pac webinar - the french it market is changing. are you?
DESCRIPTION
The situation on the French IT services market is tougher than ever. Even if the digitalization of the economy remains a long-term growth driver, the number of rationalization projects on back office, or global delivery models, including offshore capabilities, is on the decline in a very hard economic climate. However, the market provides plenty of opportunities for those suppliers able to offer innovative and value-based solutions.TRANSCRIPT
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The French IT market is changing. Are You? The Software & IT Services Market in France - Key Trends, Growth Drivers and Opportunities Tuesday, September 17, 2013
2013
PAC Webinar
© PAC 2013
Today’s presenters
Your questions are welcome!!
Vincent Gélineau Principal Consultant IT Services PAC France
Franck Nassah SVP Operations PAC France
Olivier Rafal Principal Consultant Software Markets PAC France
2
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Economic and IT Environment
IT Challenges for Users
Trends & Impact on the IT Market
Vendor Landscape
Conclusion
Agenda
2013 3
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Economic and IT Environment
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Economic Situation Europe: GDP Growth in 2013
GDP Growth forecast 2013
2013 5
Source: OECD, IMF, 2013
0,3%
0,7%
1,5%
-1,8% -1,6% -2,0%
0,0%
2,0%
France Germany United Kingdom
Italy Spain
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Software and IT Services – France compared to Western Europe in 2013
2013
Source: SITS® – Global Datamart – Western Europe, 2013
CAGR 13/17
Market Share 2013
CAGR = 2,7%
CAGR = 3,5%
CAGR = 3,5%
CAGR = 2,2%
CAGR = 3,5%
Western Europe • Volume in 2013 = €230,580m • CAGR 13/17 = 3.3%
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CAGR = 3,2%
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IT Challenges for Users
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Challenges of the IT management User Survey 2013
8 2013 PAC Webinar "Topic", "Date"
55
47
58
45
42
24
37
35
40
28
42
41
45
38
9
9
12
10
14
23
22
48
41
39
36
36
32
31
38
42
44
45
45
41
47
13
14
16
18
17
25
20
Cost reduction and efficiency pressure
in IT operation Active contribution
of IT to optimize business processes
Smooth and secure IT operation
Active contribution of IT to promote
business innovation
Optimization of end user experience
Shortage of skilled professionals
Efficient organization of IT sourcing processes
...........................................
...........................................
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0 100 0 100
France Worldwide
Big challenge Minor challengeNo challenge Do not know
Share in percentage of the responding companies, n = 139/1,577
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C 20
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Use
r Sur
vey
What are the current IT relatedchallenges for your company?
Sou
rce:
SIT
SI®
Use
r Sur
vey
– Fr
ance
, 201
3
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Evolution of IT budgets User Survey 2013
9 2013 PAC Webinar "Topic", "Date"
Sou
rce:
SIT
SI®
Use
r Sur
vey
– Fr
ance
, 201
3
2
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27
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5
3
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France
..............................
Worldwide
40 20 0 20 40 60
Share in percentage of the responding companies, n = 139/1,577
Decreased stronglyDecreased considerablyDecreased slightly
Increased stronglyIncreased considerablyIncreased slightly
Compared with the previous year 2012, how much hasthe size of the company’s IT budget increased
or decreased in 2013?
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Evolution of spending in Application areas User Survey 2013
10 2013 PAC Webinar "Topic", "Date"
Sou
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SIT
SI®
Use
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– Fr
ance
, 201
3
50
42
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30
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22
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19
25
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21
13
8
18
9
19
17
16
20
19
20
23
17
23
50
48
38
37
33
32
29
29
28
27
26
25
8
12
11
12
13
16
13
13
13
18
15
14
IT security/ cyber security
Mobile device management/ mobile applications
Customer relationship management (CRM)
Business intelligence (BI)
Unified communication & collaboration (UCC)
Social media/ social collaboration
Supply chain management (SCM)
Enterprise content management (ECM)
Finance management (FM)
Human resources management (HRM) Supplier relationship management (SRM)
Product lifecycle management (PLM)
................................................
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20 0 20 40 60 20 0 20 40 60
France Worldwide
Spend less Spend more
Share in percentage of the responding companies, n = 139/1,577
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Use
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Considering the following application areas, doesyour company intend to spend more, about the same or
less in the next two years?
