The information technology services market in SA is expected to exceed $5 billion – or around R40 billion – in 2012, according to International Data Corporation the global market intelligence and advisory services provider.
The IDC said on Wednesday that the IT services market in SA had seen healthy uptake, growing some 8% year on year in 2010 to contribute more than a third of the total IT spending in the country.
“After the freeze in IT budgets that came about as a result of the global economic crisis, 2010 saw a rebound in IT services spending,” said Suzanne Nolan, research analyst for IT Services, IDC South Africa.
“The growth in IT services spending was driven by a recovering economy, increased business confidence, expanding bandwidth availability, and various infrastructure investments made in the country in 2010.”
In a recent research report, IDC cited that IT outsourcing constituted around 40% of the South African IT services market, which represented the largest market share of all IT services foundation markets, followed by systems integration and installation and support services.
“This growth was mainly driven by discrete managed services rather than by traditional information system outsourcing contracts,” said Nolan. “The healthy growth in outsourcing services signifies a level of sophistication and maturity within the IT services segment.”
According to IDC, services such as network and desktop outsourcing and infrastructure hosting saw increased uptake in 2010, fuelled by the incremental supply of datacenter space and increased customer awareness of the managed services model.
IDC forecasts the total SA IT services market to expand at a compound annual growth rate of 8.7% to exceed $17 billion – or about R136 billion – in 2015.
Looking ahead, IDC expects a continued spending focus among end-user organizations on areas and solutions that help reduce operating expenses while increasing efficiency. As a result of continued price pressures and the need to improve client service, vendors are advised to pursue alternative service delivery models, such as cloud services. Not only will this help end users optimise their IT investments, but it will enable services providers to improve their quality of delivery and create new revenue streams.
Source:http://www.businesslive.co.za/southafrica/sa_markets/2012/01/11/sa-it-services-spend-seen-at-5bn-in-2012