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South African IT Infrastructure Outsourcing MarketProduct Type: Market Research ReportPublished by: Frost & Sullivan Published: June 2007 Product Code: R1-5860 Description This Frost & Sullivan research service titled South African IT Infrastructure Outsourcing Market provides an analysis of the market, along with a description of current trends. The study examines market drivers and restraints for the next two to six years. An analysis of key competitors provides the reader with in-depth market information. In this research, Frost & Sullivan's expert analysts thoroughly examine the following market: IT infrastructure outsourcing services.Market Consolidation to Create Growth Opportunities in the SMME Sector Over the next five years, South Africa’s IT Infrastructure market is likely to witness significant changes with the introduction of new participants. Most significantly, these new entrants will be the Second National Operator (SNO) and this is expected to provide a good impetus for the reduction of bandwidth costs. In addition to this, the current lack of focus provided to the small, medium and micro enterprise (SMME) sector will result in the introduction of new service providers of a smaller size that are likely to be specialists in their chosen fields. These new participants are expected to make inroads into the market share currently enjoyed by bigger, more established service providers. "South Africa’s IT infrastructure outsourcing market is growing at a healthy rate, as the country enjoys sustained economic growth," notes the analyst of this research service. "Within the next five years, the market is likely to experience a high degree of consolidation." There is already evidence of a telecommunications and IT services company wanting to consolidate. This follows a trend whereby sizeable market participants have begun to increase their services and areas of expertise through targeted and strategic acquisitions of ‘Best of Breed’ service providers. Introduction of the SNO to Have Profound Effect on Bandwidth Costs Currently, there are two significant challenges facing the market. The first of these is the country’s shortage of skills which is reaching chronic proportions and while this boosts outsourcing, service providers themselves are experiencing challenges regarding the attraction and retention of skilled staff. The second challenge is related to the high cost of bandwidth resulting from a lack of competition for the country’s national operator. "Thus, service providers are compelled to increase their prices due to expensive bandwidth, which is also crucial for their ability to retain skilled personnel," explains the analyst. "However, in the future, service providers can look forward to the introduction of the services of the SNO, which will assist in reducing bandwidth costs." Moreover, service providers would do well to demonstrate higher levels of commitment to skills development in order to employ and retain skilled personnel. Overall, the market is projected to demonstrate healthy growth. However, there is need to focus on the requirements of the SMME sector in order to capitalise effectively on the opportunities presented by this market. Table of Contents
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