The IT Industry in South Africa 2024

Challenges

Delayed implementation of vital projects such as digital migration and SA Connect and development of appropriate policies and regulations. Extreme shortage of professional skills to offer existing services and keep pace with new developments, resulting in a reliance on external and imported skills. Fallout from IT company involvement in procurement irregularities. Government’s fiscal challenges have led to delays in some IT projects. Hardware retailers have been negatively affected by ports delays. High cost of importing ICT hardware, software, and services due to exchange rate. Loadshedding. Network and ICT readiness are not as high as they should be. Reliance on imported products. Security threats from increasing cybercrime and a lack of associated skills. The slowing economy, which reduces IT spending by companies and the government.

Introduction

While the burst of growth in the IT sector during the pandemic has dissipated, demand for software and hardware products is expected to remain strong. Demand will be driven by digital transformation at companies and the adoption of technologies such as artificial intelligence and the internet of things, which require stronger computing power. Loadshedding has had positive and negative effects on the IT industry as it has led to a surge in demand for inverters, solar panels, and batteries, but affected the rollout of data centres, which are energy intensive. Other challenges include the global shortage of IT skills, delays in state ICT initiatives and IT projects and a slowdown of venture capital funding to startups, all of which have put a brake on IT spending.

Opportunities

Cloud computing value-added services. Demand for cybersecurity products. Development of smart cities and provinces and a large number of e-services such as e-learning, e-payments, e-governance, and e-commerce. Ecommerce Fintech products and solutions. Green technology or more efficient IT hardware. Tech products and solutions developed by innovative techs startups. The digital transformation trend is fuelling growth for IT products and services.

Outlook

Demand for software and hardware products is expected to remain strong. This includes demand for digital transformation solutions as businesses use technology and innovation to re-invent and improve their operations. Growth will also come from cybersecurity services, local service providers offering value-added cloud computing services, and the development of fintech services.

Report Coverage

This report focuses on the information technology (IT) industry, including hardware manufacturing, assembly, and supply; software development and supply; and retail sales of hardware and software. It includes information on the size, state and economic contribution of the industry and trends including digital transformation, cloud computing, fintech, ecommerce and cybersecurity. It includes information on corporate actions, trade, government’s procurement and IT spend, corruption and competition issues. There are profiles of 102 companies including notable players such as Adapt It, Altron, 4Sight Holdings, Datatec, Mustek, and EOH, major international players such as Microsoft, IBM and Dell and retailers such as Takealot. Local cloud service providers include Synthesis, BlueSky (which provides cloud consultancy services for Salesforce), AWS, Tableau, and Alteryx products, and Obsidian. Trends Demand is growing for the use of big data, robotics, cloud computing, IoT and AI solutions. Emerging technologies drive demand for innovative solutions and digital transformation services. Financial regulation and security concerns drive demand for compliant and secure financial transactions. Hybrid remote and office work. Increasing interest in green technology or more efficient IT hardware. Increasing risk of cybercrime drives demand for secure IT solutions. IT workloads are shifting to the cloud, and large IT companies are managing clients’ shift to the cloud. There is growing demand for fintech solutions driven by the growth in ecommerce and the adoption of mobile technology.