South Africa’s IT spend will increase from R52,2-billion to more than R67,2-billion over a forecast period between 2006 and 2011, according to a report by African information and communications technology market analysts BMI-TechKnowledge (BMI-T).
The analysts revealed that the spending is set to increase at a compound annual growth rate of 5,2%.
According to IT research analyst Lesley-Anne dos Santos, small and medium enterprises (SMEs) account for the majority of South African enterprises and they are increasingly forcing IT vendors and service providers to acknowledge their IT needs.
As a result, these IT needs are gradually increasing the value of the market.
“A vertical market strategy is becoming an increasingly important element for both IT vendors and IT service providers, as end users demand technology tailored for their industry-specific requirements,” said Dos Santos.
She added that analysis from a vertical perspective is necessary to enable vendors and service providers to penetrate their desired markets best.
However, the bulk of South African IT spend is still coming from the larger enterprises, which comprise the finance, manufacturing, government and distribution sectors, according to the report.
BMI-T expects that the financial services sector will continue to provide the largest opportunity in the South African IT market, accounting for 22,1% of the overall IT spending in 2006.
The latest assessment of the market is that organisations are scrutinising all investments closer than ever, getting a better return for their money.
This factor could inhibit IT spend in South Africa. However, BMI-T analysts are confident that growth is still relatively strong, and that supply-side drivers will not compromise growth in the future. — I-Net Bridge