Despite South Africa's current political, economic and societal
problems, the IT industry in general and the distribution channel in
particular have held up remarkably well. Although the growth of sales
revenues in the second quarter of 2023 was about 10% less than in Q2
2021, this fall was less precipitous than that experienced in Europe.
While cloud revenues have been declining steadily over the past two
years, those for the security software and services market in Q2 2023
outpaced revenue growth for the same period in 2021, according to the
latest CONTEXT market data.
South Africa is currently being buffeted by blackouts, social unrest,
political instability and rising unemployment. Yet, at a time when
businesses are tightening the purse strings, the IT industry continues
to perform relatively well thanks to digitalisation projects. Sales
through IT distributors generate higher revenues than those made
through corporate resellers or directly by vendors.
The cloud is at the front and centre of efforts to drive digital
transformation in South Africa and so has been the focus of much
discussion. Q2 2023 distributor revenues from this market were down on
the same period in 2022 and less than in Q2 2021. This fall may be the
result of recent changes in key vendors' cost models and a slump in
demand from SMBs battling to rein in spending.
However, security software and services are faring much better. Total
revenue from this category in Q2 2023 was around $12.2m; down -8.8%
from Q2 2022 but up by over 30% from the same period in 2021. As
security breaches continue to make the headlines, it seems local
businesses are keen to spend on products that will protect their
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