Demand for Skills Drives the South African Outsourced Business Data Services Market, Observes Frost & Sullivan

CAPE TOWN, South Africa, March 18, 2010 - Business data services have increasingly emerged as business-critical in
South Africa. However, the majority of business data services are complex,
resource-intensive and expensive to operate in-house.

(Logo: www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

Furthermore, stringent regulatory requirements in sectors such as
financial services, retail and hospitality have resulted in operators opting
for specialist expertise by outsourcing these services, to ensure that their
systems are legislation-compliant. While cost cutting has historically been
the main reason for outsourcing, in the case of business data services,
improved efficiencies and access to skills are the key drivers.

New analysis from Frost & Sullivan (www.ITservices.frost.com),
South African Client Requirements for Outsourced Business Data Services,
finds that the market earned revenues of US$158.00 million in 2008, and
estimates this to reach US$327.00 million in 2015.

If you are interested more information on this study, please send an
e-mail to Patrick Cairns, Corporate Communications, at
patrick.cairns@frost.com with your full name, company name, title, telephone
number, company e-mail address, company website, city, state and country.

"The critical shortage of relevant skills for business data services, the
high cost of retaining dedicated in-house staff, and rising legislative and
regulatory demands are encouraging companies to outsource their data services
processes and systems," says Frost & Sullivan Research Analyst Spiwe Chireka.

Most of the data services in South Africa have reached the maturity stage
or are nearing maturity in terms of adoption and usage. These include
Internet services, data storage services and disaster recovery/business
continuity services. Consequently, the outsourcing of these services has
followed a similar trend.

However, cost savings from outsourcing services have not been as
forthcoming as the market initially expected. Additionally, customer service
has been below the customers' expectations, resulting in some providers
in-sourcing their data services operations.

"Companies have indicated that it is not always possible to justify the
acquisition of a completely new system and as a result, they are often
required to integrate new components with legacy equipment, posing issues in
terms of interoperability," explains Chireka. "While strong inroads have been
made by vendors, there still remains room for improvement to provide seamless
integration and interoperability between the new outsourced and existing
in-house systems."

Business data services have become so mission-critical that companies are
prioritising it on the true manageable total cost of ownership, rather than
merely on return on investment (ROI). Thus, service providers should have a
greater focus on providing the true total cost of ownership benefits and
reduce their effort on promoting outsourcing as a means to cost savings.

"Customer service strategies that enhance value for the customer - access
to a wide support network, deep and wide technical solutions, and
applications that facilitate knowledge sharing - will provide a strong
competitive differentiator for operators in the future," concludes Chireka.

South African Client Requirements for Outsourced Business Data Services
is part of the IT Services & Applications Growth Partnership Services
programme, which also includes research in the following markets:
Communications Market, Analysis of Channel Partner Strategies in the Kenyan
Telecommunications market, and East African Mobile Communications Market. All
research services included in subscriptions provide detailed market
opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to
accelerate growth and achieve best-in-class positions in growth, innovation
and leadership. The company's Growth Partnership Service provides the CEO and
the CEO's Growth Team with disciplined research and best-practice models to
drive the generation, evaluation, and implementation of powerful growth
strategies. Frost & Sullivan leverages over 45 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 40 offices on six continents. To join our Growth Partnership,
please visit www.frost.com.

South African Client Requirements for Outsourced Business Data Services

M4EA

    Contact:
    Patrick Cairns
    Corporate Communications - Africa
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

www.frost.com

Patrick Cairns, Corporate Communications - Africa of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com