Overcrowded IT market may be a blessing for local businesses

Johannesburg, 02 Sep 2021
Read time 1min 30sec

South African businesses are spoilt for choice when it comes to international and local IT solutions and service providers. This can sometimes be overwhelming for IT leaders, but is there a silver lining?

Crowded markets always yield a positive outcome for the consumer. It drives prices down and shifts bargaining power into the domain of the buyer.

Amazon Web Services launched its Cape Town data centres in 2020, a year after its most direct rival, Microsoft, launched two Azure data centres in South Africa (in Johannesburg and the Cape Town). Along with this, there is a general surge in cloud-based technology solutions available to local buyers.

It is safe to assume that South Africa is headed into what may be deemed a “buyer's market” in the technology arena. While this may lead to IT leaders being inundated with messages and offers in the short-term, this creates a long-term structural benefit to local spenders. Market competitiveness is driving pricing down while service levels strengthen.

According to Gartner, less than 43% of leaders achieve the level of savings they set out to in the first year of cost reduction. Especially in the context of a pandemic environment, businesses need to exploit every means to cut costs. If IT leaders are not exploring how cloud providers can save costs, they are leaving money on the table.

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