South Africa’s IT market swings to growth in 2021

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 31 Mar 2021

After a subdued 2020, South Africa’s IT market is projected to spring into growth this year, showing the sharpest growth in the Middle East and Africa (MEA) region.

This is according to Nagia El-Emary, country director for Egypt and senior consultant for the MEA region at IDC.

El-Emary was speaking at Lenovo’s MEA virtual event: “The Future of Work Re-Imagined: Working from Anywhere”, where she said most key country IT markets experienced varying degrees of contraction or slowdown in 2020.

However, there’s already been moderate recovery in 2021, she indicated. “Among the larger markets, South Africa forecast the deepest contraction due to a sharp decline in hardware and services spending.

“As it rebounds from this sharp decline, it is expected to show the sharpest growth in 2021,” stated El-Emary, adding it will be 2023 before the region gets back to the 2019 growth rates.

Based on the IDC’s definition, IT spending includes devices, infrastructure, software and IT services. It excludes telecom spending, business services, operational technology spending and some emerging technologies.

The IDC’s forecasts show that last year SA’s IT spending declined by 10.2%. In 2021, IT spending is anticipated to be up by 5.2%, with value spend projected to be $12.78 billion during this period.

“Overall, for the region, most of the countries are expected to see positive growth in 2021,” said El-Emary.

Re-imagined business strategy

Turning to the digital strategies for the post-COVID-19 era, El-Emary said enterprises in the region were quick to pivot and realign.

“Automation, which was in plan for most business, jumped to the head of the line; therefore, addressing efficiencies and cost optimisation.

“The pandemic also made clear that businesses are revisiting their business models, particularly how to accelerate becoming a digital enterprise and how to increase the proportion of revenue from digital products and services.

“A clear strategy priority is the recognition of the need to digitise the remote workforce.”

El-Emary said the future workspace enables work without time, device, or space boundaries. Regardless of working from an office or plant or even remotely, contribution, collaboration and productivity must be supported.

Unfortunately, it took the COVID-19 pandemic to accelerate this change that the world didn’t see coming, she said. “The reality is that the pandemic accelerated a distributed workforce, working remotely across the world. While the image of working from the beach was aspirational, it has now become a real option.”

However, all of this did not happen without challenges, according to El-Emary. “Chief among the concerns was the potential decline in productivity, cyber security and privacy threats.

“2020 did see a significant rise in security threats that businesses continue to dodge and manage. Further concerns were about availing IT support, availing the right hardware and devices to the remote workforce, and maintaining a sense of unity and management of the distributed workforce.”

She explained that in many countries and industries, workers are returning to offices. However, it is expected that 50% of employees will continue to work remotely in some capacity.

This is going to be the norm going forward, she stated. “As a result, remote work has allowed organisations to consider blended or hybrid models that accommodate the need for flexibility in both the workforce strategy and site strategy. We see a paradigm shift to rework the imagination of work.”

At the same event, Dilip Bhatia, vice-president for user and customer experience at Lenovo, noted that much of the hybrid work is being re-balanced.

“Companies will have to start focusing on being very pragmatic and experiment and adapt,” stated Bhatia. “We expect innovation opportunities in this space to address the renewed sense of priorities. Most of all, companies will want to focus on employee engagement and employee experience, which is going to be the guiding motivation as we move forward.”