Mark Walker, director of vertical and end-user research practice at IDC Middle East, Africa and Turkey, says the most significant change from last year's predictions is the overall size of the market and the growing global interest in the Sub-Saharan region.
“There has been significant interest in the area in terms of development and it is seen as a sort of antidote for investment following the impact of the recession on other markets,” says Walker.
The IDC predicts IT spend in Sub-Saharan Africa will grow steadily, with Angola, Kenya and Nigeria taking the lead in this regard.
Spending in SA will reach $11.5 billion (up 6% from 2010) and Nigeria will pass the $1 billon mark for the first time as a result of the benefits of undersea cables becoming operational.
SA leads growth
“The size of the South African market specifically has grown substantially, and this growth is driven by government initiatives which are stimulating expenditure,” says Walker. “The prominence given to IT by communications minister Roy Padayachie also bodes well for industry growth.”
One of the IDC predictions states public sector IT spending will surge to $2.7 billion (up about 10% from 2010), spurred on by major infrastructural investment and the speeding-up of e-government projects.
Walker adds that other key driving forces for growth in SA will be the opening up of digital spectrum, as well as the increased use of smartphones and the resultant demand for improved data services.
“As they say, necessity is the mother of invention, and the uptake of data is creating that necessity,” notes Walker.
Emerging players
In line with this, the IDC predicts a five-fold increase in data volumes in Sub-Saharan Africa over the next 10 years, driven by the Internet (especially broadband and social media), e-mail, images and video; as well as new regulations/legislation such as FICA and RICA, in SA.
Looking beyond SA at other areas of substantial growth, Walker says Angola and Kenya are growing at a “fantastic rate of knots” and are key emerging players.
“The enthusiasm and the energy of the Kenyans, coupled with their entrepreneurial spirit, actually puts SA to shame,” says Walker.
“Kenya's proximity to India and the Middle East, and its access to the new undersea cable are all factors that place the country in a good position to overtake SA and become the tech leader on the continent, not in terms of overall size, but in terms of innovation.”
Kenya on the rise
Since Kenya is in a similar time zone to SA, is English-speaking, and has a well-educated population, according to Walker, it poses a credible threat to SA's dominance in terms of technology and innovation.
“However, from a business point of view, SA has about two-thirds of the marketplace, so for investors from the West and Europe, as well as increasingly India and the Far East, SA is seen as the ideal platform for expansion into the continent,” adds Walker. “So up to now, SA has had the commercial advantage.”
Looking ahead in SA, Walker says the industry's reaction to the ICT charter will be something to keep an eye on.
Charter issues
“Microsoft has come up with a groundbreaking approach to the issues raised in the charter by complying with government regulations, but in an innovative way. This could potentially offer a template for other businesses to follow suit.”
Walker does, however, raise the concern that once the limelight begins to fade and other companies try to replicate the model, “such due diligence may rapidly descend into a 'favours for friends' environment, which would be detrimental to the industry”.
He adds that, at a recent event for CIOs, he found it encouraging to see that “BEE appeared to be history – there was great representation and the discussion was centred around tech and taking business forward”.
“This really augers well for the future, as long as we all work together towards common goals, and don't get sidetracked by politics.”
The top 10
The top 10 predictions in full, as announced recently at the IDC CIO Summit in Johannesburg, are as follows:
- IT spending in Sub-Saharan Africa will grow steadily, with Angola, Kenya and Nigeria taking the lead in this regard. Spending in SA will reach $11.5 billion (up 6% from 2010) and Nigeria will pass the $1 billon mark for the first time as a result of the benefits of undersea cables becoming operational. The skills shortage, lack of power and connectivity will still remain key inhibitors.
- Public sector IT spending will surge to $2.7 billion (up about 10% from 2010), spurred on by major infrastructural investment and the speeding-up of e-government projects.
- Virtualisation adoption is to reach its tipping point. Over 50% of South African organisations have virtualised to some extent, with one in five new servers virtualised in SA and one in eight virtualised elsewhere in Africa. The moves to reduce capex, increase operational efficiency and expand storage capacity are the main drivers.
- Cloud computing will no longer be mere hype, as over 60% of South African organisations are either deploying and or planning to deploy cloud technology in the near future. Private clouds are emerging as the preferred model, since security, connectivity and loss of control issues are keeping interest in public clouds at a low level.
- An at least five-fold increase in data is predicted over the next 10 years, driven by the Internet (especially broadband and social media), e-mail, images and video; as well as new regulations/legislation such as FICA and RICA, in SA.
- The power of basic analytics will start to be realised as increased competition and the need to improve operational efficiencies and drive new revenue streams will fuel investment in customer and operational data management. The banking sector will be at the forefront of this move as it deploys corporate performance management solutions as branches expand and banks comply with global regulations such as IFRS and Basel II and III.
- The mobile market will enter an era of intense competition and high penetration. For example, Bharti Airtel's entry into Africa through the acquisition of Zain's operations promises lower cost services and deeper coverage. In addition, regulatory measures are geared at increasing access through lower tariffs and the mobile handset market is growing steadily from the sale of entry-level models.
- IT security spending will grow as Africa plays catch-up and the continent becomes a potential target for cyber crime. In addition, the ever-increasing use of smartphones will expose mobile vulnerabilities, fuelling the need for more sophisticated mobile security policies.
- Telecommunications companies will move a step closer in their evolution from communications to ICT, as both fixed and mobile operators seek to migrate from merely providing “dumb” pipes to “smart” pipes through content delivery. Also, mobile networks will become a key aspect of the cloud, offering easier access through the rapidly growing number of mobile devices.
- Broadband growth will gain momentum spurred on by the new capacity that is becoming available, although last mile access will remain a key focus area that will affect both adoption and growth.
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Autor(en)/Author(s): Kathryn McConnachie
Quelle/Source: IT Web, 14.04.2011
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