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European ICT Market and Successful Entry into these Markets. Claus Traeger cons im – Consulting for International Channel Marketing AL Invest Business Meetings – e-PME SIMO 2006 Madrid, Spain – November 7 th to 12 th. World ICT Market by region. 1,9 bi €. Source: EITO 2006 / IDC. - PowerPoint PPT Presentation
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European ICT Market andSuccessful Entry into these Markets
Claus Traeger
consim – Consulting for International Channel Marketing
AL Invest Business Meetings – e-PMESIMO 2006 Madrid, Spain – November 7th to 12th
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Market
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World ICT Market by region
Source: EITO 2006 / IDC
1,9 bi €
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World ICT market growth by region
Source: EITO 2006 / IDC
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European ICT Market by country
Source: EITO 2006 / IDC
660 bill €
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consim EU* ICT market growth
(1997 - 2007)
Source: EITO 2006 / IDC (* excluding Cyprus and Malta)
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European* ICT Market by product
• Value = € 659 bi
• HW (25%)SW (75%)
• IT (47%) TC (53%)
• 3.2% of GDP
Source: EITO 2006 / IDC
(*includes EU, N, CH, RO, BG)
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WE ICT market growth by segment
Source: EITO 2005 / IDC
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European IT Market by country
312 bill €
Source: EITO 2006 / IDC
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consim European IT Market annual Growth,
by country
Source: EITO 2006 / IDC
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European TC Market by country
348 bill €
Source: EITO 2006 / IDC
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consim European TC Market annual Growth,
by country
Source: EITO 2006 / IDC
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Vertical ICT Markets in Europe
Source: EITO 2006
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consim Trends in Europe (SW)
• SW Growth: 5,5% (05) and 5,8% (06)• Application solutions:
• ERP: upgrades, +efficiency• manufacturing, finance, retail/wholesale, business services
• CRM, SCM: upgrades, new investments• Gov., transport, utilities, healthcare, education, bus serv.
• SCM, SRM, PLM: +adoption in manufacturing• CRM: in verticals – banking and insurance• Industry specific applications: usable and attractive solutions
• finance and healthcare
• Regulatory compliance: manufacturing, healthcare and finance
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consim Trends in Europe (SW) (cont.)
• System Software:• Infrastructure: security, storage, resource mgt.• Optimization and simplification of IT Infrastructure• Business Intelligence: growth but saturation• Software Tools: Web-enabling• Open Source: important for flexibility and cost
• IT Services – growth rate 4,7%(05) and 5%(06)• Outsourcing and Management Services
• More in Northern Europe than Central and Southern Europe• Buyers: const-conscious
• Offshore competition: Eastern Europe
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consim Spain (ICT Sector)
• Economic Growth: 3,4% (05) and 3,2% (06)• Highest in the EU-Zone• Benefit: IT spending
• ITC Growth: 6,6 (05) and 4,0 (05)• IT Growth: 6,8% (05) and 6,7 (06)
• HW: recovery (PC, Laptop, Printers)• SW: Sys. Infrastructure, Application Development, Deployment
sw.• Positive Application SW: CRM, ERP, SCM, PLM
• IT Services: Outsourcing (competition)
• TC Growth: 6,5% (05) and 2,7% (06)• Fixed tel. , DSL , Mobile tel. , G3/UMTS
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consim Number of ICT companies in
Germany by revenue2
53
92
29
23
5
32
34
8
36
17
4
39
74
7
42
10
6
30
19
35
82
38
92
45
29
50
51
56
00
82
3
10
59
12
70
14
00
16
70
19
27
0
10000
20000
30000
40000
50000
1994 1996 1997 1998 1999 2000
up to 1 Mio. DM 1 to 5 Mio DM 5 to 100 Mio. DM
Source: Statistisches Bundesamt, IfM, BITKOM
84,7%
11,3%
3,9%
0,2%
% Co. Year 2000
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consim Market share of ICT SME in
Germany
Source: Statistisches Bundesamt, IfM, BITKOM
49,9
23,9
20,2
99,3
99,1
98,2
0 20 40 60 80 100
WZ 72
WZ 32
WZ 30
Companies in % Revenue in %
WZ 30 – Office technology, HardwareWZ 32 – TelecommunicationsWZ 72 – Databases, IT Services, Software
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consim Number of ICT companies in
Germany by number of employees
Source: BVIT, Bonn
11 to 2017%
21 to 5012% 6 to 10
23%
51 to 1005%
>5001%
101 to 5005%
<637%
Turnover by Employee:
± € 115.000 / year
# of companies = 50.000 > 90% of thecompanies are SME
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Internationalization of SME companies
