South Africa’s cloud computing services market is expected to more than double – from an estimated R49.6 billion in 2025 to a projected R101.5 billion in 2029 – representing a slight cooling off of the market but still exceptionally strong growth.
That’s according to local market analyst firm BMIT in its Cloud Report 2025, which conducted extensive secondary research and selected face-to-face interviews with leaders of various cloud original equipment manufacturers and system integrators service provider organisations in South Africa.
Christopher Geerdts, managing director of BMIT, says the research is showing a fundamental shift in marketfocus, from the longstanding phase of basic infrastructure migration to one where businesses are carefully balancing the ongoing imperative of modernisation, with the need to cut costs.
He says while organisations have been compelled to modernise to escape the risks associated with hardware obsolescence and unsupported legacy software, these organisations have also experienced “cloud bill shock”.
According to BMIT, the first phase of cloud migration involved a significant shift from capex to opex spend, but expected savings did not always materialise.
Companies are therefore searching for areas to cut costs, resulting in a focus on “FinOps by design” – the management of cloud spend, it notes.
The market research firm adds that one obvious focus of this is for businesses to ensure they pay only for the resources they effectively consume.
However, it says the lack of formal FinOps maturity in many organisations leads to “cloud waste”, where unmanaged consumption can erode the intended financial benefits of digital transformation.
Enterprises using hyperscalers are further exposed to fluctuating operational costs due to the volatile Rand cost versus the US dollar, says the firm.
It adds that the other focus is more fundamental and stems from the early "lift and shift" migration strategies, of replicating on-premise architectures in the cloud without refactoring. This approach often leads to inefficient resource consumption and unexpected costs, BMIT explains.
“The better approach is to consider architectures that take full advantage of the cloud, to deliver results more efficiently,” it states.
“Additionally, the expanding digital attack surface has elevated security to become a boardroom level priority, with ransomware threats necessitating robust ‘defence in depth’ strategies.”
Beyond cost optimisation, BMIT notes that companies are realising the need to invest in technologies that help them maintain their competitiveness.
“The adoption of artificial intelligence (AI), in particular, stands out as a primary growth driver. Local enterprises are migrating data to the cloud to leverage AI tools, as running large language models on-premise is unfeasible due to the significant cost of deploying local GPU infrastructure. The hyperscalers have invested heavily in AI capacity and are promoting their solutions aggressively,” it says.
Furthermore, BMIT points out that South Africa’s energy landscape remains a critical factor. It says cloud adoption has become a central component of business continuity strategies, with many local data centres offering resilience, together with renewable energy partnerships.
It explains that this allows organisations to mitigate the risks and high costs associated with maintaining power redundancy for on-premise server rooms whilst also assisting with their carbon neutral targets.
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