ICT research and advisory firm Gartner, Inc. says that South Africa’s IT expenditure is projected to grow by 3.8% this year. This means that South African companies will spend an estimated R272 billion on IT solutions. According to Gartner, software spending is set for a record year-on-year growth of 11.4% in 2016.
“Last year we witnessed an 8% increase in overall IT spending by South African organisations, and in 2016 companies are maintaining this, prioritising software”, says John-David Lovelock, research vice president at Gartner.
Lovelock adds, “Once you have the platform in place, your priority is to add software. South African companies are doing just that this year, purchasing their solutions in North America and Europe primarily, while buying cloud storage where the data needs to reside.”
Device spending, on the other hand, is expected to drop by 6.5% in 2016. Lovelock notes that there has been a decline in both consumer and business segments this year, particularly by consumers: “Users in South Africa are holding onto their expensive phones longer and refraining from buying cheaper phones.” As a result of rising prices, the spending on mobile phones decreased by 4.5% from 2015.
Investments in cloud infrastructure and SaaS remain low in South Africa and Lovelock states that, in addition to the Nexus of Forces (mobile, cloud, big data and social), South African companies should consider feasible digital alternatives, such as cloud, VoIP and digital assistance.