Cloud subscriptions to be worth $1.7 billion in South Africa by 2024

Global CRM company Salesforce has published research from market intelligence firm IDC that finds cloud computing annual subscriptions in South Africa will grow 29% annually, from $370 million in 2018 to $1.7 billion in 2024.

Spending on non-cloud software will decrease 4% annually over the same period.

Cloud computing is growing exponentially, the research found, driving economic benefits in South Africa. It is generating incremental value for companies through enabling lower investments in IT maintenance and improvements, which currently comprise 70% of IT spend, and democratising innovation.

IDC’s forecasts show a significant payback from investments in cloud computing out to 2024. But even by then, spending on public cloud computing in South Africa will be less than 11% of spending on total IT – meaning there is practically unlimited growth opportunity.

Additionally, IDC said Salesforce and its ecosystem of partners and customers will create $2.1 billion in new business revenues and 5,240 new, direct jobs in the country by 2024.

Those 5 240 jobs are in turn expected to create a further 6 900 indirect jobs due to opportunities and jobs created in the supply and distribution chains serving those Salesfrorce customers, and new employees spending money in the general economy, IDC said.

IDC estimates that for every dollar Salesforce made in South Africa in 2019, the ecosystem made $4.75. By 2024, that figure is predicted to be $7.03

According to IDC, the products and services provided by the Salesforce ecosystem in South Africa are dominated by professional services (64%) but also include add-on cloud subscriptions (17%), as well as on-premises software, hardware and networking (19%).

“With this sanitary emergency, we realised that digital is becoming more and more important. In fact, according to IDC’s global forecast of today’s market for digital transformation-related technology, by 2024 nearly 50% of cloud software spending will be tied to digital transformation,” said Petra Jenner, general manager and senior VP – Europe, Middle East, and Africa Emerging Markets, Salesforce.

“Salesforce’s rapidly growing economic impact in South Africa – with $2.1 billion in revenue and 12 140 jobs by 2024 – shows that organisations and channel partners are delivering innovative digital business models to foster new levels of employee and customer experiences and business competitiveness.”

Because organisations that spend on cloud computing subscriptions also spend on ancillary products and services, in 2019 for every dollar Salesforce made in South Africa, the ecosystem made $4.75 – and that figure will increase to $7.03 by 2024. In other words, the Salesforce ecosystem in South Africa in 2019 was 4.8 times larger than Salesforce itself.

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Cloud subscriptions to be worth $1.7 billion in South Africa by 2024