SA hardware market: 2010 predictions
During a recent Gartner Symposium, analysts discussed the computer hardware market moving into 2010. According to Gartner, overall IT spending worldwide is on pace to decline by 5.2% over 2009. The hardware segment has struggled the most, with a predicted decrease of 16.5% in spending in 2009.
South African hardware distributors have felt the effects of this global economic crisis in 2009 and appear to be coming to grips with a changing marketplace for 2010 and looking for future growth areas in the forthcoming year.
Challenges
According to Anamika Budree, Business Unit Manager for HP Personal Systems Group at Drive Control Corporation, the global crisis has made companies and consumers more cautious: “The hardware industry in South Africa has entered a highly challenging period of shrinking revenue brought on by the global financial crisis. It’s a period characterised by cautious customer behaviour,” said Budree.
“The industry has also been hit by material shortages, reduction in brand loyalty, the introduction of cheaper products, and increasing customer demand for smaller, faster, and better technology,” continued Budree.
“Further exacerbating the situation, an increasing number of customers are extending their IT replacement cycle, stretching their product lifecycle to the maximum. Vendors need to take this into consideration as their products are replaced and upgraded far more
frequently than the end-user market trend,” said Budree.
Matthew Greenway, Managing Director of Cyberdyne Systems, also acknowledges this new challenging environment that local hardware distributors find themselves in. “This business is really all about the survival of the fittest – with even the very largest of distributors not being immune to failure. Unless the smaller distributors are well financed, I can see these players merging into larger organizations or falling by the wayside,” added Greenway.
Predictions
Going in to 2010 Greenway predicts that the hardware distribution market will see a few shake-ups: “I believe that the South African computer hardware market is going to see further consolidation of distributors in the coming years – especially after the Global Economic Recession has finished ‘cleaning’ the market up,” said Greenway.
But it’s not all about consolidation and cost cutting, according to Greenway next year should see an increased move towards mobile devices which could mean this particular area will see an upswing.
“The hardware market in 2010 will continue its move away from desktop equipment to mobile devices. The release of Microsoft Windows 7 is going to drive the refresh cycle of many South African corporations to move from aging 32-bit infrastructure to 64-bit product,”
Greenway continued.
Budree also sees recovery on the horizon with the consumer market becoming increasingly significant in the forthcoming year. “Retail and home users amount to 50% of IT spend and are a growing market. South African consumers are increasingly tech-savvy and this is a space to watch. The demand for ‘green’ and energy efficient products will increase,” said Budree.
The good news is that according to Greenway the market will recover although the landscape may look a little different to the boom of yesteryear.
“The economy will recover – it is not a question of ‘if,’ but rather ‘when,’ and this will usher in new distributors that will alter the ‘status quo’ [that has existed] in the local market over the past ten years,” Greenway said.
SA Hardware predictions – discussion
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