Cloud Money

South African Cloud Market to Reach $230 Million in 2014: Report

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South Africa’s cloud services market is expected to reach nearly $230 million in 2014, according to a report by International Data Corporation. The report, titled “South Africa Cloud, Hosted, Managed and Outsourced Services Market 2012 Analysis and 2013-2017 Forecast” shows a rapidly developing IT and network services market racing to become a continental leader.

Outsourced, managed, and hosted services are expected to grow by 10.9 percent from 2013 to $2.8 billion in 2014 in South Africa, according to the report.

Growth in cloud services will be focused on public cloud SaaS spending, with public clouds accounting for 65 percent of overall cloud spending.  Private cloud spending is also expected to increase in 2014.

“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,” Lise Hagen, software and IT services manager at IDC South Africa said. “End-user organizations 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.”

The local providers include telecom operators, and ITWebAfrica said their evolving role will be critical to local data center and cloud growth. Another local player is Dimension Data, which recently acquired subsidiaries of NextiraOne, and provides services globally.

South Africa currently boasts the continent’s highest rate of cloud adoption, however a report published by Cisco and World Wide Worx in 2013 suggests that Nigeria may be about to overtake it, and Kenya is not far behind.

A Parallels report released in December pointed to the growth of SaaS in emerging markets including Africa, and a United Nations report on cloud adoption late in 2013 predicted SaaS will dominate the cloud market in emerging economies.

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