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Johannesburg - South Africa's Information Technology spending will increase from R52.2bn to over R67.2bn over a forecast period between 2006-2011, according to a report by African ICT market analysts, BMI-TechKnowledge (BMI-T).
The analysts revealed that the spending would increase at a compound annual growth rate (CAGR) 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 services providers to acknowledge their IT needs.
She said that as a result, these IT needs were 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 best penetrate their desired markets.
However, the bulk of South African IT spend is still coming from the larger enterprises, which comprises 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.