South African spending on IT services is going to continue expanding over the next few years to 2020 – with spending in 2016 expected to balloon over 10.3% alone.
According to the latest data from BMI-TechKnowledge, spending on IT services – including consulting, training, hosting and support – is expected to be over R63 billion in 2016, up from R56.9 billion in 2015.
This growth is expected to continue to 2020, where the industry is expected to see compound annual growth of 8.9% per year, to reach an estimated R87.3 billion at the end of the decade.
The biggest contributor to the IT sector this year was growth in IT outsourcing, with managed services – specifically in cloud services – also being a major contributing factor.
“The IT skills shortage (IT professionals are amongst the top scarce skills in South Africa) and the need for management of virtual environments, backup and disaster recovery have been key drivers in the market,” the group said.
“Cloud is starting to deliver on its promises and is very much part of the landscape now as connectivity continues to improve and security now table stakes.”
According to BMI-TK, significant IT service growth areas are expected to be cloud services, custom application development and system integration as big data Analytics, enterprise mobility and IoT (the Internet of things) gain traction in the SA market – and organisations require these technologies to be integrated into their existing environment.
The graph below shows the growth projection for IT services in South Africa between 2016 and 2020.