According to new research published by International Data Corp (IDC), the overall spending on IT solutions in South Africa is expected to cross the US$13 billion mark in 2015 (R143 billion at the current exchange rate of R11/$.)
The consumer segment is expected to account for the largest portion of this at $3,1 billion in IT spending next year, although the growth in this area will remain relatively flat over the next few years.
The finance vertical, which includes banks, insurance companies, and securities and investment companies, will be the second biggest vertical in terms of IT spending. Total expenditure for this vertical will top $1.9 billion, driven by increased investments in mobility and security.
According to the IDC, “As the growth opportunities from traditional channels and business are declining, banks in South Africa are shifting their focus to the unbanked, and mobile is the most sought-after channel for serving the unbanked due to its already-high and increasing levels of penetration in South Africa.”
The next biggest vertical is the government sector, which is forecast to reach $1,6 billion in 2015. This will be driven by ongoing automation and digitalisation initiatives as part of the drive to bring government services to online and mobile platforms.
IT and telecoms will also be an important vertical with an expected expenditure of $1,4 billion. Facing high competition and low growth in their traditional spheres of business, telecoms players are increasingly looking to expand into neighbouring fields such as internet and financial services.
According to IDC, “Telcos are adding cloud computing, data centres, and disaster recovery services to their product and services portfolios, and also targeting the unbanked through payment-related services.”
Jebin George, a senior research analyst at IDC Middle East, Africa, and Turkey says, “IDC expects the IT market in the country to remain buoyant and continue to grow during the next four years. The consumer, finance, communications, and government sectors will remain the biggest IT spenders, while the fastest growing verticals over this period will be transportation, utilities, and healthcare.”