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Salesforce touts $2bn ‘ecosystem benefit’ to SA

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New research by global market intelligence firm IDC suggests that CRM giant Salesforce and its ecosystem of partners and customers will create $2.1-billion in new business revenues and 5,240 new, direct jobs in South Africa by 2024.

Those jobs are in turn expected to create a further 6,900 indirect jobs due to opportunities and jobs created in the supply and distribution chains serving those Salesfrorce customers, and new employees spending money in the general economy. IDC estimates that for every dollar Salesforce made in South Africa in 2019, the ecosystem made $4.75. By 2024, that figure is predicted to be $7.03

“We expect South Africa’s digital economic growth and job creation to be strong across financial services, high tech, professional services, and telecommunications,” says Robin Fisher, senior area vice president for EMEA emerging markets at Salesforce. ”The COVID-19 pandemic is accelerating local uptake of cloud services as it enables companies to be agile, and save on capital expenditure, while also delivering great customer experiences and helping them bring new products to new markets rapidly.

“The growth and success of the Salesforce economy in South Africa provides new and existing businesses an opportunity to quickly and easily shift their skills to take advantage of cloud-based data and AI technology… We see many recent graduates as well as technology veterans building their skills through Salesforce’s Trailhead online learning platform, to prepare themselves for skills required in the digital economy.”

Salesforce is a global leader in enterprise cloud computing, as a pure cloud and CRM company that has advocated for the benefits of remote access to corporate data, via any channel, with reduced administration and cost. This model has now accelerated as a result of the Covid-19 pandemic.

According to IDC, cloud computing annual subscriptions in South Africa will grow 29% annually, from $370 million in 2018 to $1.7 billion in 2024. Spending on non-cloud software will decrease 4% annually over the same period.  IDC says the products and services provided by the Salesforce ecosystem in South Africa are dominated by professional services (64%) but also include add-on cloud subscriptions (17%), as well as on-premises software, hardware and networking (19%).

“According to IDC’s global forecast of today’s market for digital transformation-related technology, by 2024 nearly 50% of cloud software spending will be tied to digital transformation,” says Petra Jenner, general manager and senior vice president for Europe, Middle East, and Africa emerging markets at Salesforce. “Salesforce’s rapidly growing economic impact in South Africa – with $2.1 billion in revenue and 12 140 jobs by 2024 – shows that organisations and channel partners are delivering innovative digital business models to foster new levels of employee and customer experiences and business competitiveness.”

Because organisations that spend on cloud computing subscriptions also spend on ancillary products and services, in 2019 for every dollar Salesforce made in South Africa, the ecosystem made $4.75 and that figure will increase to $7.03 by 2024. In other words, the Salesforce ecosystem in South Africa in 2019 was 4.8 times larger than Salesforce itself. By 2024, it will be more than seven times as big.

IDC’s forecasts show a significant payback from investments in cloud computing out to 2024, the company says. But even by then, spending on public cloud computing in South Africa will be less than 11% of spending on total IT meaning there is massive growth opportunity.

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