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2022/05/13 12:05:31

Europe IT Market

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Some facts from the chronology of the development of the IT market Europe are highlighted in separate articles:

2022

Japan and EU announce digital cooperation

On May 12, 2022, a digital partnership was announced at a bilateral summit of the EU and Japan. The European Council and Japanese leaders reaffirmed their "close and comprehensive" partnership and issued a joint statement ahead of the EU-Japan 2022 summit. The tenth item of the joint statement announced the beginning of a digital partnership between the EU and Japan. The partnership will aim to promote cooperation on a range of digital issues to stimulate economic growth and "build a sustainable society through inclusive, sustainable, people-centred digital transformation based on shared values."

According to the statement, the partnership will strengthen the existing dialogue with a view to achieving concrete results, in particular, on issues of safe 5G, Beyond 5G/6G technologies, the safe and ethical application of artificial intelligence and the sustainability of global supply chains in the semiconductor industry, while promoting an open and innovative environment.

Japan and the EU conclude the first digital union

The Free Flow of Trusted Data programme will continue to promote safe and reliable cross-border data flows by enhancing confidentiality and security.

The digital partnership will also enable Governments to work together in areas such as secure international connectivity between the EU and Japan and green data infrastructures, privacy, data innovation, digital regulation, development of digital skills for workers, digital business transformation, including small and medium-sized enterprises (SMEs), and public services.

Participants are also reported to be committed to working towards the development of globally compatible standards and to promoting digital trade for the benefit of their enterprises and their employees. The EU and Japan will immediately launch the Digital Partnership and review progress on an annual basis.[1]

EU and India conclude IT union

On April 26, 2022, Prime Minister Narendra Modi and President of the European Commission Ursula von der Leyen announced the creation of to trade the "Trade and Technology Council" between and - a India EU high-level strategic agreement to solve key trade, economic and technological problems. Previously, this structure was created by the EU only to strengthen relations with USA. here

EU in secrecy engaged in reducing technological dependence in the field of defense and security

In mid-February 2022, the European Commission announced a roadmap for reducing the technological dependence of the European Union (EU) in the fields of defense and security. The document emphasizes the special importance of digital technologies.

The Roadmap was a response to a request by the European Council a year ago to outline a plan to strengthen development and research in order to reduce the EU's technological dependence in these areas. It is planned to be presented at an informal summit in Paris in March 2022, and it should fit into the "Strategic Compass" - the military concept of the EU, which is still in the status of[2] project].

As part of this initiative, cooperation is expected, including with NATO, but in such a way as to avoid creating new EU technological dependencies and aggravating existing ones "(photo - Reuters/Yves Herman)"

The document involves the formation of an observatory (Observatory), which will identify and evaluate the range of technologies critical for the EU in the fields of defense, space and related civilian sectors, their potential areas of application, will reveal the causes of dependence and related threats. Under the monitoring structure, it is planned to create an expert group for closed-door discussions with representatives of high-level EU member states.

Based on the data to be obtained from the supervisory body, the European Commission will submit a report on critical technologies and risks in the field of defense, security and space related to technological dependence to EU member states by the end of 2022. Similar reports are then scheduled to be prepared every two years.

Based on such a report, the European Commission plans to prepare "roadmaps" on various technologies, including measures to strengthen development and research, reduce dependence related to defense and security. And when the mechanisms of the work of the supervisory body and interaction with it will be run in these areas, this practice could be extended to other industries, follows from the published document.

One of the tasks of this initiative is to overcome the disunity between defense and civilian R&D, to strengthen the exchange of technologies, especially those related to critical ones. To do this, the European Commission in 2023 plans to present an approach that would use programs and financing tools at the EU level.

The document involves cooperation, including with NATO, but in such a way as to avoid creating new EU technological dependencies and aggravating existing ones.

The road map presented in February, related to the reduction of technological dependence in the areas of defense and security, is only part of the EU's more global concern about dependence on foreign developments and materials. In mid-2021, the EU first presented extensive research in this area related to strategic areas such as raw materials, batteries, ingredients for the pharmacological industry, microelectronics, cloud technologies, etc[3].

