Dimension Data South Africa remains as the country's largest IT services company, with a market share of 14%.
According to a research report by BMI-TechKnowledge, the South African IT services market reached a value of R21,5-billion in 2007, reflecting a year-on-year growth of 8,5%. The market is expected to grow at a compound annual growth rate (CAGR) of 10,1% over the next five years, reaching a total of R34,7-billion by 2012.
The three largest players have maintained their positions between 2006 and 2007, with the largest player, Dimension Data, accounting for 14% of the total South African IT services market in 2007, followed by Business Connexion and GijimaAst with 11,6% and 7,7% respectively.
Derek Wilcocks, executive director: services at Dimension Data Africa, says that that one of the biggest growth areas in the South African IT market was the outsourcing portion of the IT services which grew from 41,6% in 2006 to 43,4% in 2007.
"This can be attributed to the increase in the demand for hosted application management and hosting infrastructure services, as well as network and desktop outsourcing services (NDOS). With the move towards managed services, customers now have the option of outsourcing only selected areas of their IT environment, with the flexibility of simultaneously signing smaller managed services contracts with different service providers for different IT areas," says Wilcocks.
According to Wilcocks, managed services has become an integral part of successful organisations and in the current economic times has additional benefits.
"Choosing to outsource processes to external service providers that can perform them more efficiently, allows the organisation to focus on its core competencies and achieve greater efficiency."
Wilcocks says this growth is being driven by the fact that businesses are facing increasing expectations and competitive pressures in today's global environment.
"In addition many businesses are being hampered by a lack of internal IT expertise. The costs related to finding and retaining highly trained engineers in-house is significant and always on an upward curve. Highly trained technology experts are in short supply, and they are also in need of ongoing training to ensure they stay abreast of the latest trends and developments."
Wilcocks says that by appointing external service provides like Dimension Data, businesses can overcome this constraint.