South Africa Information Technology Report Q2 2015

BMI Research
April 1, 2015
98 Pages - SKU: BMI5478852
Countries covered: South Africa

South Africa Information Technology Report Q2 2015

BMI View: We undertook a significant revision of market data for South Africa's IT market for Q2 2015,revising our estimate for market size downwards, as well as extending the forecast to 2019. However, ourbullish outlook for IT market spending growth over the medium term remains unchanged, althoughprospects for rand depreciation against the US dollar weigh on the outlook. The IT market continues toprimarily be driven by government spending as well as large enterprises, both of which are expected toslow their spending in the light of a slower economy. However, there is growing interest in IT solutionsamong SMEs looking to explore new sales and marketing channels as well as improve their operationalefficiencies, offering new opportunities and maintaining South Africa's still good growth rate. SMEscontinue to increase their spending on IT systems through upgraded PCs and servers, while also starting toadopt enterprise applications and cloud-based solutions. The trend is partly driven by the rapid expansionof high-speed broadband networks and creates significant growth opportunities for IT products andservices vendors considering the potential of South Africa's SME sector.

Headline Expenditure Projections

Computer hardware sales: ZAR26.8bn in 2014 to ZAR29.4bn in 2015, up 9.6% in local currencyterms. Strong growth of notebook and tablet volumes in 2015 will drive value increases, but randdepreciation represents downside through the erosion of household purchasing power in global markets.

Software sales: ZAR16.4bn in 2014 to ZAR18.4bn in 2015, up 12% in local currency terms. We believethe uptake of cloud-based software, which is less susceptible to piracy, will drive growth in softwaresales.



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