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France: Software market – Size and growth in 2013 (by Subsegment)
2013
Source: SITS® – Market SITS, 2013
Total Software Products Market • Volume in 2013 = €10,317m
• CAGR 13/17 = 3.0%
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France: IT Services market – Size and growth in 2013 (by Subsegment)
2013
Source: SITS® – Market SITS, 2013
Total IT Services Market • Volume in 2013 = €26,945m
• CAGR 13/17 = 2.5%
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Insurance!
Public (incl. Health & Social)!
Telecom!
Utilities!
Retail & Wholesale!
Services (incl. Media)!
Transport!
Banking!
France: Analysis by Vertical Software & IT Services market
Manufacturing (incl. Oil, Chemicals)"
Volume 2013! Growth drivers!Consolidation ERP, AM, CRM, Embedded
CAGR 13/17!
Compliance, Multichannel, Mobile Banking, AM
Modernization, Compliance, SaaS, Multichannel, BI
AM, BI, Software Packages, E-government
Cloud Computing , Next Gen Network, Global Sourcing
Smart Grid, Security, AM, Open Source
Big Data, Multichannel, CRM 2.0, Mobility, SCM
E-commerce, SaaS, Mobility, HR, Enterprise Social Networks
Cloud Computing, CRM, Testing
Very strong Strong Very weak weak Average
Competition!
2013
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Trends & Impact on the IT Market
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Changes on the Demand Side!
Opportunities & challenges for suppliers
Opportunities & Challenges for Suppliers!
2013
IT becomes commodity
Added value moving from IT towards business/ IT alignment
Buying power moving from CIO to business users involvement of general management in IT decisions
Business users look for a business service, not for a technology platform
Business services mean higher verticalization
Customer expectation: from innovation & added value in IT towards innovation & added value through IT
Reducing number of IT suppliers
Standardization & demand for pre-customized solutions
Ongoing price pressure especially on T&M projects and through increasing offshoring
Need for stronger positioning in real process consulting
Increasing importance of customer relationship outside the IT department
Need to position solutions via functionality and process support
Increasing focus on vertical portfolio & go-to-market. Need for vertical center of excellence
Need to demonstrate the business value of services and solutions
Ability to deliver end-to-end services & take care of the “integrator role”
Need to develop solutions based on packaged solutions and SaaS solutions
Internationalization & investments in foreign countries, including emerging countries
Need to increase international capabilities to accompany customers
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IT spending: Major Drivers & Inhibitors
• SaaS
• Cloud
• BI/ Big Data
• Social Enterprise
• Enterprise Mobility
• (Cyber) Security
• ‘Customer-centric’ strategies
DRIVERS
• Ongoing budget pressure
• Application Services
• AM
• Infrastructure Outsourcing & Hosting
• Cloud Computing
• Consolidation of IT environments
• Strong price competition
INHIBITORS
2013 16
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Top 100 IT Spenders in France
2013
22 Top IT spenders budget IT > €500m
43 Large IT spenders budget IT = €150-500m
35 Mid-large IT spenders budget IT = €50-150m
17 Top IT spenders budget IT > €500m
43 Large IT spenders budget IT = €150-500m
40 Mid-large IT spenders budget IT = €50-150m
2006 2012
Source: Top 100 IT Spenders in France, July 2013
17
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Evolution of the Top 100 IT Spenders’ Budgets By budget line
2013
Source: Top 100 IT Spenders in France, July 2013
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18
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Vendor Landscape
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France: IT Service providers consolidation in 2001-2012
41%
12% 14%
33%
Market shares of top players in 2006
Top 10 +10/Top 20
+30/Top 50 Rest of the market
41%
12% 18%
29%
Market shares of top players in 2012
Top 10 +10/Top 20
+30/Top 50 Rest of the market
28%
10% 11%
51%
Market shares of top players in 2001
Top 10 +10/Top 20
+30/Top 50 Rest of the market
2013
• A wave of consolidation during the years 2001-2006, with major mergers (Atos/SEMA, Sogeti/Transitiel, Unilog/Logica, etc.)
• The market shares of the top 20 ITS remained stable between 06 and 11.
• The consolidation was more significant among the Tier 2 companies (top 20 to 50) due to mid size acquisitions strategies and the emergence of some Indian companies.
