Despite South Africa’s inadequate infrastructure and relatively high bandwidth costs, Indian and Chinese information and communication technology (ICT) companies are showing an increased appetite to become involved and invest in the South African and African markets, Integr8 Group joint CEO Robert Sussman says.
Regulation of the sector has also been a challenge, but recent moves towards deregulation have seemingly increased the interest out of the two giant Asian eco-nomies.
has seen an outflow of IT skills to more developed markets, but these are now return- ing, Sussman avers, adding that the country has some of the highest-quality ICT skills available internationally.
The challenges have not had a completely negative effect on the sector. “Innovation coming out of South Africa can compete on a global level, as any ICT company in South Africa has had to deal with challenges from the beginning, such as a lack of infrastructure, a lack of broadband and a lack of connectivity,” he says.
The global economic crisis has also affected the South African ICT industry, primarily by limit- ing companies in terms of expend- iture and capital outlay. This has resulted in companies holding back on innovative projects, rather using capital to invest in ICT services to make the business run more efficiently. There has been a shift in industry towards renting assets, such as hardware, software, services and implementations, allowing companies to still carry out projects, but not have to provide a large amount of upfront capital.
Sussman adds that the eco-nomic crisis has also levelled the playing field in the sector, as a few larger IT companies, which did not have strong underlying business strategies with good annuities, did not survive.
Meanwhile, Integr8 launched a new service in 2009 to assist clients to carry out ICT projects and innovation roll-outs – its ICT asset rental service, which offers clients a complete roll-out of a project, such as software and hardware implementation and maintenance, rented to them over 36 months. After this period, the client has the option to buy, return, or have the asset updated.
“The pressure on the economy resulted in new products and ser-vices for Integr8 to provide and new opportunities for its clients. A lot that was positive came out of the adversity,” he says.
In addition, Integr8 has noticed a significant adoption of software as a service. Sussman predicts that companies will use a mixture, or hybrid, of on-site and off-site ICT services, depending on the type and size of a company. He also predicts the use of purely pay-per-use software and day-to-day commoditised services. Continued pressure on telecommunication providers to lower the cost of telephone calls should result in a rapid decrease in the cost of bandwidth. This is in line with the companies’ multitiered hosted platforms.
In the future, innovation is key for ICT companies, not only to keep ahead of but to keep up with competitors. Integr8 employees spend 70% of their time on daily activities, and 30% on researching innovations and new products and services. Sussman adds that any company that is serious about doing business looks towards using IT, technology and communication to operate more efficiently.
The current year will see an aggressive drive targeted not only at existing and new clients but also at the public sector. The company has refined its service delivery model to the private sector over the past nine years and has already secured substantial contracts in the public sector. Substantial growth from this strategy is already under way and a strategic focus in this area is being promoted.
The group also plans to con-tinue its drive into Africa, as well as branch out to Australia, Asia, the UK and the US. It will also focus on social upliftment in the regions it expands to and aims to train, develop and uplift local people and form alliances with local equity partners.
“This is probably one of the most exciting times to be in ICT, South Africa and Africa. We think that the opportunity, to not only focus on organic growth, but also acquisitive and strategic company growth, is so huge that we are going to spend most of our time focusing on new services and innovation for the South African and African market,” concludes Sussman.