While power outages and load-shedding are negatively impacting the economy at large, they also bring unique opportunities for the ICT sector. This is the view of market commentators Roy Blume, IT research manager for BMI-TechKnowledge, and Chris Hart, chief economist for Investment Solutions.
According to Blume, Eskom's inability to ensure a stable electricity supply is not only driving the uptake of 3G and wireless technologies, but is making itself felt in the business environment.
"Virtualisation is becoming more key to business and will be driven by concerns over a secure power supply," he says. Blume predicts the uptake of virtualisation will be felt in 2008, making it a top trend to focus on.
Eskom's unreliability could also, in Blume's opinion, lead to more outsourcing and a subsequent boom in business process outsourcing (BPO) and call centres.
However, BPO centres will have to make sure clients know they have fail-safes in place for when power outages do occur.
"You can't become the off-shore BPO and call centre destination of choice if you have no confidence and power."
Counting the losses
Hart says the economic impact of the power outages is still hard to predict, but is estimated to have already cost the country R1.7 trillion.
He explains that the combination of a huge current account deficit, weak rand, high interest rates, a slower economy, political uncertainty, and power supply problems all feed into a negative cycle that could see some sections of the economy - like vehicle sales - enter a recession.
However, he adds that all economies have ups and downs as part of their natural cycles and predicts that SA could come out of the current downturn as early as year-end.
In the meantime, he says government needs to change its thinking if it wants to address the situation that has been aggravated by the power outages.
"One of the ways to fight inflation is to add competition," says Hart, explaining that the oligopoly in the telecommunications market will have to come to an end.
"When free markets want to create employment they move away from monopolies [such as the one currently experienced in SA's telecommunications market]," he says.
In closing, Blume says IT has become more than a "nice to have", but rather an essential business tool for most companies, which means that not even Eskom will be able to take away big business' spend on ICT.
"Construction and 2010 projects will continue despite load-shedding," he explains, adding that this is where a lot of potential for growth in the IT market lies.
* Hart and Blume spoke at ITWeb's IT Confidence event earlier this week.
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