South Africa’s IT landscape

The top IT services providers in South Africa are in a battle for dominance as the competitive landscape heats up in line with the continuing maturation of the local market.

This is according to the IDC, referencing its ‘Competitive Profiles and Analysis of Leading IT Services Players in South Africa, 2013’.

The IDC positions Business Connexion at the top of the list of leading IT services providers, displacing long-time incumbent, Dimension Data.

BCX increased its share of the market’s value to 14.2% in 2012 thanks to strong annuity-based revenues and an expansion of its service offerings through a number of strategic acquisitions.

The vendor also benefited from its ability to execute a range of IT services, from software and hardware support installation, to systems integration and information system outsourcing (ISO).

Dimension Data places second in IDC’s rankings of the leading service providers in South Africa, vacating the top spot it held in the previous year. Meanwhile, T-Systems maintains its position as the third leading IT services provider in South Africa.

Large providers are responsible for a major portion of South African IT services market revenues. In 2012, for example, the top two providers accounted for 28.1% of the total IT services market revenue, with the top ten together accounting for 64.5%.

The market supremacy of the large providers has increased over recent years and IDC believes that this top-end dominance will continue over the next few years.

To meet increasingly complex customer requirements, service providers have expanded their portfolios, often through acquisitions. Providers are also expanding to access opportunities in untapped markets, targeting end-user organizations either by vertical or by business size, the IDC said.

In light of the rapidly maturing South African IT services market, IDC expects this acquisition trend to continue in 2014 and beyond.

An increasing number of providers in adjacent sectors are also entering the IT services market, the research firm notes. Telcos are aggressively targeting network-related services and providing cloud and data center services.

Meanwhile, hardware providers are pushing the benefits of integrated systems and offering specialized implementation services.

As such, IT services providers that demonstrate an ability to offer hardware, software, and service solutions, either through internal delivery capabilities or through a wider partnership ecosystem, will present themselves as strong candidates in what is a busy and increasingly crowded market.

“Local providers, which often have a multinational presence, are increasingly capturing the lead in the market, with six of top ten providers in 2012 being local firms, compared to five in 2011,” said Lise Hagen, research manager for software and IT services at IDC South Africa.

“There is also an increase in the number of smaller IT services players, especially those focused on niche markets.”

“However, the ability of a firm to provide specialized services could also lead to acquisitions by larger players looking to expand their service offerings. Acquisitions, in fact, will continue to play a large part in the South African IT services landscape.”

More on SA IT

South Africa’s Internet to GDP ratio

South Africans spend more on mobile: report

How mobile is lifting South Africa’s GDP

Must Read

Partner Content

Show comments

Trending Now

Follow Us

South Africa’s IT landscape