subscribe: Daily Newsletter

 

SA’s top three provinces the big IT spenders

0 comments

The lion's share of South Africa's IT spend is disproportionately concentrated in the three provinces – Gauteng, Western Cape and kwaZulu-Natal – responsible for the bulk of the country's economic strength.

About 65% of the national GDP is contributed by South Africa’s top three provinces and it follows that an even greater proportion of the R100-billion combined IT and telecoms business spend in 2007 is attributable to these provinces.
Of the total, 55% is IT spend on hardware, software and services, and the remaining 45% is on telecommunications voice and data services.
Yet, as Tertia Smit, a BMI-TechKnowledge telecommunications analyst, points out: “ICT vendors and service providers need to realise that the business ICT spend does not follow precisely the same trend as the provincial GDP contributions.
"The three afore-mentioned provinces combined account for over 80% of the national ICT business spend, and less than one-fifth then is generated by the remaining six provinces.
“Not only is the market dominated by these three provinces, but by four particular industry sectors as well, namely: finance, real estate and business services; general government services; wholesale and retail trade; and the manufacturing sector , which when combined, form approximately 70% of GDP,” states Smit.
“The majority of big corporates and multinationals as well as  those with high technology usage, like the financial and business services, have clustered in the major cities  for a number of obvious reasons," she adds.
"This correspondingly attracts the ICT  vendors and service providers to have  outlets in these major centres, which in turn facilitates ease of access  and support to ICT solutions and services .”
BMI-TechKnowledge has released a regional report that examines the nine provinces in South Africa in depth including: the state of the each province’s economy, the top vertical industry sectors, regional economic opportunities, number of companies per sector and in particular, the ICT spend per province per company size and type of ICT spend.
“One of the other interesting findings is that although the very large companies make up less than 0.5% of the total number of businesses in SA, they contribute to over one third of the ICT spend. Conversely  a third of all companies ( about 200 000) companies do not even make up 3% of the business ICT spend,” Smit says.