South Africa's annual IT spend of $8.7 billion in 2007 is expected to increase by 9% this year to close to $10 billion, according to figures released by IDC South Africa earlier this year.
According to the analyst house, 19% of the $8.7 billion was spent on packaged software, 4% on networking equipment, 22% on systems, 3% on storage, 11% on peripherals and 41% on services.
IDC SA says growth in the South African market is being fuelled by software and services, with hardware growth between 2006 and 2007 at 6.3%, software at 9.5% and services at 8.4%. Speaking at IDC's official launch earlier this year, country manager Nikki Quinn expanded on this: "Hardware is expected to grow 5%, to two million units, with laptop sales expected to show double-digit growth, but desktop growth not expected to be more than 3%. Software is expected to grow 11%, to $2 billion, but, says Quinn, "there is a lot of talk about government accelerating its use of open source software, which will influence growth. Services are expected to grow 9%, to $4 billion this year, but the skills shortage may impact that."
Analyst house Frost & Sullivan, in an announcement last year, said the South African IT infrastructure outsourcing market earned revenue of between $2.78 billion and $3.5 billion in 2006; it estimates this will reach $5.6 billion in 2012. In a March announcement, the researcher said it had found the South African broadband market earned revenue of at least $195 million in 2006, stating at the time that: "[The market is] growing at a pace that is likely to remain consistently high until 2013 due to increased use of the Internet. Fixed-line broadband services are growing steadily, while mobile and wireless services are experiencing high levels of uptake."
A statement released by local research firm BMI-TechKnowledge in the same month noted that: "By 2011, the dial-up market in Africa will decline to 1.9 million subscribers as the number of DSL connections rises to the region of 5.4 million, while total wireless (both cellular and fixed wireless) connections increases to 5.2 million. The total five-year cumulative capex for broadband infrastructure is expected to reach $1.2 billion by 2011. The future is really exciting for African broadband."
According to Frost & Sullivan, the African business telephony market earned revenue of EUR158.3 million in 2005, and it expects this to grow at a compound annual growth rate of 12.3% to reach EUR345.3 million in 2012.
As an emerging market region, the entire African and Middle East area is set to continue growing steadily for the foreseeable future.
Gartner, in its Market Trends: Unveiling IT Trends in Emerging Regions, stated: "The estimated 2011 IT spending figure for Africa and the Middle East is $259 billion, up from $182 billion in 2007. Africa and the Middle East are strongly advancing in all IT areas. These two regions are narrowing the gap in IT spending with Latin America. The larger size of the entire region, with its relatively lower IT penetration and its engagement in major telecommunication deployments, is making a strong IT trend. This is also confirmed by the forecast growth from 2006 through 2011 of 77%, which is the strongest of all the emerging regions."
* Sources: IDC presentation by Nikki Quinn; Gartner Market Trends: Unveiling IT Trends in Emerging Regions, Luis Anavitarte, WL Hahn, Tiffani Bova, Federico De Silva Leon, Lillian M Alvarado, Samina Malik, Naveen Mishra, April Adams, Donna Taylor, Fabrizio Biscotti, Yanna Dharmasthira, Ian Marriott, 18 December 2007; BMI-T press release 'African broadband adoption gains momentum', 27 March 2008; and various Frost & Sullivan announcements from 2007 and 2008.
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