IT services in South Africa: unstoppable despite the slowdown

We expect the growing demand from the public sector, financial services and the telecoms industry to spur the growth of the South African IT services market in the medium term. Large investments are anticipated from these sectors.

Report Highlights

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Executive summary
In a nutshell
Ovum view
Key messages
South Africa overview
Background
Demand-side analysis
By vertical
Overview
Banking and financial services
Initiatives countering online and credit card fraud expected to drive demand for security services
Introduction of enhanced mobile banking solutions to drive demand for ICT services
Expansion of ATM networks and launch of improved ATM services will offer opportunities for a range of ICT services
South African banks expanding to other parts of Africa will spur demand for networking and security services
Banks’ initiatives to introduce special offerings for the SME segment will drive spending on upgrading banking systems
Healthcare
Increasing interest in mobile phone-based healthcare applications will boost demand for application and integration services
Private healthcare providers’ geographical expansion will drive demand for integration services
Manufacturing and mining
Need to improve operational efficiency will drive the demand for supply chain management
ICT to improve workplace safety
Public sector
ICT projects related to the upcoming FIFA World Cup will drive public sector spending
Demand from the defence segment is propelling public sector IT services spend
The postal department will also contribute to ICT demand as it upgrades its infrastructure and systems
Demand for application services will be strong as the government takes initiatives to improve its service levels
Expansion of online learning resources will spur demand for content and data management services
Increasing interest in open source will drive demand for application implementation and maintenance services
Retail
Rapid growth of e-commerce will fuel demand for web-based application and security services
Increasing use of chip-and-PIN banking cards will spur the demand for point-of-sale upgrades
Local retail outlets’ expansion will boost demand for networking and application services
Telecommunications
Consolidation among telecoms companies will drive demand for integration services
Private initiatives to improve broadband infrastructure will offer opportunities in network services
The upcoming FIFA World Cup is expected to boost demand for application services from the telecoms segment
Telekom’s plan to outsource business processes after the FIFA World Cup will offer large opportunities for IT services vendors
Transport and logistics
Installation of electronic toll systems across road networks will drive demand for ICT
Major upgrades of the transportation segment are planned, offering opportunities in a range of ICT services
Introduction of transport cards to boost demand for ICT services from the transport segment
Initiatives to modernise the railways’ asset management and communications systems to boost demand for IT
Demand by service line
Overview
Trends in application services
Changes in financial reporting requirements will fuel demand to upgrade enterprises’ applications
Demand for SaaS offerings will be driven by greater broadband penetration and availability of higher bandwidth
Trends in infrastructure services
Phishing and hacking force enterprises to invest in security services
Demand for infrastructure services will be strong as SMEs deploy first-generation infrastructure
Trends in BPO services
Supply-side analysis
Overview
Vendor strategies
Foreign vendors in South Africa have to meet the requirements of the Black Economic Empowerment Charter
Focus on building longstanding relationships with suppliers and clients
Address skill shortages by investing in education and training programmes at local universities
Top ten IT services vendors in South Africa
Local players
Dimension Data Holdings
Altech
Business Connexions (BCX)
GijimaAst
Datacentrix
Faritec
Paracon Holdings
Ansys
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List of Tables
Table 1: Summary of IT services drivers by vertical
Table 2: Top ten South African IT service players*
Table 3: Dimension Data Holdings’ revenues and profits ($ millions)
Table 4: Dimension Data Holdings’ core activities
Table 5: Altech’s revenues and profits ($ millions)
Table 6: Altech’s core activities
Table 7: BCX’s revenues and profits ($ millions)
Table 8: BCX’s core activities
Table 9: GijimaAst’s revenues and profits ($ millions)
Table 10: GijimaAst’s core activities
Table 11: Datacentrix’s revenues and profits ($ millions)
Table 12: Datacentrix’s core activities
Table 13: Faritec’s revenues and profits ($ millions)
Table 14: Faritec’s core activities
Table 15: Paracon’s revenues and profits ($ millions)
Table 16: Paracon’s core activities
Table 17: Ansys’ revenues and profits ($ millions)
Table 18: Ansys’ core activities
List of Figures
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