COUNTRY FOCUS : SOUTH AFRICA
The software sector is still hampered by piracy , and it is estimated by the Business Software Alliance , that around 35 % of installed software in South Africa is illegal .
South Africa understands the need for smart cities and the benefits of relating to country-wide improvements . Quality of life expectations and implementation of best practices across different industries is a fervent goal that pushes for private and public sector cooperation .
Several challenges still stand in the way of smart cities becoming a reality in South Africa – an underdeveloped infrastructure , skills deficit , and need for local and international investment for example . This is a particularly vexing hindrance to the advancement of smart cities nationally , requiring well-trained , tech-savvy individuals who understand and can use IT systems .
Cloud adoption
The improvements in datacentre infrastructure have resulted in a boost to cloud computing . It is estimated that around 60 % of large South African companies have implemented some form of cloud computing . With the increase of cloud computing local firms including telecommunication firms are offering datacentre services . These include MTN , Vodacom , Neotel and BCX . Huawei , AWS , Microsoft , Oracle have datacentres and are positioning themselves to be regional hubs .
This is the result of close collaboration with South African firm Gijima and Vodacom and is designed to support cloud adoption and customer demand across the continent . This again demonstrates the willingness of foreign companies to invest in this market and use the local skills force to penetrate the market and the region .
Amazon Web Services , has also opened a datacentre in Cape Town . Cisco and Dell both have training academies within South Africa to assist with the development of skilled labour within this sector .
E-commerce and related software are showing growth with South African online stores showing the number of online shoppers significantly increased year-on-year . Retail sales increased by 66 % in 2020 , this can be attributed to the pandemic and lockdown rules but has introduced online shopping to many first-time shoppers .
Vertical markets
A big spender in this sector is the banking and financial institutions . As more people join the formal markets this industry is expected to grow in the next ten years . The retail banks are increasing their spending to grow their digital platforms and concurrently increasing their online security measures . This will drive innovation in Internet banking and more specifically mobile access and mobile money solutions .
Private consumption will rise , but the strong growth of smartphones is likely to offset PC and laptop usage . In the short term , the decreasing household purchasing power and the depreciated Rand could also be responsible for tablets outselling notebooks , a less expensive piece of hardware and both outselling PCs .
Leading global vendors such as Microsoft are elevating South Africa into the lead group of countries for new product releases reflecting the growing importance of the market and the region . With IBM ’ s Cloud Data Centre , they can provide clients with a complete portfolio of cloud services .
Households affected by the economic downturn will look for cheaper options . It is a strongly regionalised market , due to a lack of inter-city connectivity and infrastructure in parts of the country , rural areas and it is very price sensitive . However , improvements to network infrastructure and adoption of cloud services and smart infrastructure will see this change .
In the short to medium term , there is a trend towards greater innovation in applications used for HR , payroll , and teleworking software to increase operational efficiencies and flexibility as more people work from home . his might encourage more firms to look at how to decrease capital expenditure and include remote and teleworking strategies to be included in their digital policies .
Source : International Trade Administration , US Department of Commerce p
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