The South African IT services market is extending its growth streak, with an estimated 2024 close of R104.9 billion, ratcheting up to a projected R182 billion revenue in 2028, according to BMIT’s Managing Director, Chris Geerdts. This represents a healthy compound annual growth rate (CAGR) of 14.8%.
The chart below, from BMIT’s latest IT Services Report, clearly shows how growth is fuelled primarily by the increasing demand for cloud services, and (to an extent) by custom application development, with other IT sub-sectors displaying low growth, or some cases, even declining revenue.
Geerdts say the ongoing dominance of cloud (cloud services, cloud enablement, and managed services) in the IT Services market, is supported by cloud-driven digital transformation initiatives, which are reshaping the IT landscape. Similarly, he sees custom application development as crucial in meeting the evolving needs of businesses in the digital age. Meanwhile, he believes that generative AI will continue to gain traction rapidly, with the potential to revolutionise content creation, customer service, and various other business functions, further driving cloud service consumption. According to BMIT’s research, organisations are already looking to adopt hyper-automation in the short term to streamline processes and improve efficiency.
Meanwhile, more than ever, robust cybersecurity solutions are essential in mitigating the threat of cyberattacks, which are growing in frequency, intensity and sophistication.
However, the Report warns that despite the positive growth outlook, organisations in South Africa face budget constraints, necessitating cost-effective IT solutions. Geerdts sees this as an opportunity for IT service providers to think smart – for example “by adopting a value co-creator role, partnering with businesses to optimise IT investments and drive sustainable growth, rapidly being enhanced with generative AI capability”.