent a slight slowdown on the 12.6% growth recorded last year, the outlook remains positive, with a compound annual growth rate of 11.5% predicted for the next four years.
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