South African IT Infrastructure Outsourcing End User Survey: Industry Report

South African IT Infrastructure Outsourcing End User Survey

Product Type: Market Research Report
Published by: Frost & Sullivan
Published: August 2007
Product Code: R1-6011

Description

Research Overview

The Frost & Sullivan research service titled South Africa IT Infrastructure Outsourcing Market End User Survey provides an overview of the IT infrastructure outsourcing market in South Africa. The study examines market drivers and restraints and details the expected trends for the next two to six years. An analysis of key competitors provides the reader with in-depth market information.

Market Overview

Entry of New Participants likely to Reduce Infrastructure Costs

The imminent entry of new market participants is likely to bring about a sea change in South Africa’s IT infrastructure outsourcing market in the next five years. Most significant of these will be the Second National Operator (SNO), which should provide a good impetus for the reduction of bandwidth costs. Furthermore, the burgeoning growth of the small, medium and micro enterprises (SMME) sector is also expected to attract smaller new service providers that are likely to be specialists in their chosen fields. These newer participants are anticipated to start making inroads into the market share enjoyed by larger, more established service providers.

Notwithstanding these positive trends, the South African IT infrastructure outsourcing market is being severely restrained by skill shortages and high bandwidth costs. "Skill shortage is nearing chronic proportions and while this encourages outsourcing, services providers themselves are finding it hard to attract and retain qualified staff," notes the analyst of this research service. "Poor adherence by service providers to the provisions of Service Level Agreements (SLAs) and an overall lack of focus by service providers on the SMME sector are some of the other restraints for the market."

Network Management remains the Most Utilized Service

Survey results indicate network management to be the most utilized service and the one that most respondents first consider outsourcing. The importance of network management was reinforced when it became clear that those respondents that had just started outsourcing had this service in their portfolio. Disaster recovery is easily the most critical outsourced service and 45 per cent of the respondents have outsourced the service for more than five years and another 41 per cent between three and five years. Nevertheless, there are still many companies that prefer not to outsource this service as they are reluctant to allow a perceived loss of control over mission critical processes.

With regard to service provider selection criteria, respondents often mentioned that one should not only look at the price but at the total cost of ownership. Price, as a factor of consideration, has varying levels of importance across companies and small organizations in particular consider it as a critical criterion when choosing a potential service provider. Nevertheless, the majority of respondents still held price to be an important criterion along with reputation. Most respondents also regard the issue of black economic empowerment (BEE) status as a significant criterion when selecting a service provider.

"Although it was mentioned that multi-sourcing still needs some time to mature as a concept, majority of the companies are willing to engage in this type of service acquisition," says the analyst. "This is an emerging trend as most respondents remarked that they regarded the importance of Best of Breed outsourcing as a significant part of their outsourcing strategies."

Table of Contents

1. South African IT Infrastructure Outsourcing End User Market: 1. Introduction and Market Overview; 1. Introduction; 2. Executive Summary; 3. Research Methodology and Objectives; 4. Service Definitions; 5. Market Drivers and Restraints; 6. Market Analysis; 7. Market Forecast Overview
2. Survey Questions: 1. Respondents Overview; 2. IT Outsourcing Strategy; 3. Extent of Outsourced Services; 4. Service Level Agreements (SLAs); 5. Future Strategies
List of Figures
Chapter 2: IT Infrastructure Outsourcing Market: Size of the Organisation (South Africa), 2007; IT Infrastructure Outsourcing Market: Manner of Acquiring Services (South Africa), 2007; IT Infrastructure Outsourcing Market: Initiation of Services (South Africa), 2007; IT Infrastructure Outsourcing Market: Co-Location as Outsourced Service (South Africa), 2007; IT Infrastructure Outsourcing Market: Dedicated Hosting as Outsourced Service (South Africa), 2007; IT Infrastructure Outsourcing Market: Storage as Outsourced Service (South Africa), 2007; IT Infrastructure Outsourcing Market: Network Management as Outsourced Service (South Africa), 2007; IT Infrastructure Outsourcing Market: Disaster Recovery as Outsourced Service (South Africa), 2007; IT Infrastructure Outsourcing Market: Other Outsourced Services (South Africa), 2007; IT Infrastructure Outsourcing Market: Multiple Service Providers (South Africa), 2007; IT Infrastructure Outsourcing Market: Tendency towards Multi-sourcing (South Africa), 2007; IT Infrastructure Outsourcing Market: Perceived Cost Savings (South Africa), 2007; IT Infrastructure Outsourcing Market: Willingness to Outsource of Mission-Critical Business Functions (South Africa), 2007; IT Infrastructure Outsourcing Market: Split of Various Services in Percent (South Africa), 2007; IT Infrastructure Outsourcing Market: Frequency of Service Payments (South Africa), 2007; IT Infrastructure Outsourcing Market: Extraordinary Provisions in SLA (South Africa), 2007; IT Infrastructure Outsourcing Market: Amendment of SLA Provisions (South Africa), 2007; IT Infrastructure Outsourcing Market: Likelihood of Offshore Outsourcing (South Africa), 2007; IT Infrastructure Outsourcing Market: Future Requirements (South Africa), 2007
Chapter 4: IT Infrastructure Outsourcing Market: Satisfaction with Customer Service Level (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Flexibility (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Flexibility of the SLA (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Technical Innovation (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Personnel Quality (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Ability to Address Specific Needs (South Africa), 2007; IT Infrastructure Outsourcing Market: Satisfaction with Response Time (South Africa), 2007; IT Infrastructure Outsourcing Market: Monitoring of Customer Satisfaction by Service Provider (South Africa), 2007
Chapter 5: IT Infrastructure Outsourcing Market: Importance of Price (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Reputation (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of BEE (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Social Responsibility (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Reliability (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Effective Implementation (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Local Presence (South Africa), 2007; IT Infrastructure Outsourcing Market: Importance of Global Presence (South Africa), 2007
Chapter 6: IT Infrastructure Outsourcing Market: Customer Perception Rating of Dimension Data (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of EDS (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of Business Connexion (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of Arivia.kom (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of T-Systems (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of M-IT Services (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of Unisys (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of HP (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of IBM (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of Faritec (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of GijimaAST (South Africa), 2007; IT Infrastructure Outsourcing Market: Customer Perception Rating of Bytes Technology Group (South Africa), 2007

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