South African IT sector. South Africa has one of the largest information and communications technology (ICT) markets in Africa. It shows technological leadership in the mobile software field, security software as well as electronic banking services. As an increasingly important contributor to South Africa’s GDP, the country’s ICT and electronics sector is both sophisticated and developing. Several international corporates operate subsidiaries from South Africa, including IBM, Unisys, Microsoft, Intel, Systems Application Protocol (SAP), Dell, Novell, and Compaq. It is seen as a regional hub and a supply base for neighboring countries. South Africa’s ICT products and services industry is penetrating the fast-growing African market.  South African companies and locally based subsidiaries of international companies have supplied most of the new fixed and wireless telecoms networks established across the continent in recent years. Public Sector. Although the public sector is normally the largest player when it comes to IT spending, the short term sees the expenditure reducing to counteract the increasing debt from the economic downturn and the COVID 19 pandemic.  The South African Government’s budget in this sector focuses on key interventions to increase the usage of ICT to facilitate socio-economic justice and inclusion, improve competitiveness and prepare for the 4th / Digital Industrial Revolution. The State Information Technology Agency (SITA) manages the public sector tenders; all IT related procurement should go through this agency. South African Skills Development Program. The Government, via its programs and agencies will embark on an extensive skills development program aimed at training one million young people by 2030 in Robotics, Artificial Intelligence, Coding, Cloud computing and Networking. South Africa has a data protection law called the Protection of Personal Information (POPI) Act that prohibits the transfer of personal information to a third party who is in a foreign country unless such transfer complies with specific guidance outlined in the Act.  POPI legislation provided for an Information Regulator (IR), established in 2018, which will investigate and adjudicate complaints of privacy violations on an ad hoc, case-by-case basis. The IR is charged with regulating the protection of digital personal information.   The POPI Act came into full effect on July 1, 2021. Private Sector.  A big spender in this sector is the banking and financial institutions. As more people join the formal markets this industry is expected to grow in the next ten years. The retail banks are increasing spend to grow their digital platforms and concurrently increasing their online security measures. This will drive innovation in internet banking and more specifically mobile access and mobile money solutions. Private consumption will rise, but the strong growth of smartphones is likely to offset PC and laptop usage. In the short term, the decreasing household purchasing power and the depreciated Rand could also be responsible for tablets outselling notebooks, a less expensive piece of hardware and both outselling PCs. Households effected by the economic downturn will look for cheaper options. It is a strongly regionalized market, due to a lack of inter-city connectivity and infrastructure in parts of the country (rural areas) and it is very price sensitive. However, improvements to network infrastructure and adoption of cloud services and smart infrastructure will see this changing. In the short to medium term, there is a trend towards greater innovation in applications used for HR, payroll, and teleworking software to increase operational efficiencies and flexibility as more people work from home during restricted movement. This might encourage more firms to look at how to decrease capital expenditure and include remote and teleworking strategies to be included in their digital policies. U.S. Companies. Leading U.S. companies such as Microsoft are elevating South Africa into the lead group of countries for new product releases reflecting the growing importance of the market and the region. IBM opened an IBM Cloud Data Centre in Johannesburg in 2016. IBM will provide clients with a complete portfolio of cloud services. This is the result of close collaboration with South African, 100 percent black-owned firm Gijima and Vodacom and is designed to support cloud adoption and customer demand across the continent. This again demonstrates the willingness of foreign companies to invest in this market and use the local skills force to penetrate the market and the region. Amazon Web Services has also opened a data center in Cape Town.  CISCO and Dell both have training academies within South Africa to assist with the development of skilled labor within this sector. Sub-Sector Best Prospects The major worldwide trend of moving toward -based systems is one that has gained momentum in South Africa especially with increased improvements in connectivity, decreasing cost and data center infrastructure. The strong entrepreneurial drive within the local IT sector is creating larger demand for cloud-based services. Cloud based services and solutions are seen to offer cheaper, safer alternatives and efficiency gains in operations. Using the cloud is also seen to decrease susceptibility to piracy and cyber threats. Machine-to-machine (M2M) communication and the Internet of Things (IoT) is forecast to grow and is a new development globally and not just in South Africa.   With the rollout of fiber and cheaper data costs, opportunities will arise in this sector for connected living. South Africa has a thriving start up and tech market. The South African government via the ICT small, medium, and micro-enterprises (SMME) Development Strategy seeks to accelerate the growth and development in the SMME sector. Government support is given to partnerships for incubation, networking, and capacity building. Software Business software spending may be driven by customer-centric industries such as retail, financial and telecoms, where businesses are recognizing that solutions can be a competitive differentiator. Cloud-based software products are expected to drive growth. This sub-sector is still hampered by piracy and it is estimated by the Business Software Alliance (BSA) that around 35 percent of installed software in SA is illegal. The need for security products is growing with company spends increasing to about 8 percent of the total IT budget. The higher end of South Africa’s software market has matured, and companies are price sensitive and cautious about investing in new

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