It’s never an easy task, and nowadays, takes a lot of courage to try and predict what lies ahead in a new year.
In 2016, for example, who could have predicted Brexit? Donald Trump winning the US presidency? And the possible effects these events could have in the future.
But the South African channel, as we all know, is brimming with sturdy characters who have never shied away from giving their honest opinions, so we’ve asked some of the top channel players to give us their views on how they think the next year will pan out for both the IT industry and, more specifically, the local channel.
What are the challenges we will have to overcome? What major trends will come to the fore? And is the channel destined to change as we know it to better meet the requirements of an ever-evolving industry and customer needs?
By Kathy Gibson
2017 is set to be another hard year for the South African IT industry – there will be growth, but it will take hard work and plenty of innovation to achieve it.
Mark Walker, associate vice-president: sub-Saharan Africa, IDC Middle East, Africa and Turkey, points to South Africa’s continuing bad GDP figures, with just 1% predicted for 2017.
The poor growth has a knock-on effect throughout the economy, with unemployment set to rise even more and the Gini Co-efficient expected to grow.
Along with bad GDP growth, inflation is predicted to rise above 6%, while the exchange rate is expected to continue unfavourable.
All if these have an impact on the price of technology, Walker says, and low levels of business confidence will hold organisations back from spending.
“There won’t be massive growth next year,” he says. “We will see growth in new technologies, or technology that supports new business models, but the rest is going to be hard work and level pegging.”
The overall ICT market, including telecommunications, is expected to record growth of about 5%. Walker thinks spending should start to pick up towards the end of 2017.
Telecommunications will see about 2,4% growth, says George Kalebaila, senior research manager: telecoms at IDC South Africa, largely because the South African telecoms environment is relatively mature.
The main growth will be from data, both fixed and mobile, he says, with enterprise business helping to keep the growth steady.
Services has been one of the net beneficiaries of hardware and software declines, and the South African IT services space did quite well this year, says Jon Tullett, research manager: IT services, Africa at IDC.
Organisations are looking to invest in data centre infrastructure and operations, security and enterprise software, followed by mobile and client computing, and application development.
The IT areas that will be impacted by these projects are most likely to be strategy and governance, vendor management, enterprise architecture, and service management.
Cloud computing continues to be a hot topic around the world, but South Africa is still lagging behind western markets, Tullett says.
However, IDC expects to see at least one major cloud provider establish a local data centre in 2017. “This will address key concerns and spur competition and adoption while putting pressure on local providers,” he says.
IDC suggests that companies invest in private cloud but develop capabilities to transition workloads into the public cloud as circumstance change.
They are advised to reassess application capabilities with a view to cloud capabilities like orchestration, APIs, security and telemetry; invest in cloud skills; and revalue contracts with software vendors.
Another fast-growing area is Internet of Things (IoT), and Kalebaila believes we will see some major changes in this area.
Until now most of the IoT application have been cellular-based and mainly the domain of traditional mobile operators, he says. However, in 2017 we will start seeing a number of smaller non-mobile operators deploy low-power wide area network (LPWAN) IoT networks to provide low-cost IoT applications.
IDC expects that most of these implementations will be based on LoRA rather than SigFox, while NB-IoT will remain the preserve of mobile operators.
“Post 2017 we expect to see acceleration of IoT deployments in other African countries using similar business models to what we develop in South Africa,” Kalebaila says.
Looking forward, IDC predicts that IoT will no longer be the preserve of mobile operators, LPWAN networks will lower the barrier to entry, lower the cost of connectivity, and see rapid growth in connected devices.
In 2017 the developer community will start taking more interest in developing localised IoT solutions that will start finding a rout to market and driving IoT adoption.
IDC recommends that organisations start investing in developing localised vertical applications.
Kalebaila says the key verticals that can benefit from localised low-cost solutions will be public sector, financial services, health and agriculture.
It is important for organisations to incorporate analytics as part of the IoT value proposition to enable delivery of more business value and enable quicker decision making.
“And expose your IoT platforms to the developer community to harness the creative and innovation potential of developer community in developing localised solutions,” he says.
Mobility is rapidly becoming one of the key driver of digital transformation as customer engagement and transactions move to digital platforms, Kalebaila adds.
Choose y our own device (CYOD) has become the de facto device policy of more enterprises to reduce the cost of mobilising the workforce.
Financial services will continue to lead adoption of mobility solutions mainly due to the inherent benefits and cost savings from the reduction in branch footprint and improving customer experience, he says.
Meanwhile, securing data and data recover as become more important the securing devices as data becomes the new capital.
IDC predicts that the number of mobile enterprise apps will almost double as the shift from devices to mobile apps accelerates in 2017. The researcher believes that NFC will start pushing mobile payments to the fore but will still remain on the periphery and niche.
It also expects that, in 2017, 5G curiosity and hype form mobile operators and vendors over standards and use-case potential will push 5G on to enterprise executive discussions.
Organisations should plan for mobile apps as a natural part of all workflows, Kalebaila advises. The focus here should move to mobile app development platform as a critical tool to enable mobile app development.
He recommends that companies integrate security across the mobile app development lifecycle; and start to develop intermediate understanding of 5G elements and what it means in a commercial setting.
No discussion of digital transformation can be complete without analytics, big data and cognitive computing, concepts that are going to revolutionise the business world, says Tullett.
He believes 2016 was a breakout year for machine learning and AI, and there is more rapid growth expected in BI, analytics and many related fields.
However, the same has not been true in South Africa, where there has been limited uptake except in isolated projects.
Looking forward, IDC expects to see huge investments in big data – in gathering data, processing data, hiring data scientists and more. Specific use cases include security like fraud detection.
Behavioural analytics and prediction will become mainstream in 2017, directly driving product development, Tullett adds.
He believes that when machine learning does arrive in South Africa it will do so rapidly, with mature, proven technologies that will be ready to deploy.
“Be ready to take advantage of it by aligning projects,” Tullett advises. “Continue to invest in analytics and data processing capability; measure everything; and ensure data is robust and accessible to development.”
The biggest stumbling block to the uptake of new technologies is still security, Tullett adds. “2016 was a very tough year. There were massive data leaks, ransomware is now prevalent, and we saw the emergence of IoT malware.
“2017 is expected to be worse in every aspect of information security.”
IDC warns that South African businesses should expect continued exposure to major cyber-criminal syndicates, both directly and indirectly.
Tullett believes that 2017 will see at least one high-profile public breach in South Africa. This is likely to be a data leak with the public sector but malware and ransomware in retail in healthcare is also possible.
However, he thinks that South Africa could contribute several new technologies to thwart attacks, particularly in IoT applications. “We have some of the best defensive technologies in the world coming out of South Africa.”
Organisations are advises to refocus on risk management and defence in-depth rather than opting for isolated solutions. This should be complemented with investment in the internal security culture, including training, soft skills, testing and penetration testing.
They should also expose telemetry data to the security team, building constructive relationships between security teams and developers, users and executives.
Importantly, they should plan for failure, mapping business processes to kill chains, building and testing mitigation and recovery procedures, reviewing and amending incident response capabilities as necessary.