Tech costs ‘likely to rise’ in SA

File: The looming hikes in IT goods have been attributed to the weak rand, South Africa’s ailing economy and possibly rising taxes. Photo: Death to the Stock Photo

JOHANNESBURG - Information technology (IT) hardware is likely to become more expensive in SA because of the weak economy and rand, according to Mark Walker, associate vice-president for sub-Saharan Africa at the International Data Corporation.

“SA is looking at a growth rate of 0.7% to 1.5% [in 2018]. Many organisations are pricing this weak economy into their discussions as it means that hardware and imported equipment will be more expensive.

“There are also murmurs around adding VAT to petrol and potential increases in taxes, so the technology sector could very well be an easy target from a tax point of view.”

As a result, IT was expected to become more expensive, particularly hardware, and this was likely to prompt “an acceleration into cloud-based computing”, Walker said.

Further, if the outcome of the ANC’s elective conference was not well received, the market would weaken further and this would further fuel the rise in IT costs.

READ: Ramaphosa election race lead gives rand a boost

Innovation and investment could be affected by the lacklustre economy, he said. “We have started seeing a trend emerge where you have individuals and organisations innovating locally, but then taking those ideas overseas because they are not able to unlock investment in the local market.”

However, a favourable elective conference outcome would be a boon for the local IT sector.

“The perception that SA is back on track could herald in a period of release of pent-up demand, investment spend on innovation and rolling out the infrastructure to enable broadband in rural areas, fibre and others that SA gravely needs.”

iNet Bridge

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