2013-09-17 09:02:56 - Fast Market Research recommends "South Africa Information Technology Report Q4 2013" from Business Monitor International, now available
The rapid depreciation of the South African rand since the start of 2013 poses significant risks to the IT sector. We expect currency weakness to increase the cost of imported IT products and components, such as PCs, laptops, printers and servers. This development, along with downbeat business confidence, weak private consumption and the continuing decline in the sales of PCs, poses downside risks to our outlook for the computer hardware market in South Africa. However, the IT services segment is set to benefit from this currency weakness as the local business process outsourcing (BPO) industry becomes more price-competitive. We have, however, not altered our forecasts for the overall IT market in view of these developments as we expect continued government
procurement to offset the likely shortfall in demand from businesses and consumers, at least in the short term.
Full Report Details at
- www.fastmr.com/prod/673263_south_africa_information_technology_r ..
Headline Expenditure Projections
Computer hardware sales: ZAR38.89bn in 2012 to ZAR43.88bn in 2013, +12.8% in local currency terms. We retain the view that migration to Microsoft Windows 8 will provide a boost in 2013.
Software Sales: ZAR16.89bn in 2012 to ZAR18.60bn in 2013, +10.1% in local currency terms. Strong private consumption will drive growth, although this will be buffeted by the prevalence of piracy.
IT Services Sales: ZAR33.11bn in 2012 to ZAR34.39bn in 2013, +3.9% in local currency terms. We expect cloud computing and BPO services to drive the uptake of managed services and outsourcing. Risk/Reward Ratings: South Africa drops one place, to sixth position, in our Q413 MEA IT RRR table. South Africa's aggregate score of 57.6 is a slight decrease from our last update on the back of a weak Country Risk rating.
Key Trends And Developments
German datacentre operator Hetzner has begun construction of its new facility in Gauteng, South Africa. The new datacentre is part of a planned datacentre park to be built between Johannesburg and Pretoria, capturing the largest market for enterprise customers in the country. Datacentre services near Johannesburg are offered by a number of local players including telecoms
operators MTN, Vodacom and Neotel as well as local IT players such as Business Connexion. Hetzner will be one of a small number of international players entering the market there. Indeed, this is Hetzner's first datacentre venture outside Germany, highlighting the potential of the South African market for growth. With ambitious growth plans, seeing Hetzner building a datacentre park of five datacentres, the company clearly sees potential for strong growth and expects considerable demand.
Market consolidation remains a key theme in the South African IT sector, with companies seeking scale and/or efficiency improvement opportunities to cope with new market dynamics. In July 2013, Altech's minority shareholders gave approval to Altron to buy them out. Altron already holds 61% of Altech, but the buyout will give it full control of the company and the permission to delist Altech from the Johannesburg Stock Exchange (JSE). According to Altron's CEO, Robbie Venter, the rationale for the transaction was the need to synergise key business areas on the back of increasing convergence of telecoms and IT services. Also in July, the Competition Commission of South Africa approved a joint venture transaction between BCX and NorthgateArinso. The joint venture, called NGA Africa, will deliver human capital management services and technologies that support business outcomes for local, multinational and public sector organisations in South Africa and other key markets in Africa.
Report Table of Contents:
BMI Industry View
- Table: South Africa IT Industry - Historical Data & Forecasts
- Macroeconomic Forecast
- Table: Real GDP Growth, % chg q-o-q, SAAR
- Table: South Africa - Economic Activity
Industry Risk Reward Ratings
- Table: Middle East And Africa Risk/Reward Ratings Q413
- IT Services
Industry Trends And Developments
- Table: SITA
- History And Market Structure
- Computer Hardware
- IT Services
- Internet Competitive Landscape
- Business Connexion
- Oracle Corp
- Table: Oracle: Selected Acquisitions
- Table: IBM Acquisitions, 2012 (Total Value, US$3.964bn)
- Microsoft Corporation
- Sahara Computers
- Demographic Outlook
- Table: South Africa's Population By Age Group, 1990-2020 ('000)
- Table: South Africa's Population By Age Group, 1990-2020 (% of total)
- Table: South Africa's Key Population Ratios, 1990-2020
- Table: South Africa's Rural And Urban Population, 1990-2020
- How We Generate Our Industry Forecasts
- IT Industry
- IT Ratings - Methodology
- Table: IT Business Environment Indicators
- Table: Weighting Of Components
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.