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SA cloud market forecast to top $229.69 million

By , IT in government editor
South Africa , 04 Mar 2014

SA cloud market forecast to top $229.69 million

South Africa's cloud services market value is expected to grow to $229.69 million in 2014, according to an International Data Corporation's research report.

The IDC's report titled 'South Africa Cloud, Hosted, Managed, and Outsourced Services Market 2012 Analysis and 2013–2017 Forecast' found that the value of the country's cloud services market would continue to grow with a focus on public cloud software as a service (SaaS) spending.

According to the report the value of the likes of outsourced, managed services, and hosted services market in the country would increase by 10.9% year on year in 2014 to $2.8 billion.

Public cloud services would account for the majority (65%) of overall cloud spending, and the IDC expects the market to see an increase in spending on private cloud services in 2014 and beyond, the report revealed.

Lise Hagen, software and IT services manager at IDC South Africa, explained that the country’s evolving role of telecom operators would continue to be a critical factor in the local growth of data centre and cloud services.

"The South African IT market will continue to shift from IS outsourcing to managed and datacentre services as budgets remain under pressure and projects become smaller and more specific," said Hagen.

"End-user organisations will look to cost-effective IT delivery solutions such as cloud computing to help stay within budget.

“The cloud market in South Africa is expanding, with a number of international and new local providers entering the market, and it is maturing fast due to increasing competition with established vendors," Hagen added.

However, despite leading the continent in the uptake of cloud computing services a report compiled by Cisco and research firm World Wide Worx last year revealed that South Africa would be dramatically overtaken by West African nation, Nigeria.

The research study titled 'Cloud in Africa: Reality Check 2013' stated that cloud computing uptake would explode in major African economies, as businesses gain confidence in both the security and reliability of the cloud.

It was revealed that 44% of Nigerian businesses are expected to embrace cloud in 2014, which would bring the total in that country to 80% by year end.

According to the report, 36% of businesses in Nigeria were using cloud services last year, 50% South African medium and large businesses were using cloud services; while 48% were using the cloud in Kenya.

"Cloud computing is the next big step in the evolution of computing and the internet," said David Meads, Cisco’s vice president for Africa.

"The broadband revolution sweeping Africa and the continent's reputation for innovation add up to tremendous appetite for services that will drive this evolution. Looking ahead, the Internet of Everything represents the largest online trend today.

Meads concluded, “As more people, things and devices connect to the internet in Africa, more data from more places will be introduced across corporate and service provider networks, which will open up new opportunities and increased demand for the cloud."

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