And in February 2022, the EU adopted a law on European chips - a strategic project designed to catch up with the EU's lag in the development and production of chips. Estimating its share of the global semiconductor market at 10%, To Europe the statement states that it is strongly dependent on several foreign suppliers. The law provides for the expansion of state financing of projects, assistance to small and medium-sized enterprises, international cooperation with "like-minded partners."

2021: EU invests billions in blockchain and high-performance computing

In mid-September 2021, the authorities of the European Union announced investments in blockchain, data infrastructure and high-performance computing as part of a multi-billion dollar project to stimulate the development of technologies throughout the bloc.

The projects, which will be organized in several EU countries, add to the regional push for semiconductor production after a global shortage forced automakers to slow production lines. The European Commission did not provide details on how much would be invested in each technology area.

EU invests billions in blockchain and high-performance computing

About a fifth of the EU pandemic recovery fund of €750 billion ($887 billion) will be spent on digital technologies, since these technologies are crucial for the region.

Officials want to channel funding to several areas by 2030:

  • Data infrastructure;

  • Low-power processors;

  • 5G linkage;

  • High-performance computing;

  • Public administration;

  • Blockchain services;

  • Digital innovation;

  • Investing in people's digital skills.

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This initiative demonstrates how the joint investment of the EU and its member states in support of the common goal can help make Europe a leader in the high-tech sector, bringing significant benefits to all European citizens and enterprises. Now we look forward to the next long-term budget of the EU and our Digital Europe program, in which we have proposed a significant amount of investment in the deployment of infrastructure, "commented the Commissioner for Budget and Human Resources Gunter Ettinger.
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Projects will be distributed to different countries of the European Union. Their exact amount and amount of funding for certain areas by September 2021 is not disclosed.[4]

2020

European IT startups attract record investments

European IT startups from January to early December 2020 attracted record investments, despite the coronavirus pandemic. The venture capital company Atomico reports that in September the amount of financing for such projects reached a monthly record of $5 billion, and in general for 2020 it promises to amount to $41 billion, which has never been in one year.

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This is a sign of ecosystem sustainability, "said Tom Wehmeier, one of the authors of the Atomico report. Among other things, venture capital supports 115 unicorns, whose value is over $1 billion, and the total value of technology companies founded in Europe since 2000 has grown to almost $1 trillion.
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European IT startups attracted record investments in 2020

The music streaming service Spotify and the payment company Adyen top this list, since their cost exceeded $50 billion. The Swedish fintech company Klarna and the Romanian developer of RPA solutions UiPath reached an estimate above $10 billion without entering the exchange.

Atomico estimates that while Europe is still five-fold behind North America in IT investments, the volume of institutional money going into venture capital has tripled over the past five years. As a result, Europe's 24 largest technology firms have created a network of more than 3,000 founders of new companies.

By October 2020, 32 primary public offers from technology companies were registered in Europe, but of these, only three were worth more than $1 billion. Larger firms still gravitate to the New York Stock Exchange. However, well-received IPOs by The Hut Group in London and Allegro in Warsaw show that local markets are still afloat. The 2021 forecast for primary public offerings looks promising, Wemeyer said.[5]

European IT Market Shows 7.3% Growth

The volume of the European IT market in the second quarter of 2020 increased by 7.3% compared to the same period in 2019. In June, growth was even stronger - by 14%. Moreover, the largest countries of the region showed an impressive rise in costs: Germany (+ 17%), Italy (+ 38%), France (+ 15%), Spain (+ 19%). This is evidenced by the data of the analytical company Context.

The IT market in Poland in June 2020 grew by 38%, in Britain - by 6%. Despite the small growth of the British market compared to other states, it is more stable, analysts say.

While in Europe spending on information technology rose significantly in June, in Russia, on the contrary, it decreased - by 5%. Experts do not give more detailed information on the Russian market.

Context assesses the situation in the IT market based on the supply of devices and software in the distribution channel. In the 27th week (ended July 5, 2020), the volume of the European IT market reached 1.84 billion euros, which was a record since the beginning of the COVID-19 coronavirus pandemic.

Russia's IT market slumped by 5% in pandemic conditions

In Europe, there has been a surge in demand for many categories of process equipment. So, sales of mobile devices in the 27th calendar week jumped by 28%, components and accessories for computers - by 22% and 27%, respectively. The sale of wearable electronics increased by 22%, game consoles - by 33%, high-tech equipment for maintaining and improving health - by 81%.

