Technology research house Gartner has predicted that about 50% of IT suppliers worldwide will disappear by the end of 2005, citing a time of accelerated global job losses and vendor consolidation. But local analysts say SA may suffer less pain.
In a media release, Gartner said "as many as 50% of tech suppliers will be eliminated".
"There are currently more than 2 300 publicly traded software companies in the world, that`s about 50% to 60% too many," says Bob Hayward, senior VP at Gartner Asia Pacific. "For those companies that survive, this means they can focus over the next several years on providing quality and not be price-driven."
More lekker local
A South African IT analyst who asked not to be named says SA IT companies may not feel the change as painfully.
"Among the listed companies, of which there aren`t that many locally, a good proportion are services companies," he says. Services companies, he explains, do not suffer the pressures of consolidation in software to quite the same degree, and do not carry the research and development burden of products companies in general, which makes it hard for local companies to compete globally.
"Furthermore, we are going into a period of low interest rates, which will make it more attractive for companies to spend on capital equipment," he adds.
Growth versus job losses
Gartner`s Hayward says companies will invest in technology next year to strengthen their business and make them more innovative; IT assets, acquired before the year 2000, will reach the end of their lifecycle and fresh equipment will have to be purchased.
"But on the negative side, hundreds of thousands of workers in developed economies will be displaced, many of them currently holding high-paying, white-collar positions," he says.
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