1、Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.1AgendaqProject Backgroundq Market Overview (Key Indicators 2019,Kenya IT Market Value(US$M)Forecast 2019-2019,Kenya IT spend by Vertical segments)q ICT Ecosystem Overview -Vendor Survey(market Structure,challenges,opportu
2、nities,Vendors performance,outlook)q International Benchmarkingq ICT Skills Survey Highlightsq Residential Usage and Penetration Highlightsq Business Survey Highlightsq RecommendationsCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.2Project BackgroundCopyright IDC.Repro
3、duction is forbidden unless authorized.All rights reserved.BackgroundSurvey Objectivesq Understanding the Kenyan ICT Ecosystem and trends in the market.q Sizing the ICT Market and its sub segments(hardware,software,services,etc)in Kenya.q Compiling a baseline of key ICT KPIsq Benchmarking key Kenya
4、ICT indicators against six countriesq Understanding the ICT Skills availability,demand and gapsSurvey Highlightsq Aims to provide ground-breaking primary research that encompasses numerous market sub-segments and different stakeholdersq It will leverage on existing secondary market research in order
5、 to consolidate existing discrete market informationq It will have a repeat cycle to gauge the progress and impact of KICTB and other stakeholders initiatives.q The survey is consultative as well where multiple stakeholders are both respondents(i.e.What are your issues?)and also beneficiaries(i.e.Wh
6、at to do?)q Timely to augment development of existing KICTB projects Pasha centres(rural access),Tandaa(digital content),Wezesha(asset financing)as well as other government ICT initiativesCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.4Kenya ICT Market OverviewCopyrigh
7、t IDC.Reproduction is forbidden unless authorized.All rights reserved.5Market OverviewKenya ICT Market Key IndicatorsCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.6Market Overview ICT Spending by Technology AreasCopyright IDC.Reproduction is forbidden unless authorize
8、d.All rights reserved.7Market Overview Spending by Vertical SectorsCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.8Kenya ICT EcosystemCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.9Kenya ICT EcosystemStructureCopyright IDC.Reproduction i
9、s forbidden unless authorized.All rights reserved.10Kenya ICT EcosystemHighlights 1/2qThere are an estimated 20-30 vendors present in the market most of whom rely on a small pool of major distributors and Tier 1 Value Added Resellers(VARs)and Dealers who combined account for the bulk of ICT Business
10、 in Kenya estimated at nearly 50-60%.qOn average PC and Printer vendors each have between three to four distributors and at least six other partners(dealers and systems integrators)each at different market levels.qAt the lower part of the pyramid are Tier 2 VARs and dealers,estimated to number more
11、than 100 players and whose focus is part of the SME segment,the SMME and home user segment.These are players who typically do not have a country wide presence and would largely be found operating at a provincial level or even a national level(where SMEs have such a presence to require nationwide ser
12、vices)but at a smaller scale nonetheless.qThese Tier 2 firms are mostly Kenyan owned companies serving other Kenyan owned businesses and occasionally securing parts of relatively good contracts in the government and education segments,where procurement of goods or services may require a local player
13、.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.11Kenya ICT EcosystemHighlights 2/2qThe Tier I players largely comprise companies with both a national and regional presence,and in most instances are majority foreign owned companies spinning off regional offices in Sout
14、h Africa,UAE,India among other countries.qOwing to having a good foothold in their parent regions,coupled with access to industry best practices,fairly solid skills bases and access to capital,such companies have been able to target the market segment that includes multinational companies(MNCs),larg
15、e enterprises and government,where such credentials bear heavily on decision making at this level.qVendor competition on channel partnerships has intensified with main distributors being sought after by other vendors to leverage on their reseller network.Thus multiple brand handling by the channels
16、is the norm even for channel partners who were loyal to certain vendors.qThe channel is maturing fast with thinning out of grey shipments.qTelcos and telco channels are now selling PCs.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.12Kenya ICT EcosystemHighlights 2/2qV
17、endors are keen on setting up offices in Kenya to serve the East and Central Africa region.qVendors with a local presence enhance the brand image significantly as well as improve logistical support and increased marketing campaigns.qWith more vendors setting up locally,the market has seen an increas
