Gartner has predicted that South African firms will be forking out R272 billion on IT this year.
If spending is as predicted, the country will be spend 3.8% more in 2016 than last year.
According to the analysis company, this year will also see is highest ever year-on-year spending on software, predicted to be at 11.4% of the total IT spend – or R25 billion.
“Last year we witnessed an 8% increase in overall IT spending by South African organisations, and in 2016 companies are maintaining this, prioritising software,” explained John-David Lovelock, research vice president at Gartner.
He explained that the spend on software was somewhat expected, as most systems run on software that needs to be maintained and updated.
“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.”
From the table above it is clear that South African companies won’t be spending as much as previous years on devices, showing a decline of 6.5% at the end of this year. Lovelock explained that it is because IT spend on device are cyclical, as there was a dip in spending in 2014 as well.
“Both the consumer and business segments are showing a decline in 2016, with the larger drop coming from consumers. Users in South Africa are holding onto their expensive phones longer and refraining from buying cheaper phones. With prices going up, the total spend on mobile phones was down 4.5 percent from last year,” he said.
But according to Lovelock, South Africans need to move more of their business to the cloud. “Cloud infrastructure and software-as-a-service application spending remains low in South Africa. To embrace digital transformation, South African organisations need to continue investing in the Nexus of Forces (mobile, cloud, big data and social) and embrace viable digital alternatives, such as cloud, VoIP and digital assistance, even if purchased from overseas vendors,” he concluded.
[Image – CC by 2.0/Kengo HAMASAKI]