Cloud services boom in South Africa

Randburg-based research firm BMIT has released its latest SA IT Services Market report, revealing that the South African IT services market’s estimated close for 2024 is R104.9 billion.
Its value is expected to grow to around R182 billion by 2028, representing a compound annual growth rate of 14.8%.
Demand for cloud services will primarily drive its growth projection over the next three years and has been the primary driver behind its growth over the past two years.
BMIT managing director Chris Geerdts says cloud-driven digital transformation projects support the cloud’s continued dominance, adding that these initiatives “are reshaping the IT landscape”.
He also sees application development as a critical industry for meeting the needs of businesses in the modern age. Geerdts believes generative artificial intelligence (AI) will also grow significantly in the coming years.
According to Geerdts, generative AI’s potential to revolutionise content creation, customer services, and other business functions will further drive the consumption of cloud services.
BMIT’s research shows that many businesses in the country are already looking to adopt hyper-automation technology to improve efficiency and streamline business functions.
Other IT market services, such as cloud enablement and managed services, managed hosting, custom application development, and IS consulting, are expected to see moderate growth until the end of 2028.
Geerdts explains that now, more than ever, resilient cyber security services are crucial to mitigating cyber attacks, which he notes are growing in frequency, intensity, and sophistication.
BMIT’s report also came with a warning.
“Despite the positive growth outlook, organisations in South Africa face budget constraints, necessitating cost-effective IT solutions,” said Geerdts.
He added that this creates an opportunity for service providers to think smart “by adopting a value co-creator role, partnering with businesses to optimise IT investments and drive sustainable growth, rapidly being enhanced with generative AI capability”.
The chart below, courtesy of BMIT’s latest IT Services Market Report, shows historical and projected IT services market spending between 2023 and 2028.