Source: SITSI® IT Services – Market View – 2002/2007/2013 20
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IT Services: Top 10 Providers in France
2013
Source: SITSI® IT Services – Market View – France, 2013
IBM Capgemini
Atos
HP
Orange Business Services
CGI
Accenture
Sopra Group Steria
CSC
0%
1%
2%
3%
4%
5%
6%
7%
8%
0% 20% 40% 60% 80% 100%
Mar
ket S
hare
201
2 in
%
IT Services Revenue in % of Total Revenue
21
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Microsoft
Oracle
IBM
SAP
Sage EMC HP
Dassault Systemes Symantec
Adobe Systems 0%
5%
10%
15%
20%
0% 20% 40% 60% 80% 100%
Mar
ket S
hare
201
2 in
%
Software Revenue in % of Total Revenue
Software: Top 10 Providers in France
2013
Source: SITSI® Software – Market View – France, 2013
22
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The IT Ecosystem is Changing
Business Users
Business Consultants Technology
Suppliers
CIO Organization
Application Services Suppliers
Infrastructure Services Suppliers
Telcos
Offshore
Business Services Suppliers
New Players
Existing Position
Future Position
Legend:
2013 23
Application Software Vendors
SaaS Vendors
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Conclusion
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Key Takeaways
Market Opportunities
Market Challenges Standardization & demand for pre-
customized solutions
Reducing number of IT suppliers
Customer intimacy/ increase added value
The market provides plenty of opportunities for those suppliers able to offer innovative and value-based solutions
Business users look for a business service and gain budget
IP/ software investments
Consulting competencies
IT becomes commodity
Broad portfolio
2013
Digitalization of the economy New value proposition and ecosystem
25
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Questions & Answers
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Q&A
2013
Thank you for your attention! We look forward to your questions.
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From strategy to execution, PAC delivers focused and objective responses to the growth challenges of Information and Communication Technology (ICT) players. Founded in 1976, PAC is a privately held research & consulting firm for the software and ICT services market. PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market analysis as well as operational and strategic consulting. We advise CIOs and financial investors in evaluating ICT vendors and solutions and support their investment decisions. Public institutions and organizations also rely on our key analyses to develop and shape their ICT policies. For more information, please visit: www.pac-online.com PAC’s latest news: http://blog.pac-online.com""
About us!
2013
Franck Nassah SVP Operations PAC France M: +33 7 78 81 59 60 E: [email protected]
Vincent Gélineau Principal Consultant IT Services PAC France M: +33 7 63 23 01 80 E: [email protected]
Olivier Rafal Principal Consultant Software Markets PAC France M: +33 7 63 23 01 84 E: [email protected]
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PAC at a glance
The specialist for the Software and IT Services industry: providing support to IT Services and Software suppliers, IT users, influencers and investors."
The only European Group with Global coverage: strong local competences and global response covering 35 countries continuously and 100+ on an ad-hoc basis."
An integrated approach covering the totality of your market insight needs: Business development, Strategic consulting, Marketing communications."
Over 35 years of success serving all major Software and IT Services players globally.
2013
Supports ICT vendors in optimizing their strategies;
Advises CIOs and financial investors in evaluating ICT vendors and solutions;
Helps Public institutions and organizations to shape their ICT policies.
> 95% client loyalty
29
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North America!Canada"USA!!Latin America!Brazil"Mexico"Rest of Latin America"!!
Eastern Europe!Czech Republic"Hungary"Poland"Romania"Russia"Slovakia"Turkey"Rest of Eastern Europe"""
Asia Pacific!Australia"China"India"Japan"Rest of Asia Pacific ""Middle East & Africa!South Africa"Middle East"Rest of Africa""
SITSI® Market Research – Geographic Coverage!
2013 30
Western Europe!Austria"Belgium"Denmark"Finland"France"Germany"Italy"Netherland"Norway"Portugal"Spain"Sweden"Switzerland"UK"Rest of Western Europe"
SITSI® provides detailed market figures, vendor rankings and reports on 35+ countries and regions – covering 93 percent of the worldwide IT spending.
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SITSI® RESEARCH on France
• SITSI® France • Market Reports (IT Services, Software, Manufacturing, Banking, etc.)
• Market Figures (Software and IT Services, Cloud Computing, Verticals, etc.)
• Vendor Rankings (IT Services, Software, Manufacturing, Banking, etc.)
• SAP Services Program • Specific Reports • IT Services Rates Database • Multi-Client Studies (MCS) (Managed Security Services, Social Collaboration, etc.)
2013
Your contact for more information: Stéphane Maton [email protected]
+33 6 34 23 55 22
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