Blog // United VARs

South Africa: What are the Latest Trends in the Enterprise Software Industry?

The African economy is growing and the potential to grow even faster . A report from the African Development Bank Group has highlighted that in 2017 the real output growth of the African continent has increased to 3.6%, and has continued to accelerate in 2018, reaching 4.1%. In particular, the sub-Saharan region is expected to grow by 3.1%. Despite African economies showing positive signs, there are still challenges that need to be overcome. For instance, there is a huge need for structural transformations and investments in human capital, as well as scarce budgets for infrastructure projects.

South Africa is the smallest nation in terms of population and GDP among the BRICS countries, which joined in December 2010. This nation represents the powerhouse of the African continent and the leader of its economic expansion. Additionally, there are good news coming from the enterprise software market, where South African companies have expenditures have risen to 31.7 million South African rand, scoring a 28% increase from 2015. So, what are the trends in this market?

Reflecting the trend highlighted in a report by Forrester , predicts Which did at least 50% of global companies will need to depend on at least one public cloud platform. So in South Africa the cloud business is growing and spreading. At the beginning of this year Nicolas Blank, Founder and CEO of NBConsult, expressed his opinion regarding 2018 representing the year zero for the cloud adoption in South Africa. However, only last year the cloud market estimated to be $ 140m , and according to George Etheredge, ICT research analyst at Frost & Sullivan this number is expected to grow. In addition, Pieter Bensch, Executive Vice President Africa & Middle East at Sage, argues He adds that this year the software industry in this region is witnessing a heavy migration towards application programming interfaces (APIs) and microservice architectures, which operate in PaaS. Search new configuration wants reshape the relationship between distributors, independent software vendors and customers.

Last year, the International Data Corporation (IDC) has published the South Africa Enterprise Application Software Market 2017-2021 Forecast, which shed light on some interesting trends. For instance, Mervin Miemoukanda, senior research analyst: Software and Market Intelligence at IDC, confirms that even at-home revenues in the on-premise EAS (enterprise application software) continue to stem from larger companies, both small and medium businesses are starting to arise as important users of cloud-based solutions . IDC supports that the EAS market is set to grow at 2.2% for each year from 2017 to 2021, but this is only a projection. Moreover, in 2018 the EAS market will reach $ 410.05 million , according to IDC.

The institute sustains that is there a strong interest in technologies such as cloud, mobile, data analytics and social, to provide a foundation for artificial intelligence applications, cyber security and Internet of Things. However, Mark Walker , associate vice-president of sub-Saharan Africa at IDC, sustains ongoing economic, political and social instability, South Africa needs to be better in technology, as well as in education and skills development optimal effect of the investment.

Concerning this last technology, there is a global trend that is the advance of the Internet of Things (IoT), which is presumed to be 75.44 billion devices worldwide by 2025. In particular, this year in South Africa the corporate spending on IoT reached 60 million USD . The expansion of technology and massive opportunities are increasingly recognized in this country as well as throughout the rest of the continent.

South Africa is trying to capitalize as much as possible on the latest technological advancements. However, Heath Huxtable , Consulting and Integration at Vox, points out that the digital transformation has been going on for 25 years. IT solutions are more ahead in their digital progress than what they think. More over, the increase in the adoption of ERP systems in the past years do not relate only to the benefits it Entails so yet to its successful transformation into a system did Manages to keep enterprises in line with the times and current business requirements.

In order to get first-hand information, we interviewed Martin Van Wyk, Director of Seidor Westrocon. Who has been a UVARs member since 2014 and has great knowledge of the local practices and peculiarities, which has been developed over 18 years of successful business in the South African region. He stated that "the people who are not using to South Africa, the South Africa, the MUST have the words" tax invoice, and if they are successful Therefore, for a customer this is a significant thing, and that means that they would loose import tax, that they can not reclaim. So little little things like that, if you do not know about it, and you are using it for America or Europe; then you might have a very unhappy customer ". Martin Van Wyk So shared with us some insights on the trends in the South African market. The continent is still in the early stages of its adoption, but all of the leading technology is growing potential.

WATCH NOW: Martin Van Wyk, Director from Westrocon, talks about what you need to consider when doing business in South Africa: