SA tech spending to top $13bn - TechCentral

SA tech spending to top $13bn

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Overall spending on IT solutions in South Africa will cross the US$13bn mark (R143bn at the current exchange rate of R11/$) in 2015, according to new research published on Wednesday by International Data Corp (IDC).

The consumer, finance and government “verticals” will lead the spending charge, with the consumer segment expected to account for $3,1bn in IT spending next year. However, growth in this vertical will stagnate over the coming years, with spending dipping slightly to $3,1bn in 2018, according to the IDC numbers.

The finance vertical, which includes banking, insurance, and securities and investments, will be the second biggest vertical in terms of IT spending in 2015, with total expenditure of $1,9bn.

The primary driver for growth in this sector will be increased investments in mobility and security, according to the IDC.

“As the growth opportunities from traditional channels and business are declining, banks in South Africa are shifting their focus to the unbanked, and mobile is the most sought-after channel for serving the unbanked due to its already high and increasing levels of penetration in the country.”

Spending in the government sector is forecast to reach $1,6bn in 2015, driven by ongoing automation initiatives as part of the drive to bring government services to online and mobile platforms.

IT investment in telecommunications is expected to be $1,4bn in 2015. “Similar to banks, telecoms players are faced with high competition and low growth in their traditional sphere of business, resulting in them foraying into neighbouring fields such as IT services and financial services,” the IDC says.

“Telcos are adding cloud computing, data centre and disaster recovery services to their product and services portfolios, and also targeting the unbanked through payment-related services,” it adds.

“The economic situation in South Africa remains fragile, owing to electricity shortages and strikes in the mining, manufacturing and utilities sectors,” says Jebin George, a senior research analyst at IDC Middle East, Africa and Turkey in a statement. “However, IDC expects the IT market in the country to remain buoyant and continue to grow during the next four years. The consumer, finance, communications, and government sectors will remain the biggest IT spenders, while the fastest growing verticals over this period will be transportation, utilities and healthcare.”  — (c) 2014 NewsCentral Media

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