Due to the massive transition to work and training from home, sales of web cameras in Europe increased by 158%. Researchers also noted an increase in sales of motherboards (by 54%), video cards (by 50%), headsets (by 39%), laptops (by 28%) and mobile workstations (by 30%).[6]

The most successful technology startups in Europe

European technology companies that have attracted the most investment

From 2015 to February 2, 2020, a total of 37 companies raised almost $9.2 billion, and the estimate of eight of them exceeds $1 billion.

2018: Major IT Companies

Data for 2018

2017: Multi-national companies in the EU will report taxes for each country separately

The European Parliament approved in early July 2017 a directive according to which multinational companies will report on finance and taxes separately for each country where they work. Now such companies submit a general report, which gives them the opportunity to pay taxes under the legislation of those states where taxes are lower. To do this, income is simply transferred from one country to another.[7]

According to the vice-president of the European Commission Valdis Dombrovskis (Valdis Dombrovskis), countries European Union annually receive from such corporations from 50 to 70 billion euros.

According to the directive, corporations with an annual turnover of 750 million euros or more will be required to provide information on revenue, profit, tax payments and the number of employees separately for each country where they work, if it is a member country of the European Union or a territory with preferential tax regime. The remaining States are not affected by the directive.

Directive of the European Parliament will force multinational companies to pay taxes according to the rules

However, in order to protect fair competition, the new directive allows for some exceptions. For example, companies are allowed to apply for a short period of time to be exempted from the need to provide "sensitive financial information," the disclosure of which can play into the hands of their competitors. At the same time, it is not specified that it cannot be classified as such information. As a result, the anti-corruption group Transparency International has already called this exception a "huge loophole" for multinational companies, which could negate the effectiveness of the new directive.

2013

Europe turns out to be the last in the world in terms of growth in IT costs

In April 2013, the European Information Technology Observatory (EITO)[8] published a report that, while international IT and telecommunications spending is projected to grow by 5.1% in 2013, this figure will be only 0.9% in Europe.

Among the countries with the highest growth rate in IT spending in 2013, India (13.9%), Brazil (9.6%) and China (8.9%) are most likely to be, while the EU and Japan (1.4%) expect the lowest cost increase.

At the same time, according to Dr. Axel Pols, chairman of EITO, even a 1% increase within the European Union should be considered as "positive." At the moment, the US, which can increase IT spending by 6.5% in 2013, holds a share of 26.8% of all IT spending in the world. This is followed by the European Union (21.8%), China (9.5%) and Japan (8.3%).

Forecast of IT spending in Europe (Gartner)

IT spending in EMEA reached $1.154 trillion in 2013, which is 1.4% more than in 2012 (it amounted to $1.138 trillion), according to Gartner[9]. Despite the ongoing economic instability in this region, analysts still predict a slight positive growth in the market, mainly due to an increase in consumption in the segments of devices and software. Also, as a significant driver for the market, such a phenomenon as big data is noted.

According to Peter Sondergaard, vice president of Gartner, 2012 can be called "pessimistic" for IT spending in Europe: in general, in EMEA, they decreased by 3.6% compared to 2011 goal, and separately in Western Europe - by 5.9%. However, EMEA will return to positive dynamics, the local market will grow until 2016, when it will reach $1.246 trillion.

The expert also noted that the segment of mobile devices remains the "light of light" in the IT market of the region, since, according to Gartner, purchases of smartphones and tablets are significantly superior in terms of PC purchases. According to Gartner, the cost of mobile devices (laptops, mobile phones, ultrabooks and tablets) in EMEA will be $136 billion in 2012, and in 2016 - $188 billion.

In Western Europe, not only individuals, but also business became active consumers of mobile gadgets, due to which the mobile market grew by 8% in 2012. In contrast, the mobile market in Western Europe declined by 5% in the same period. In Eastern Europe, the Middle East and Africa, mobile supplies will dominate the market until 2016.

By 2016, two-thirds of the region's workers will have a smartphone or tablet. This will change the approach of users to buying software and eventually transforms the entire market. Traditional software providers will redesign their applications for this environment, which will cause an increase in software consumption. According to Gartner, IT spending on software alone will increase by 3.1% in EMEA in 2013, and in 2016 it will reach $100 billion.

