- Technological developments, government promotion of ICT and Nigeria's exposure to the global stage have provided additional growth stimulus, according to a new analysis from Frost & Sullivan, which also stated that the country’s IT market earned revenues of $58.0 million in 2007 and estimates this to reach $330.0 million in 2014.
Although the Nigerian IT infrastructure market is in its infancy, key sectors such as the financial, telecommunications, and oil and gas industries have begun outsourcing elements of their IT functions to third parties, said the report.
"The unreliable power supply in Nigeria is promoting the growth of outsourced services such as disaster recovery and dedicated hosting," notes Frost & Sullivan Research Analyst Mpho Moyo, further adding: "This is because companies need to have contingency measures in place to ensure business continuity during power failures."
The reports also notes that some business requirements may demand 24-hour access to networks or e-mail, further saying, frequent power outages can be extremely disruptive. From the disruption the analysis said, IT outsourcing services such as disaster recovery provide backup systems for companies to ensure business continuity.
However, the growth of IT outsourcing services is constrained by the limited number of companies that offer these services. The lack of aggressive marketing by IT outsourcing providers poses a further challenge to market expansion, said the report.
"Existing market participants need to take advantage of the growing awareness of the benefits of outsourcing in key sectors," advises Ms Moyo. "This will ensure that companies have a head start as competition intensifies and the Nigerian IT market develops."
Frost & Sullivan however warns that experience and accreditation will be important, as Nigerian companies are highly brand-conscious, also adding that it is also important for market participants to build strong customer relationships through the provision of consulting services to boost awareness of their IT outsourcing services.
"IT outsourcing service providers need to be able to anticipate customer requirements and design appropriate solutions," comments Ms Moyo. "They need to engage in a close consultative process with their clients to guarantee success."
The analysis of the Nigerian IT Infrastructure Outsourcing Market is part of the IT Services & Applications Growth Partnership Services programme, which also includes research in the following markets: West African Broadband Market, East African Broadband Market and, Kenyan IT Infrastructure Market, according to Frost & Sullivan.
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