IT market worth R49bn

Johannesburg, 04 Aug 2006

Market research released yesterday by BMI-TechKnowledge shows SA`s IT market will grow by 6.7%, to reach R49 billion this year.

Senior analyst Natalie Bryden reveals the South African IT market grew by 4.4%, from R44 billion in 2004, to reach almost R46 billion in 2005.

"The IT market is expected to grow at a compound average growth rate of 5.8%, to reach R60.8 billion in 2010," she predicts.

"Driving the expected increase in IT spend is expansion in the consumer sector, government`s need to deliver better services to citizens, the physical infrastructure expansions required to enable SA to reach its Accelerated and Shared Growth Initiative for SA goals and preparations for the 2010 World Cup," says Bryden.

Vertical sectors, such as transportation, retail, government departments, education and healthcare are expected to increase IT spending over the next few years, she adds. "However, the consumer sector - which performed well in 2005 - will be affected by interest rate increases in 2006."

Services, software, hardware

The IT services market reached R18.2 billion in 2005, notes Bryden, showing a year-on-year growth of 4.8%. Services account for about 40% of the total IT expenditure.

The packaged software market grew by 3.7%, to hit R9 billion in 2005, and BMI-T expects it to show growth of 5.5% in 2006. In the packaged software sector, the fastest growth was in the systems infrastructure software, she adds.

The hardware market was worth R18.5 billion in 2005, growing by 4.4% from the previous year. It is expected that this market - which is the largest of the three, accounting for 40.5% of the total IT market - will see growth of 5.8% over the next few years.

Special report findings

BMI-T has released its corporate IT spend report, "The evolution of the big business IT landscape". The core findings are:

* Compliance spend is expected to increase.
* Service-oriented architecture adoption is still in the early stages.
* The BEE status of suppliers is very important.
* Excluding security and storage solutions, the most popular business solutions are software asset management and supply chain management.
* The categories with the highest expected growth are storage, networking hardware and software, and security services and products.