Barring further merger and acquisition activity, Business Connexion (BCX) is likely to retain its dominance in the local IT services market, says BMI-TechKnowledge senior analyst Natalie Bryden.
She sees the company retaining its own branding and identity post merger, as it has a respectable image in the marketplace.
Telkom`s bid for BCX is at Competition Commission stage, which recently invited objections to the bid.
Bryden says a merger among the top 10 companies is not likely in the near future. A more likely scenario is a top 10 company swallowing up a smaller IT services firm. However, Bryden says consolidation in the industry would be a requirement, as the market is not large enough to support all the IT service providers. Last year saw Dimension Data absorb Internet Solutions, a move that may place them second in next year`s list, she says.
Largest player
The market analyst company`s recently released report, "South African IT Market Sizing and Forecast Report 2005 to 2010", shows BCX is the largest player, with 12.2% of the market. It is followed by GijimaAst at 7.7% and arivia.kom at 7.5%.
BMI-T estimates the IT market to be valued at R45.8 billion. With steady expansion to 2010 and an anticipated compound annual growth rate of 5.8%, the market is estimated to be worth R60.8 billion in 2010.
IT services represents 39.8% of the total IT marketplace, with outsourcing the largest segment of IT services (41.4%), followed by deploy and support (25.4%) and systems integration (18.9%).
Included in the list of top 10 IT services companies are firms such as Dimension Data, Bytes Technology Group, IBM and CSC.
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