18、e in both the number of channel partners.qGovernment initiatives including infrastructure development,regulatory reforms(licencing frameworks),investment in public access centres,e-government projects,content creation,device subsidies,have all had a very positive effect in transforming the market,st
19、imulating investment,ICT uptake and bolstering confidence in the overall ICT market.Thus vendors have registered positive growth over the last three years of between 15-15%in business and with some posting growth in headcount of between 25-50%Copyright IDC.Reproduction is forbidden unless authorized
20、.All rights reserved.13Kenya ICT EcosystemKenya as a regional HubAmong the countries Kenya based vendors have reach into from their Kenyan hub include:Uganda,Tanzania,Rwanda,Burundi,Ethiopia and Southern Sudan.Kenya is without doubt the regional hub for most vendors with a regional reach spanning be
21、tween three to six countries on average for vendors.Aside from being a hub,it is also a stepping stone for these vendors to set up operations in neighbouring countries but still maintaining somewhat centralized marketing,inventory and support functions at regional levels.Inherent in this structure a
22、re various opportunities including training,skills transfer,overall higher employment,technology leadership and increased investment.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.14Kenya ICT EcosystemChallenges facedChallengesqCurrency fluctuation affecting importsqOv
23、erall low purchasing power especially in 2019 with high inflation putting pressure on disposable income.qTaxation on consumable products and unclear taxation framework to define various ICT imports.qProduct/Service quality perception vis a vis other competing products/services in the market(e.g.pro-
24、West stance or pro-more established brands)qLengthy customs procedures-demurrage costs passed on to users therefore higher prices.qSourcing highly qualified talent.qDoing business with the government procurement laws.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.15Mar
25、ket OpportunitiesqSkills development.qFurther infrastructure investment mainly last mile access and quality of existing networks is crucial for more pervasive adoption.qReform tax environment to attract ICT investors.qAddressing the problem of counterfeit products(consumables,devices),with support o
26、f relevant government departments(in terms of scrutiny,enforcement and standards).The success experienced by counterfeiters illustrates there is good demand for products.qSkills gaps are opportunities where channel partners can intervene themselves rather than leave it up to vendors to acquire and m
27、aintain the skills.Channel partners can develop their own existing staff to meet some of these positions and leave the vendor to have a basic presence-a sort of shift down the tier and in line with the earlier stated objective to deepen intimacy with customers and strengthen the channel.qOverall gro
28、wth in the IT market will continue to stimulate growth in other areas.qEnhance the platform for increasing regional reach.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.16Kenya ICT EcosystemVendors Market Outlookq Investing in specific ICT Skills like mobile applicatio
29、ns development and setting up innovation hubs.qVendors have deliberate strategies to develop and use more local talent than imported.qSetting up innovation funds at academic levels and for developer groupsqEntry of products relevant to the local market and environment(e.g.solar powered devices)qIncr
30、eased participation in government driven ICT programmes.q Watching very keenly on developments with the Konza Digital City with a view to enhancing presence and regional investment.qDeepen customer relations as more intimacy is needed in the market.qReforming go to market strategies in line with a c
31、hanging ecosystem underpinned by technological and other developments.qIncrease presence in the region,headcount and channel partnerships.qEnhance vertical sector and product specializations skills,products,GTM approach.q Focus on infrastructure issues and how to address how lack of adequate infrast
32、ructure(power)affects uptake.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.17Benchmarking KenyaCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.18Benchmarking Internet Users vs Connections as a%of populationqIn more developed countries the
33、 total number of connections vis a vis the number of users are evenly spreadqIn countries like Kenya,Nigeria and Morocco,there are lower numbers of connections but higher number of users indicating most connections are shared connections and largely comprise business connections(including publicly a