In the next three years, along with North America and Japan, EMEA will be the most active in terms of big data development. By 2015, 4.4 million IT vacancies will be created to support this trend in the world, of which 1.3 million in EMEA, including 1.2 million vacancies in Western Europe alone.

What technologies are Europe's service companies investing in?

37.2% of service companies in Western Europe plan to invest in project management technologies, so project management for this vertical industry is the hottest trend, according to another study by IDC[10]January[10]

The most active in implementing technologies of this type will be legal (56.2%), architectural (53.2%) and engineering (43.5%) companies. In addition, in the investment plans for 2013, the fourth most important are project planning systems, so this only confirms the interest of the service business in project solutions.

As in previous years, security and storage will remain important areas of IT investment in 2013: they are covered by separate items in their IT budgets 63.3% and 42.8%, respectively, of Western European service companies.

Another 34.6% of service companies in the region plan to invest in the implementation of time recording systems. These decisions are especially relevant for those who are engaged in the consulting business or provide legal services.

At the same time, according to IDC analyst Angela Vacca, service companies in the European market as a whole are much more active in terms of investing in IT than in a single western part of Europe.

How much will European banks spend on IT?

Europe banks is slightly behind its peers in other regions of the world in terms of IT spending, the research company said in February 2013. Ovum Worldwide, according to Ovum, IT spending by financial institutions will grow by 3.4% in 2013 to $118.6 billion. Among European banks, IT spending growth will be 1%, while among banksNorth America the Asia-Pacific region - 3.3% and 5.1%, respectively.

In the medium term, the increase in budgets for information technology by European financial institutions will have a positive impact on their business. First of all, according to Ovum experts, banks will be interested in the development of digital channels, including online and mobile banking, as well as digital marketing, which will ultimately allow them to increase customer satisfaction and, as a result, their revenue.

Among digital channels, the top priority in 2013 will be mobile banking, especially among retail banks. According to Ovum, in Europe, mobile banking costs will grow by 4% in 2013, and the average annual growth rate for this item in the period from 2013 to 2017 will be 6%. In general, the cost of online channels among banks in this region will grow by 4.2% in 2013. Many banks will also implement their marketing activities online.

Ovum experts also found that the drivers of IT expenses among banks in 2013 will be credit risk management and data security. Information systems in this industry will spend $6.4 billion in 2013, of which $2.2 billion will be spent on Europe (about 5.5% of all IT expenses of European banks).

European IT Spending Forecast (Forrester Research)

Spending on information technology in Europe will almost stop in 2012 and 2013 due to the instability of the euro, according to another Forrester Research report. "The most likely outcome of 2012 will be either zero growth or a decline in IT consumption in general depending on the country," said Andrew Bartels, an analyst and author of the study. According to him, the more problems the euro will continue, the stronger IT depression will be.

According to Bartels, the European authorities are competent enough to make every effort to neutralize this negative scenario. If their actions are effective, at best IT spending in the region will increase by 0.3% in 2012.

In the event of a collapse of the euro, events in Europe will begin to develop according to the most dramatic scenario, warns Forrester. "chief information officers should take this into account and edit budgets accordingly in the hope that the situation will improve in 2013," said Bartels.

While IT consumption is very different across the European Union, and for example, there is a huge gap between developed countries such as Denmark or Sweden, and on the other hand Greece and Italy, the 2012-2013 crisis is so comprehensive that it will affect the entire region.

The only direction that can show an increase in costs in 2012 is IT outsourcing. But even analysts characterize this growth as "mediocre." In euros, the segment of IT outsourcing and equipment costs can grow by 3.3% in 2012, and the segment of IT consulting and integration services - by 2.8%. Communication costs will decrease by 1.7%.

In dollar terms, "the picture is even darker," the report says. In this currency, computer equipment costs in Europe will decrease by 6.8% in 2012, communications equipment - by 8.4%, and software - by 5.2%.

Public sector in the Eurozone will hastily master IT budgets

The situation in the commercial sector of the Central-Eastern European region remains in the stage of "wait - let's see" - representatives of the research company Pierre Audoin Consultants (PAC) write in early May 2012 on the official blog. Most large companies in these countries have foreign owners, and in the light of the growing centralization of IT at the headquarters level, local management solutions are practically powerless. This is well marked by the example of the most highly profitable banking and telecommunications verticals. The demand for IT in Central and Eastern Europe could compensate for the SMB segment, but small companies are often less developed than Western Europe and also have to work in difficult economic conditions.

