South Africa’s IT spend to total R266bn in 2017

According to a report by research giant Gartner, South Africa’s total IT spend is set to hit R266.1-billion by year-end — a 2.4% increase over 2016.

“South Africa has traditionally underinvested in IT,” Gartner’s VP John-David Lovelock notes, but did suggest that expenditure is slowly rising due to a keen focus on specific areas.

“South African organisations continue to prioritise investments in software, as software spending is the means by which they will catch up with the rest of the world.”

Notably, there is a vast spending differential between hardware, software and services.

Gartner suggests that software is the sector experiencing the biggest growth surge in 2017, with a forecast 13.2% increase over 2016.

Devices on the other hand will likely see a decline of 4.6% over 2016, largely blamed for decreased spend by businesses and customers due to rising prices and the promise of new smartphone, ultramobiles, tablets and PCs.

Other sectors however yield more promising figures.

South Africa’s business and consumer IT device expenditure is set to decline for another year, dropping to R36.7-billion

Communications remains the biggest segment in South Africa, accounting for just below half of all IT spend in the country. In 2017, this figure is projected to hit R122-billion — an increase of 0.8% year-on-year.

Data centre expenditure is expected to grow by 1.2% in 2017 to R8.192-billion, while IT services is also expected to climb by 5.6% to R70.996-billion. This makes it the second largest sector in the country.

As for 2018’s projections, Gartner is forecasting a mixed bag.

Software is expected to continue its growth spurt, with expenditure increasing by 12.4% year-over-year to R31.7-billion.

The devices category is set to reverse its 2017 slump, growing by 3.8% in 2018 to R38.1-billion.

Data centre expenditure however is set to take the device category’s underperforming moniker, declining by 0.19% — a drop of around R15-million.

Overall, 2018’s IT spend is set to increase by 3.4% to around R275-billion, still 0.5% shy of 2016’s year-on-year growth of 3.9%.