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IT

South Africa IT spending to grow 2.4% this year

Wednesday 12 July 2017 | 11:06 CET | News
IT spending in South Africa is forecast to total ZAR 266 billion in 2017, a 2.4 percent increase from 2016, according to Gartner. The firm says software is predicted to be the best-performing segment, with a 13.2 percent increase year on year. Spending on devices - PCs, tablets, ultramobiles and mobile phones - is forecast to decline by 4.6 percent in 2017. Purchases of devices by businesses and consumers are slowing in the face of rising prices and in the expectation of new products.

According to Gartner, spending on communications services, the largest segment in South Africa, reached ZAR 122 billion in 2017, a 0.8 percent rise. Currency fluctuations against the US dollar can have a deleterious effect on IT spending in South Africa. The cost of most IT products is based in dollars, which means that local prices in rand must increase enough to cover costs and margins in dollars, says the study. 

The higher the dollar cost of a product or service, the more volatile the local price is to currency movements. President and distinguished analyst at Gartner, John-David Lovelock says South Africa has traditionally underinvested in IT. Lovelock says South African organizations continue to prioritise investments in software, as software spending is the means by which they will catch up with the rest of the world. However, 2018 is set to be a rebound year, he said, noting that the introduction of premium smartphones will increase device spending by 3.8 percent in that year. 

 



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