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Gartner forecasts IT spending in South Africa will grow this year

Gartner forecasts IT spending in South Africa will grow this year

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IT spending in South Africa will total R303.46 billion in 2019, a 3.9% increase from 2018, according to Gartner.

“South Africa is still behind in terms of overall IT spending and continues to have a technology debt to pay off,” said David Lovelock, Research Vice President at Gartner.

“However, by achieving 3.9% growth in 2019, South Africa will be one of the fastest-growing countries in the world — ranked fourth globally.”

Consumer spending was once the IT spending highlight in South Africa, driven by adoption of mobile phones, but no longer. Gartner expects consumer spending on devices such as PCs, tablets and mobile phones to decline by 2020, and to keep contracting through 2023.

“Saturation in the PC, mobile phone and tablet device markets has limited the number of new buyers,” added Lovelock.

“And spending on mobile phone replacements and upgrades won’t be enough to sustain current spending levels.”

Spending on devices in South Africa is projected to total R46 billion in 2019, up 3% from 2018. This growth rate has more than halved, year over year, which shows that South Africa has largely moved past the stage of acquiring personal devices and is now more concerned with using them.

South Africa: IT Spending Forecast (Millions of Rand)

  2018
Spending
2018
Growth (%)
2019
Spending
2019
Growth (%)
2020 Spending 2020 
Growth (%)
Communication Services 129,837 3.2 132,852 2.3 133,572 0.5
Data Centre Systems 9,053 16.1 8,598 -5.0 8,898 3.5
Devices 44,615 7.5 45,966 3.0 40,328 -12.3
IT Services 79,685 4.9 83,897 5.3 87,996 4.9
Software 28,849 12.9 32,147 11.4 35,850 11.5
Total 292,040 5.6 303,460 3.9 306,644 1.0

Due to rounding, figures may not add up precisely to the totals shown.

Source: Gartner (July 2019)

Adoption of Cloud Computing will keep rising in South Africa

Software spending in South Africa will reach R32 billion in 2019, a 11.4% increase from 2018.

“Cloud computing is a new reality in South Africa,” said Lovelock.

“South African organisations are consuming significant amounts of cloud services, including software-as-a-service, platform-as-a-service and infrastructure-as-a-service.

“CIOs in South Africa have started adopting cloud-first strategies. With both Microsoft and Amazon planning to open local hyperscale data centres in 2020, adoption and use of the cloud will only increase in South Africa.”

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