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South Africa Information Technology Report Q3 2016

  • June 2016
  • -
  • Business Monitor International
  • -
  • 72 pages

Includes 3 FREE quarterly updates

BMI View: We continue to hold a positive outlook for the South African IT market in 2016 and beyond,over our forecast period to 2020. Nevertheless, the primary concern is the heavy depreciation of the SouthAfrican rand against the US dollar. Despite the rally throughout the first months of 2015, the fundamentaleconomic issues weighing on the rand - infrastructure bottlenecks and strike action - remain intact, and wetherefore expect diminished demand for hardware to continue in 2016, before stabilising in 2017. Thestrongest driver of growth in the IT market will be government spending via service expansion andmodernisation efforts. There is also growing interest in IT solutions by SMEs looking to explore new salesand marketing channels, as well as to improve operations efficiencies, offering new opportunities. Thesefactors will see the software and services segments outperform over the 2016-2020 forecast period.

Latest Updates And Industry Developments

- Computer Hardware Sales: ZAR28.8bn in 2016 to ZAR35.7bn in 2020, a CAGR of 5.6% in localcurrency terms. Rand depreciation represents downside risk by squeezing household purchasing power,resulting in deferred purchases and substitution for cheaper models in South Africa's import dependentmarket.

- Software Sales: ZAR18.0bn in 2016 to ZAR26.0bn in 2020, a CAGR of 9.2% in local currency terms.We believe the uptake of cloud-based software, which is less susceptible to piracy and through moreflexible pricing will deepen the market to SMEs, will drive growth in software sales over the mediumterm.

- IT Services Sales: ZAR31.2bn in 2016 to ZAR44.4bn in 2020, a CAGR of 9.4% in local currency terms.IT services will be the outperforming IT market segment, with development of the business processoutsourcing market and public sector modernisation spending key drivers.

Table Of Contents

South Africa Information Technology Report Q3 2016
BMI Industry View 7
SWOT 9
IT SWOT 9
Industry Forecast 11
Recent Developments 11
Structural Trends 11
Table: Enterprise Trends - GVA By Vertical (South Africa 2015-2020) 15
Table: IT Industry - Historical Data And Forecasts (South Africa 2013-2020) 16
Industry Risk Reward Index 17
Table: Middle East and Africa IT Risk/Reward Index, Q3 2016 20
Market Overview 21
Hardware 21
Software 27
Cloud Computing 33
Table: Cloud Vendor Developments 37
IT Services 38
Industry Trends And Developments 44
Table: Africa IT Hardware Trade, 2009-2014 44
Table: South Africa IT Hardware Trade, 2010-2015 45
Regulatory Development 48
Table: SITA 48
Table: National Broadband Policy Targets 50
Competitive Landscape 52
Retailers 52
Table: Major Electronics Retailers 52
Table: E-commerce And Online Retailers 52
IT Vendors 53
International Companies 53
Table: Hewlett-Packard 53
Local Companies 54
Table: Datatec 54
Table: Dimension Data 55
Table: EOH 56
Table: T-Systems South Africa 57
Regional Overview 59
Demographic Forecast 63
Demographic Outlook 63
Table: Population Headline Indicators (South Africa 1990-2025) 64
Table: Key Population Ratios (South Africa 1990-2025) 64
Table: Urban/Rural Population and Life Expectancy (South Africa 1990-2025) 65
Table: Population By Age Group (South Africa 1990-2025) 65
Table: Population By Age Group % (South Africa 1990-2025) 66
Methodology 68
Industry Forecast Methodology 68
Sources 70
Risk/Reward Index Methodology 70
Table: IT Risk/Reward Index Indicators 71
Table: Weighting Of Components 72

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