Surprising strength in South Africa’s IT services market

BMIT’s latest South African IT Services Market Report shows there is remarkable resilience in the country’s IT services sector, which, according to the company’s preliminary data, expanded by 13.2% between 2022 and 2023, to reach R95.9-billion.

According to BMIT MD Chris Geerdts, this growth is “testament to the robustness of the local IT sector and the increasing reliance on technology in all aspects of business and daily life”.

Looking at the next four years, Greedts believes that although most traditional IT service areas will experience low growth, selected areas will more than compensate for this, driving an overall compound annual growth rate of 13.6% and taking the IT services market to a projected R160-billion in total annual revenue by 2027.

BMIT’s forecast for each of the various business areas can be seen in the chart below:

Forecast of IT services spending in rand, 2022-2027. Source: BMIT

Cloud services growth will clearly dominate, with a compound annual growth rate (CAGR) of 27%, while other areas receiving customer attention are cloud enablement and managed services, with a CAGR of 17%, and managed hosting, with a CAGR of 13%.

Geerdts notes that the growth in AI continues to gain pace rapidly, and BMIT sees a number of other key market drivers in place, including digital transformation, cybersecurity, cloud computing and automation underpinning the next growth phase.

However, there are also challenges ahead. As companies undergo digital transformation, they encounter the many complexities of cloud migration and integration, which must be addressed with appropriate planning and execution to avoid disruption to business operations.

The fundamental importance of customer experience to business represents both a challenge and an opportunity. BMIT attributes many of the successes of the largest players in the IT services market to their ability to adapt to changing market conditions, and their commitment to innovation and customer service.

Specialised IT services are also coming to the fore, with businesses focusing on value co-creation, and increasingly having to deliver on sustainable business imperatives. This trend is expected to continue, with more businesses seeking specialised IT services to help them navigate the increasingly complex digital landscape.

“Ever-present skills shortages are a challenge, but they also present an opportunity for growth and innovation in the IT services sector,” says Geerdts. “As the demand for skilled IT professionals continues to outstrip supply, there is a growing need for innovative solutions to bridge this gap. This presents another exciting opportunity for companies that understand this.”  – © 2024 NewsCentral Media

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Source: techcentral.co.za