South Africa’s IT spend grows by over 4 percent

by MTHULISI SIBANDA
JOHANNESBURG – INFORMATION technology (IT) spending in South Africa, the continent’s most advanced economy, is projected to total R276,6 billion (US$19,4 billion) in 2018, representing an increase of 4,3 percent from the previous year.

According to Gartner, the world’s leading research and advisory company, all IT segments are on track to achieve growth this year, with data centre systems and servers returning to growth.

“South Africa is playing technology catch-up,” said John-David Lovelock, vice president and distinguished analyst at Gartner.

He said after years of neglecting basic data centre requirements, the country’s IT leaders were now drawing attention to their data centre system spending.

“Although data centre systems remain the smallest spending IT segment in South Africa, this segment’s year-over-year increase is set to be the most profound in 2018.”

In South Africa, the price of communication services, including voice and data services for fixed and mobile delivery, continues to drop, which enables spending to be allocated elsewhere.

Spending on communications services in South Africa, which is projected to represent 43 percent of the country’s IT spending, is forecast to be flat throughout the forecast period.

However, the Southern African country remains behind many of the more technologically mature countries when it comes to IT spending, both as a percentage of revenue and in the purchase of advanced systems, such as those involving artificial intelligence, cloud, digitalisation and collaboration technology.

The increase in data server system spending this year stems from requirements to overcome a large corporate technology deficit and to modernise data centres.

Lovelock pointed out digital transformation was happening in South Africa, but the pace and penetration were low.

Newly modernised data centres that can support application software purchases, as well as internally developed systems, will drive advances in digitalization, he added.

“However, low cloud adoption and underutilisation of strategic consulting and implementation services will mean a slow pace digital transformation in South Africa overall.”
– CAJ News