ICT companies have to change the way they offer services, because the advent of cloud computing and mobility is leading to a fundamental shift in the way technology is consumed.
Growth in the sector is slowing and gains are only set to come in at 4.9%, 2.5 percentage points lower than 2011's figures, when the sector grew at more than two times gross domestic product, hitting $12.7 billion - or almost R100 billion, according to the IDC.
Dimension Data's CTO for Middle East and Africa, Mayan Mathen, said the industry is going through a major transformation with the advent of cloud and mobility, and the way companies are using IT is changing.
At a recent lecture at the University of Pretoria, Gijima CEO Jonas Bogoshi said the company and its competitors are experiencing challenging times, and need to change to remain relevant.
Bogoshi said cloud computing is “real and not a fad” and customers can now self-provision and pay as they use services, which cuts down on costs. “This affects us and our competitors significantly. People no longer need infrastructure to offer IT services, two people can compete with large companies like Gijima.”
Mathen said the group has been watching this trend and has adjusted the way it takes product to market. He said companies are facing financial pressure and are examining how they consume and purchase IT.
Price point
Bogoshi noted that IT is becoming a commodity, and people are dictating to the IT department and influencing what companies buy.
“The powerbases of IT companies has been eroded. There used to be a high human, low technology ratio in IT; now it has flipped to a high technology, low human ratio, because of how the IT game has changed,” said Bogoshi.
Fewer engineers are required now, he noted. “For example, where you use to have one engineer for every 50 servers, you now have the likes of Google, which has one engineer for every 250 servers.”
This has led to the market having to trim costs, he said.
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