A Look at IT Outsourcing in South Africa

IT outsourcing in South Africa is rapidly growing as businesses increasingly rely on external expertise to streamline operations and enhance technological capabilities. South Africa has become a popular destination for IT outsourcing because of its skilled workforce, favorable time zones, and cost-effective solutions. As the demand for cloud computing, cybersecurity, and software development services continues to rise, the country’s IT outsourcing market is projected to reach $2.4 billion by 2025. This growing sector offers significant opportunities for both service providers and businesses looking to optimize their IT functions.

South Africa as an Economy

South Africa’s economy is diverse and has a rich history. Starting from, the late 19th century, when the discovery of diamonds and gold brought in a lot of foreign investment. After World War II, the country grew its manufacturing industry. However, the economic growth has been uneven due to challenges like trade sanctions and reduced investments during apartheid.

The country relies mainly on private businesses. The government also involved in areas like electricity and transportation. Important industries include mining, manufacturing, and agriculture, with mining being key. This is mostly because of the country’s gold, platinum, and chromium reserves. Its economic policies focus on growth, privatization, and reducing inequalities through programs like Black Economic Empowerment (BEE). Additionally, tourism is also plays an important role for this economy. It has multiple tourist attractions like natural parks and historical sites.¹

The economy of South Africa at a glance

	Gross Domestic Product
Annual GDP		USD 381 Billion (2023)
GDP Per Capita		USD 6,023 (2023)
Income Category		Upper Middle-Income (2025)
	People
Population		64.5 Million (2025)
Literacy Rate		87% (2017)
EF English Proficiency Index		High Proficiency (2024)
	IT Sector
IT Services Market Size		USD 6.5 Billion (2025)
IT Outsourcing Market Size		USD 2.4 Billion (2025)
Registered Software Companies		13,000+ (2019)
	Business Environment
Ease of Doing Business		Score: 67 | Rank: 84 (2020)
Political Stability Indicator		Percentile Rank: 21 (2023)
Corruption Perceptions Index		Score: 41/100 | Rank: 83/180 (2023)

IT Services Market in South Africa

The IT services market in South Africa is expected to grow significantly. In addition, its revenue is projected to reach $6.51 billion by 2025. IT outsourcing will lead the market, valued at $2.4 billion that year. From 2025 to 2029, the market is projected to grow by 4.76% annually, reaching $7.84 billion by 2029. This shows South Africa’s potential for growth in the IT sector. In 2025, businesses in the country are expected to spend $257.2 per employee on IT services to stay competitive.

South African businesses are becoming more tech-savvy. As a result, they are seeking advanced IT services to improve efficiency, reduce costs, and stay competitive. There is also increasing demand for cybersecurity as businesses become more aware of the risks from cyberattacks.

Companies are turning to cloud-based solutions for their flexibility and cost-effectiveness. Another growing trend is the use of big data analytics to gain insights from the data they collect. Businesses are also focusing on the Internet of Things (IoT), using connected devices to improve operations and strengthen their market position.²

IT Outsourcing Market in South Africa

IT outsourcing in South Africa is set to grow significantly over the next few years. Experts project the market to reach $2.4 billion by 2025 and grow at an annual rate of 7.87% from 2025 to 2029. By 2029, the market should hit $3.25 billion. In 2025, businesses are expected to spend an average of $94.64 per employee on IT outsourcing. This reflects South African businesses’ heavy investment in outsourcing to improve efficiency and support growth.³

South Africa is both a provider and consumer of IT outsourcing services. However, it is mainly known as a growing hub for offering IT outsourcing to other countries. It is a popular outsourcing destination for European and North American businesses. This is because of the overlap of its time zone with Europe. On the other hand, many South African companies outsource IT services to more established hubs like India and Eastern Europe to access advanced technology and specialized skills at lower costs. Common areas of outsourcing include cloud computing, cybersecurity, and software development. Despite having a skilled IT workforce, South Africa faces skill shortages in some high-demand tech areas. This leads businesses to seek expertise from other regions.⁴

Top Software Development and IT Employers in South Africa

We have sorted a list of top companies that employ the highest number of IT professionals in South Africa. Furthermore, we have analyzed publicly available information on IT companies and sorted a list of the top firms based on employee count in South Africa. While our emphasis was on employee quantity, it’s worth recognizing that certain companies, although esteemed for their quality in the market, may not appear on or rank highly in the list due to their smaller employee size.

IT Industry Association in South Africa

South Africa’s IT outsourcing industry is supported by prominent associations that play critical roles in representing stakeholders, promoting professional development, and advancing industry standards.

Information Technology Association (ITA)

The Information Technology Association (ITA) serves as the official trade and employer representative body for South Africa’s information technology industry and a key industry body supporting IT outsourcing in South Africa. It represents over 200 companies involved in supplying IT equipment, systems, software, recruitment, and services. Notable members include Microsoft SA, DELL EMC, BCX, Netcampus. The association collaborates closely with the government, consumers, and other specialist organizations. Moreover, it is deeply committed to skills development in the IT industry. Through its partnership with the MICT SETA, the ITA ensures that technical skill standards align with international trends.

Institute of Information Technology Professionals South Africa (IITPSA)

The Institute of Information Technology Professionals South Africa (IITPSA) is a professional body recognized by the South African Qualifications Authority (SAQA). Established in 1957, IITPSA has a distinguished history of serving and representing South Africa’s ICT professionals and practitioners. It has cultivated an active and diverse membership spanning all levels of the ICT industry.

Reputed Institutions for Higher IT Education in South Africa

The ranking of the top universities in South Africa for Computer Science is based on their research performance. This assessment utilized a dataset comprising 2.72 million citations from 178,000 academic papers produced by 24 South African universities.⁵

Please note that the alumni in engineering roles may include engineering domains other than computer science or software engineering since we have taken the filtered count from their LinkedIn pages and sorted the list in descending order.

Conclusion

South Africa stands as a nation of remarkable contrasts and opportunities, characterized by its diverse cultural heritage, breathtaking landscapes, and a dynamic yet challenging economic environment. The country has evolved into a prominent player on the African continent and a destination of global interest. Its robust IT sector, rich mineral resources, and thriving tourism industry underscore its economic potential. South Africa’s forward-looking initiatives and strategic global positioning offer a promising outlook for sustained growth and development.

If you’re looking to outsource in South Africa and tap into its thriving IT sector, let us help you connect with the best companies through Enosis Outsourcing. Contact us today to learn more and explore the opportunities South Africa has to offer!

References

[1] South Africa – Economy, Mining, Manufacturing | Britannica ↩

[2] IT Services – South Africa | Statista Market Forecast ↩

[3] IT Outsourcing – South Africa | Statista Market Forecast ↩

[4] South Africa Business Process Outsourcing Market Report 2030 ↩

[5] South Africa’s best Computer Science universities [Rankings] ↩