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IT spend the catalyst for a post-COVID economic revival says Pinnacle boss

By , Portals editor
Africa , South Africa , 23 Feb 2022
Pinnacle ICT CEO Tim Humphreys-Davies.
Pinnacle ICT CEO Tim Humphreys-Davies.

Despite the havoc caused by COVID-19 in markets, interest and investment in IT has not waned –according to Gartner overall IT spend between pre-COVID 2019 and 2021, which represents nearly a US$10-trillion in IT spend overall, there has been 15% growth in end user devices (from US$1.4-trillion to US$1.6-trillion), and 16% growth in IT services, with 38% growth in enterprise software (from US$650-billion to US$900-billion) fuelled by increased investment in IT security solutions.

This according to Tim Humphreys-Davies, CEO of ICT and telecommunications distribution powerhouse Pinnacle, who opened the company’s vendor and reseller focused TechScape 2022 event, hosted this week in the Drakensberg.

“IT spend has shifted,” said Humphreys-Davies, “What is interesting about 2020 … we were locked down end of March, we were pretty much dead as a doornail for a few months, economically wise, and yet 2020 was marginally bigger than 2019. That just shows how IT was a big focus area, funds was diverted or spend was diverted from travel or whatever into IT as people realised it was an important fabric of trying to do business.”

He added that software vendors within the cybersecurity space “are jumping up and down with joy” because that’s really where the spend is coming from.

But the sale of end-user devices has also contributed significantly to growth. According to Humphreys-Davies, in 2019 calendar year Pinnacle sold 371 000 devices and in 2020 the company secured one or two major deals including the Dell deal in April, but only really gained traction in August and September.

However in the most recent calendar year, the company recorded sales of 800 000 devices in twelve months – not sell in, but sell out to resellers.

This was a major opportunity, but will continue to represent an opportunity going forward, the Pinnacle boss stated.

Based on IDC figures, there was 1.5-million sales in four quarters in 2019, which dipped to 1.3 million, then in 2021, to 2.1 million. There was a massive selling in Q4 as supplies gains normalised in certain sectors, mainly in retail with one or two vendors. “So there’s a huge amount of devices in the South African market now that presents an enormous opportunity for all of us.”

Humphreys-Davies pointed to share price Index, which at pre-COVID levels was 60 000 points among listed entities, which dipped to in H1 calendar in 2020 down at 37 000 (reflective of the confidence in the economy at that stage), which then climbed to 73 000 points.

This shows 28% share price growth and an indication that the broader financial market is aware of the potential in- and importance of technology said Pinnacle’s CEO.

He added that the distributor is focusing more intensely on cloud and the ongoing integration of Artificial Intelligence, and application within key verticals, including education and healthcare.

Humphreys-Davies also emphasised the opportunity that awaits channel operators in tapping into the so-called ‘green Dollar’, the realisation and development of green/ environmentally conscious technology systems.

While he acknowledged the company was a “little late” in pursuing opportunities within the cyber security realm, he added that Pinnacle has now cemented its position and is generating solid business – together with vendor and reseller partners – within this space.

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