Lexmark SA is looking towards corporate and government spend to drive it forward in SA, as it focuses increasingly on high-end laser-jet printer users.
Lexmark SA MD Branislav Zivkovic says between 60% and 70% of all IT purchases in SA are made by government, which makes this a significant market to target. However, the company sees big corporations being the primary driver for its growth in the year to come.
While unwilling to be drawn on any specific targets, Zivkovic says the international expectation is that Lexmark SA needs to grow by about 20% to 25% to maintain its market share and stay ahead of competitors.
Zivkovic says growth in the past year predominately came from the minerals and energy sector, as well as banking. However, this is set to shift slightly.
"Typically, we would talk to a company's CFO or CEO as they look at the entire business, not just one segment," says Zivkovic, explaining the company's strategy in attracting corporate spend.
According to him, South African business dealings are characterised by a strong focus on relationship selling where the rapport between individuals often makes or breaks a deal.
However, he says the South African government is unique in its spending patterns.
Flush it
Government is still stuck in a spending pattern of flushing its budget at the end of the financial year and is not yet willing to move into leasing equipment, rather than owning it, says Zivkovic.
According to him, "spending season" is over as most government departments have ended their financial year.
Government spend currently accounts for between 40% and 60% of Lexmark SA's revenue, although Zivkovic would not commit to an exact figure.
"The readiness in government to lease and, in so doing, pay by usage, is very little." Zivkovic says he does not know of one national department that has been willing to move over to such a model where maintenance of printers, as well as redundancy at the end of their lifespan, would be someone else's problem, be it the bank or the technology provider.
Furthermore, Zivkovic expects government spend to only pick up significantly again after July or August, as this is when most departmental budgets will be revealed.
However, he says the local ICT industry is a dynamic one with many people entering the fold.
This, in his opinion, will ensure the growth of the sector for at least another two decades as individuals work their way through the ranks.
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