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Update on South African IT MarketUpdate on South African IT Market

Adrian SchofieldPresident

Information Industry South Africa

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You have seen the movie…

One of 53 countries in Africa 46 million out of 800 million people Main centres:

Jo’burg/Pretoria (Gauteng) Cape Town (Western Cape) Durban (Kwa Zulu Natal – KZN)

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Software

$1.8 billion market, growing at 11.5% CAGR over next 5 years (mining, education, government & ERP application upgrades)

Exports only $70 million (6%), ¾ into Africa, then Europe

5 vendors = 40% of market (CA, IBM, MS, Softline, SAP)

Challenges: Fragmentation, lack QMS, poor marketing, low

incentives, small VC market, skills shortage

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Other technologies

Small hardware market, mainly assembly, some PCB manufacture

Core competencies in electronics – defence systems, avionics, metering, satellite broadcasting, telecomms

Telecomms – 1 FLO (SNO coming) 4.5m lines, 3 mobile 15m lines. Challenge: cost

Broadcasters: SABC, e-tv, Multichoice, good radio networks.

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Employment

Overall, approximately 140 000 (0.3%) >8 000 companies, mostly small 15 000 software developers, 1 000 co’s 85% of s/w co’s <50 employees, 50% <

10 employees Telkom is largest employer, shedding

jobs.

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Regulation

ICASA licences broadcasters & telecomms & other service providers

Many laws: Telecomms, Broadcasting, ECT, Interception & Monitoring, Public Access to Information, Convergence (Bill)

New challenge: Black Economic Empowerment (BEE)

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Initiatives

Skills: AIICT, JCSE, ISETT SETA (Learnerships), ISSA

Incubation: Innovation Hub, CSIR, CITI, DIT

Marketing: SAVANT/PSA, SAEEC Employment: NEDLAC Sector Summit Guidance: PIAC, PNC on ISAD, ICT

Roadmap, e-Africa Commission (NEPAD)

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