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SME
Forms of Internationalization
• Direct• Branch• Company acquisition
• Indirect• “Big Players”
(e.g. IBM, SAP, MS)• Local Partner
++ --
• 100% control• Act like in home
market• Bigger margin
• Cost• Human Resources• Gain the market• long cycle
• Good entry• Image• Low cost
• Have the opportunity
• Dependence
• Existing channels• Will• Low cost
• Lower Margin• Distance to the costumer
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Partnership• Local partner:
• Local presence• Market knowledge• Clients• Portfolio of Products/Solutions/Services
• Products:• Complementary• Competitors• Another segment
• Other market segments (Eastern Europe, Magreb)• Other technologies (Java, Web Services, Linux, SOA)
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consim Conditions
• Conditions:• Have Products/Services/Solutions
• Quality, International, Material
• Preparation for international markets:• Investment of resources: Human and Financial• Internal organization of the company
• Experience with indirect sales• Reference clients
• Higher probability to succeed:• Niche market / Focus• Market knowledge:
• Characteristics of the market• Competitors• Competitive advantage
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European Mentality in Business (1/2)
• Serious, formal• Long time thinking Long run partnership• EU Markets = Mature Markets• Patience; Gain confidence through competence• Do what was agreed: in time! will be expected!• Send and answer post
• E-mail, fax, post
• Everybody ‘speaks’ English / ‘Portuñol’
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European Mentality in Business (2/2)
• Which are the most important factors for an European Company to choose a Business Partner:
(Reseach done by an English business magazine among Managersin several European countries)
1. Reliability / Trust
2. References
3. Price
4. Technology
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Presentation• Presentation of your Product / Services:
• Know your partner’s intention• ‘Personalize’ the Presentation
(tec, sales,mgt, ceo)• ‘Elevator Speech’:
• what is the product / service• what for it is used | what problem it solves• goal market | advantages for the end user
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Successful Meetings & Good Business!
Thank You!
Claus Traeger
consimConsulting for
International Channel Marketing
[email protected] www.consim.de
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consim consim – Consulting for
International Channel MarketingActivities
• Find partners in Europe/L.A. according to companies’ needs• For groups and/or individual companies
• Companies preparation for international markets• Internationalization of the company• Speeches, courses, coaching, monitoring• For individual and/or group of companies
• Marketing support needed to enter the European markets• Event participation (fairs, congress)• Public Relations• Publicity• Market Research
• Additional support needed (legal, location, financing, etc.)
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W.Europe Economic Background
Growth Rate GDP
0
0,5
1
1,5
2
2,5
3
3,5
4
(%) W. Europe Germany• Gross Domestic
Product (GDP):• W.Europe =
€ 9.224 billion• Germany =
€ 2.045 billion
Source: Eurostat
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consim General situation and Trends in the
ICT sector in Europe
• Demands of ICT Economic Environment• Trust of companies and investors• Companies performance
• Trends in ICT• Return on Investment (ROI)• Subjects of costs and efficiency• Optimization of existing infrastructure• Returns on passed investments
Source: EITO 2003 / IDC – update October
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Negative aspects of the development
• Delay in investments in basic industries
• Unused Capacity
• Selective Demands• ROI, ‘is the new technology really necessary’
business focus
• Price war
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Positive aspects of the development
• IT in small and medium size enterprises (SME)• Integration of internal systems• Integration of external systems• Outsourcing:
• Fix costs Variable costs• ‘Core competence’
• Security• eEurope 2005• National Governs• E-Health• E-Education• Basel II Agreement• E-Business: Web interface of existing applications
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Long run Trends
• Off-Shore services• Price pressure• Virtualization
• Pool of decentralized resources• Performance, economy of scale, reliability, existing capacity• Integration of applications• Convergence of IT e TC
• Internet: Contend Management and paid content• Mobile computing and Wireless
• Mobile solutions (WiFi, Bluetooth)
