No IT spending slowdown from Government
While there have definitely been signs of a slowdown in demand from certain sectors in the South African economy, Dimension Data South Africa is not seeing any slowdown in government spending on IT products and services, Didata SA MD Jason Goodall said on Tuesday.
Speaking to I-Net Bridge ahead of the Dimension Data international data perspectives conference, Goodall said that government is still aggressively continuing with its infrastructure plans.
"We haven’t seen any slowdown in government spending. There are challenges around, in that sometimes government spending takes longer to come to the market. But from an intent point of view, there is no intention from government to reduce any of its spending," he said.
He added that some of the projects relate to the 2010 World Cup and others relate to municipalities trying to get into the infrastructure space.
He said that the company has seen a slowdown in certain sectors of the market – financial services and those sectors allied to that, manufacturing industries, motor manufacturers and the resources sector, with the price of resources coming under pressure from the recent global turmoil.
"There is definitely a slowdown, however what has become more noticeable now that wasn’t the case a few years ago is that IT is not the discretionary spend it used to be, and it is not as easy to turn off the tap as it used to be because it is so integrated into the way companies operate," he said.
While companies may be questioning any new projects, their existing infrastructure needs continue to be ongoing. There are certain parts of IT spend companies are trying to reduce, but it is not so easy for them to do, he noted.
"So it’s a bit of tale of two cities. In certain aspects there is a slight slowdown, but from an infrastructure point of view and government, we are not seeing a slowdown in that part of the market," he concluded.
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