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South Africa has one of the healthiest IT services markets in the world, according to new research released this month by analyst firm IDC.

The market is expected to exceed US$5bn in 2012, and expand at a compound annual growth rate of 8.7% which will make it worth more than US$17bn in 2015. Out of services in South Africa, IT services make up 40% of the market.

IDC South Africa research analyst for IT Services Suzanne Nolan said growth was suppressed by the global financial crisis over the last year, but increasing demand for network, desktop and infrastructure hosting has pushed the market’s figures forward.

She said increased awareness of IT services and the growing amount of data center space in South Africa has also benefited the industry.

“After the freeze in IT budgets that came about as a result of the global economic crisis, 2010 saw a rebound in IT services spending,” Nolan said.

“The growth in IT services spending was driven by a recovering economy, increased business confidence, expanding bandwidth availability and various infrastructure investments made in the country in 201.”

She said vendors should be focussed heavily on service delivery models in South Africa, especially cloud computing to improve quality of delivery.

Africa as a continent has been maturing as a data center location in recent years thanks to new submarine cable links and data center growth and efforts to overcome past issues with power provision.