The natural question is which segments leave growth prospects for local suppliers and system integrators? The largest consumer of software and IT services in the region remains the public sector. E-government programs are present in all markets without exception, but are at various stages of implementation. All are funded from EU funds and aim to significantly save budgets by reducing paper flow.

However, with the onset of the crisis, many countries of Central and Eastern Europe ignored this fact and were in no hurry with the implementation of e-government projects. Even the availability of EU funds available for the implementation of programs allocated for the period 2007-2013 did not help. But the deadline is nearing completion, and theoretically this can serve as a catalyst for the implementation of funds. Otherwise, there is a high probability that the volume of funds for 2014-2020. will proportionally decrease the level of their consumption in the previous period.

At least PAC analysts are leaning toward this view. If it is shared by the IT departments of government agencies of Central-Eastern European countries, a sharp increase in interest in the e-government programs launched earlier should be expected in the next 18-20 months.

IT Spending Forecast (Gartner)

Global IT spending in 2012 is projected by Gartner to be $3.8 trillion, up 3.7% from 2011. In 2011, global IT spending amounted to $3.7 trillion, showing an increase of 6.9% compared to 2010.

Gartner revised its forecast for global IT spending in 2012 and lowered it from the previous one, which envisaged an increase of 4.6%. In all four major technology sectors - computing, enterprise software, IT services, telecommunications equipment and services - costs are expected to grow more slowly in 2012 than previously anticipated.

Richard Gordon, vice president of Gartner, noted the uncertain growth of the global economy, the Eurozone crisis, the effects of floods in Thailand (which had an impact on hard drive production) as the main factors that together affected forecasts about global IT spending.

Floods in Thailand, covering a third of the state's territory with water, had a serious impact on the sale of personal computers and storage systems. According to Gartner estimates, the supply of hard drives will be reduced by 25% (possibly more) over the next six to nine months. Rebuilding the destroyed production facilities will also take time, and the consequences will have an impact during 2012 and very likely in 2013 as well, Gordon noted.

Although large OEM PC vendors, unlike others in the industry, will face fewer problems, no company will avoid influencing supply chains with hard drive market problems, so Gartner lowered its forecast for PC deliveries, which affected the short-term forecast in the equipment supply sector. The impact of these restrictions will affect the delivery of drives and PCs in the first half of the year, thus creating a difficult environment for planning equipment costs in general.

Spending on telecommunications equipment is forecast to show strong growth, with supplier revenues increasing by 6.9% in 2012, ahead of the corporate software market, which will grow by 6.4% (see table).

Global IT Spending in Billion US$

 

2011

Expenses

2011

Growth (%)

2012

Expenses

2012

Growth (%)

Computing

404

7.6

424

5.1

Enterprise Software

268

9.6

285

6.4

IT Services

848

6.9

874

3.1

Telecommunications equipment

444

7.7

475

6.9

Telecom Services

1,701

6.1

1,740

2.3

IT as a whole

3,664

6.9

3,798

3.7

Source: Gartner, January 2012

According to Vice President Gordon, in the context of the eurozone crisis, which caused uncertainty for both businesses and consumers in Western Europe, Gartner adjusted its forecast and expects IT spending in this region of the world to be 0.7% lower in 2012.

Meanwhile, according to a special IDC study, 85% of enterprises in nine Central and Eastern European countries (CEE) see the prospects for the development of their business for the next 12 months in a positive light.

According to Zoltan Komaromi, head of the research project, the mood in the region reflects cautious optimism. "Croatia, and Russia Czech Republic Ukraine look like countries where business is most optimistic about its own prospects. It is not surprising that companies in Greece are the most pessimistic in Central and Eastern Europe, with some lag they follow companies, "he Hungary said.

Despite continued economic instability, 26% of organizations plan to increase IT budgets, and 48% do not plan any changes. According to these expectations, in the Central and Eastern European region, ICT spending will appear moderate in the current fiscal year, and is likely to grow by less than 3% year-on-year.

2012: Top 100 software developers in Europe

At the end of 2011, the largest European software developers included:

Full rating for 2011

Notes

See also

IT (Global Market)

Global IT Market Trends