SA to spend R266bn on IT services in 2017

2017-07-13 10:36 - Memory Mataranyika
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Harare – IT spending in South Africa this year is expected to grow by 2.4% to R266bn, according to IT information firm Gartner.

The IT firm reported recently that software is expected to have the highest increase in IT spending compared to IT devices, communications and data centre systems. This comes in the light of growing prioritisation of investment in tech trends by corporates and organisations in South Africa.

IT services and communications services will account for R70m and R112m, representing growth rates of 5.6% and 0.8% respectively.

"South Africa has traditionally underinvested in IT. South African organisations continue to prioritise investments in software, as software spending is the means by which they will catch up with the rest of the world," said John-David Lovelock, senior analyst at Gartner.

Gartner has now projected that overall growth rate for investment in IT platforms by South African companies will top 3.4% in 2018. In 2016, IT spending in the country amounted to R259.8bn, with software almost having the highest growth rate.

However, spending on IT devices such as PCs, tablets, ultramobiles and mobile phones will be low at 4.6% this year. Gartner attributed this to slowing purchases of devices by businesses and consumers in the face of rising prices, and expectations of new products.

However, the category will likely rebound next year, with the introduction of premium smartphones likely to increase device spending by 3.8%.

In the communications services category, which takes up the largest IT spend in South Africa, price competition between regional carriers along with extremely price-sensitive consumers is seen “preventing substantial growth in spending".

This is despite an overall increase in mobile device ownership, added Lovelock.

"Despite a dip against the dollar in the last few weeks, the rand strength against the dollar has been up in 2016 and this will help curb the recent price increases seen on servers, storage and devices," said Lovelock.

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