34、ccessible connections like cyber cafes,education institutions).Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.19Benchmarking Total Internet vs Household penetrationqKenya has a higher internet penetration vis a vis South Africa but mainly bolstered by mobile internet c
35、onnections though with a lower proportion of households connected owing to a declining fixed network and poor development of DSL based services.qKenya compares much better than both Nigeria and Rwanda on both countsqEgypt has a much higher overall and household internet penetration with a huge gap b
36、etween Kenya of almost 25 percentage points at household level.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.20BenchmarkingComputer PenetrationqKenya has slightly higher PC penetration rates than Nigeria and Rwanda but still very far behind South Africa and Morocco,mo
37、stly owing to lower disposable income than these countries.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.21BenchmarkingHousehold Internet Access vs Household PC AccessqIn terms of PC Access at the household level,Kenya is only better than Rwanda.qIt should be noted th
38、at Nigeria as a manufacturer of PCs (Zinox brand)that are locally affordable,accounts for much higher PC penetration at household levels but negligible household internet penetration given infrastructure issues(submarine cables arrived way after they did in East Africa)Copyright IDC.Reproduction is
39、forbidden unless authorized.All rights reserved.22BenchmarkingBusiness Internet UsageqIn terms of business usage of the internet,Kenya is nearly on par with more developed countries like Egypt and Morocco and slightly ahead of NigeriaCopyright IDC.Reproduction is forbidden unless authorized.All righ
40、ts reserved.23BenchmarkingBroadband Access TariffsqDespite additional capacity,cost of broadband is still a factor for business vis a vis other countries.qNigeria has recently got a lot of international bandwidth but constrained somewhat by back bone,last mile access and electricity challenges.qLand
41、locked Rwanda largely relies on bandwidth from operators in neighbouring countries.Copyright IDC.Reproduction is forbidden unless authorized.All rights reserved.24IT Skills SurveyCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.IT Skills Survey Highlights IT Employment b
42、y ProfessionOf the total IT employment in Kenya(27,000 IT professionals in 2019),IT support people represent the largest portion(27%),followed by Applications Systems Analysts and System Engineers(13%each).The structure of IT professions is slightly different for IT companies and end-users.While the
43、 IT management and administration professions prevail in the end-user segment,IT companies employ more IT development-related professionals.Source:IDC IT Skills ModelCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.26IT Skills Survey Highlights Demand Prediction by Profe
44、ssionsRoughly 9600 IT professionals are expected to be added to the Kenyan IT workforce.The demand for individual IT professions differs by profession.Software Developers(at 70%growth)and Project Managers(at 57%growth)are the professions expected to grow the fastest over the period 2019-2019.Source:
45、IDC IT Skills ModelCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.27IT Skills Survey Highlights Availability of IT ProfessionalsApplication Systems Analysts and Software Developers are the IT professions that are least available.Approximately 45%of respondents reported
46、 they are very difficult or difficult to find.On the contrary,IT Support people and IT Administrators are much easier to find only for less than 10%of respondents,they were reported as very difficult of difficult to find.Source:IDC IT Skills ResearchN=158Source:Business SurveyCopyright IDC.Reproduct
47、ion is forbidden unless authorized.All rights reserved.28IT Skills Survey Highlights Demand/Availability Matrix for IT ProfessionsNew jobs growth between 2019 and 2019%of companies reported very difficult or difficult to findMonitorConsiderFocusAvailabilityDifficultEasy DemandLowHighSoftware develop
48、erApplication Systems AnalystIT Project ManagerSystem EngineerIT Manager/DirectorIT ConsultantWeb DesignerIT SupportIT AdministratorTeam LeaderCopyright IDC.Reproduction is forbidden unless authorized.All rights reserved.29IT Skills Survey Highlights Demand Prediction by IT SkillsThe demand for indi
49、vidual IT professions differs.The most growing demand will be seen for IT Project Management Skills(1 3 6%)a n d S o f t w a r e development skills(135%).IT Administration and HW skills are projected to grow at the lowest rate less than 12%.Source:IDC IT Skills ModelCopyright IDC.Reproduction is for
50、bidden unless authorized.All rights reserved.30IT Skills Survey Highlights Availability of IT SkillsSoftware development/deployment&Enterprise/business application skills are least available for approximately 30%of interviewed organizations,these professions are very difficult or difficult to find.P
