IT Services - South Africa

South Africa

The IT Services market in South Africa is expected to see a significant increase in revenue, reaching US$6.16bn in 2024.
Among the various segments, IT Outsourcing is set to dominate with a projected market volume of US$2.20bn in the same year.
This indicates the country's reliance on outsourced IT services.
Looking ahead, the IT Services market in South Africa is anticipated to experience a steady annual growth rate of 4.94% from 2024 to 2029.
This growth trajectory is expected to result in a market volume of US$7.84bn by 2029.
This demonstrates the country's potential for continued development and expansion in the IT sector.
In terms of spending patterns, the average Spend per Employee in the IT Services market is projected to reach US$245.00 in 2024.
This indicates the financial investment made by South_African businesses in IT services to enhance their operations and stay competitive in the market.
However, in a global context, it is noteworthy that United States is expected to generate the highest revenue in the IT Services market, reaching US$522.00bn in 2024.
This highlights the dominance of the US market and its significant contribution to the global IT Services market sector.
Overall, the IT Services market in South Africa shows promising growth potential, with a focus on IT Outsourcing and a steady increase in revenue.
The country's investment in IT services reflects the importance of technological advancements for businesses in South Africa to stay competitive in the global market.
"South Africa's IT Services market is experiencing a surge in demand for cybersecurity solutions due to increasing cyber threats and data breaches."

Key regions: United States, China, India, Japan, Germany

Definition:
The IT Services market encompasses a wide range of services used by organizations to create, manage, and deliver information, and it includes services that provide assistance with various other business functions. The primary goal of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization's business objectives and requirements. The specific range of services offered may vary depending on the service provider and the client's requirements.

Structure:

IT Services contains four distinct markets that are based on different services:

IT Consulting & Implementation covers advisory services that help businesses evaluate their technology strategies and align them with their business strategies or internal processes.
Business Process Outsourcing (BPO) refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers).
IT Outsourcing refers to the external contracting of all IT-related services instead of relying on company-owned resources. In an IT context, these activities include IT administration, IT application, and web hosting services.
The Other IT Services market covers revenues for areas that are not specifically mentioned in the other markets, such as system integration, software installation and support, and IT education and training.

Additional Information:

The IT Services market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Cognizant, Hewlett Packard Enterprise, and TCS.

For more information on the data displayed, use the info button right next to the boxes.

Market

Region

Region comparison

Currency

Analyst Opinion

The IT Services market in South Africa has been steadily growing over the past few years, driven by various factors such as increasing adoption of cloud computing, big data analytics, and the Internet of Things (IoT).

Customer preferences: South African customers are becoming increasingly tech-savvy and are demanding more advanced IT services to help them stay competitive in the global market. They are looking for solutions that can help them streamline their business processes, improve efficiency, and reduce costs. Additionally, there is a growing demand for cybersecurity services, as businesses are becoming more aware of the risks associated with cyber attacks.

Trends in the market: One of the major trends in the IT Services market in South Africa is the increasing adoption of cloud computing. Many businesses are moving towards cloud-based solutions as they offer greater flexibility, scalability, and cost-effectiveness compared to traditional on-premise solutions. Another trend is the growing use of big data analytics, as companies are looking for ways to extract valuable insights from the large amounts of data they generate. In addition, there is a growing interest in the Internet of Things (IoT), as businesses seek to leverage the power of connected devices to improve their operations and gain a competitive edge.

Local special circumstances: South Africa has a unique set of circumstances that are shaping the IT Services market in the country. One of the biggest challenges facing the industry is the lack of skills and expertise in certain areas, particularly in cybersecurity. This has led to a shortage of qualified professionals, which is driving up the cost of hiring and training staff. Another challenge is the country's relatively slow internet speeds, which can limit the adoption of cloud-based solutions and other advanced technologies.

Underlying macroeconomic factors: The IT Services market in South Africa is also influenced by broader macroeconomic factors, such as the country's GDP growth, political stability, and foreign investment. The South African economy has been experiencing slow growth in recent years, which has impacted businesses across all sectors. However, the government has been taking steps to promote investment and boost economic growth, which could have a positive impact on the IT Services market in the future. Additionally, political stability is a key factor in attracting foreign investment, and any instability could have a negative impact on the industry.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.