How to sell software in Europe

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Capitalizing on Foreign Markets: how to sell software in Europe.

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How to sell software in Europe

  1. 1. Capitalizing on the European Market Software Industry Conference 17-19 July 2008 Carmen Sebe , CEO / Avangate BV [email_address]
  2. 2. <ul><li>Market overview – why Europe? Europe – a software market as big as the US </li></ul><ul><li>What to consider when going to Europe Overcoming the entry barriers </li></ul><ul><li>Some ideas on how to generate money from a foreign market </li></ul>Agenda
  3. 4. Market overview Global Software Market In 2011 , the Global Software Market is forecast to have a value of $271.8 billion , an increase of 33.6% since 2006 . Global Software Market Value Forecast: $ billion, 2006-2011 Source: Datamonitor
  4. 5. Market overview Global Software Market Segmentation <ul><li>Americas region accounts for 42.1% of the global market's value. </li></ul><ul><li>European region generates 36% of the global market's revenue. </li></ul>% Share, by Value Source: Datamonitor
  5. 6. Market overview European Software Market In 2011 , the European Software Market is forecast to have a value of $91.9 billion , an increase of 25.4% since 2006 . European Software Market Value Forecast: $ billion, 2006-2011 Source: Datamonitor
  6. 7. Market overview Europe by Country <ul><li>France is the most lucrative software market in Europe, accounting for 23.7% of the European market's value. </li></ul><ul><li>United Kingdom generates an additional 22.2% of the regional market's value. </li></ul>% Share, by Value Source: Datamonitor
  7. 8. Software Piracy in Europe <ul><li>The software piracy record in Europe is mixed: </li></ul><ul><ul><li>Austria, Finland have the lowest rates Worldwide, 26% </li></ul></ul><ul><ul><li>Average in EU – 36% </li></ul></ul><ul><ul><li>Central and Eastern European rate 69% </li></ul></ul><ul><ul><li>Rates in Russia and Ukraine have experienced the largest decreases in the world, but still very high – around 80% </li></ul></ul><ul><li>High piracy regions are also high market growth regions - for example: IT spending in Russia in the next five years is expected to grow between 15 and 20 percent - </li></ul>
  8. 9. <ul><li>Despite it’s late start Europe is now a mature eCommerce market and one of the biggest markets in the World . </li></ul><ul><li>A mature market concentrated in Northern Europe (United Kingdom, Germany and the Scandinavian countries) where 60- 80% of Internet users are eShoppers . </li></ul><ul><li>A growing market in France , Italy and in Spain with a ratio of eShoppers to Internet users the weakest (between 35-50% according to markets), but a very strong growth rate amongst new eShoppers which bodes for excellent potential for the short and long term. </li></ul>eCommerce Opportunities in Europe
  9. 10. eCommerce Opportunities in Europe <ul><li>A budding market represented by Eastern Europe , with different levels of maturity according to the countries </li></ul><ul><li>2008 and 2009 years will be significant for the development of e-commerce in Europe </li></ul>
  10. 11. <ul><li>Opportunities </li></ul><ul><li>Europe – a market as big as US </li></ul><ul><li>A software market accounting 91.9$ billion </li></ul><ul><li>Both mature markets and new markets </li></ul><ul><li>IT spending for decreasing the software piracy </li></ul><ul><li>High end market </li></ul><ul><li>Favorable exchange rate $/€ </li></ul><ul><li>Entry barriers </li></ul><ul><li>Language barriers </li></ul><ul><li>Multiple currencies, eased by adoption of the Euro </li></ul><ul><li>Differing tax and VAT regimes </li></ul><ul><li>Uncertainty over and pending legislation on ecommerce taxation </li></ul><ul><li>Cultural differences </li></ul>Is Europe a good place to be?
  11. 12. What do I need to sell in Europe? Product Localization Product Localization English only No cost Help, Manuals, etc. - targeted countries languages Translation Cost: $2000/10000 words Product Localization - best selling countries With a dedicated Partner $3000 - $10000 With a partner Associated No cost
  12. 13. What do I need to sell in Europe? Customer Support Customer Support Localization Support in English No cost FAQs, Tutorials, etc. - targeted countries languages Translation Cost Multilanguage Support Using Call Center $6-$15 / h $3000 - $10000 In house Salary A Partner No cost No cost
  13. 14. What do I need to sell in Europe? VSO – ConvertXtoDVD - Product Localization
  14. 15. What do I need to sell in Europe? VSO-Software.fr – Website Localization
  15. 16. What do I need to sell in Europe? VSO – ConvertXtoDVD - Product Localization
  16. 17. What do I need to sell in Europe? VSO-Software.fr – Website Localization
  17. 18. What do I need to sell in Europe? VSO-Software.fr - Customer Support
  18. 19. What do I need to sell in Europe? VSO-Software.fr - FAQs
  19. 20. What do I need to sell in Europe? VSO-Software.fr - Tutorials
  20. 21. What do I need to sell in Europe? VSO-Software.fr - eMail
  21. 22. What do I need to sell in Europe? Other things to consider <ul><li>PRICING : </li></ul><ul><ul><li>US $ for the US ; Euros for Europe </li></ul></ul><ul><ul><ul><li>Online : to have an eCommerce provider that allows to set prices in different currencies </li></ul></ul></ul><ul><ul><ul><li>Channel : to have a price list in Euros </li></ul></ul></ul>
  22. 23. What do I need to sell in Europe? Other things to consider <ul><li>LEGAL </li></ul><ul><ul><li>VAT </li></ul></ul><ul><ul><ul><li>EU countries for direct sales : </li></ul></ul></ul><ul><ul><ul><ul><li>The end user will pay their country VAT </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Should register in an EU country for VAT reimbursement </li></ul></ul></ul></ul><ul><ul><ul><li>Non -EU countries: VAT does not applies. </li></ul></ul></ul><ul><ul><li>Trade mark </li></ul></ul><ul><ul><ul><ul><li>Register in EU to protect the mark (should be used in a 5 years period of time) </li></ul></ul></ul></ul>
  23. 24. Start selling in Europe Make your product available online <ul><ul><li>What you have to consider </li></ul></ul><ul><ul><ul><li>Cultural differences </li></ul></ul></ul><ul><ul><ul><li>eCommerce is available in Europe from 1998 since in the US is available since 11 August 1994 (according to the University of North Carolina - the first retail Internet transaction probably took place then). </li></ul></ul></ul><ul><ul><ul><li>More and different payment methods available </li></ul></ul></ul><ul><ul><ul><li>Local online promotion </li></ul></ul></ul>
  24. 25. <ul><li>Your partner will: </li></ul><ul><ul><li>Generate revenue for you </li></ul></ul><ul><ul><li>Market your product and generate brand awareness </li></ul></ul><ul><ul><li>Local support and help you with the localization </li></ul></ul><ul><li>What you have to do: </li></ul><ul><ul><li>Generate an attractive partnership program </li></ul></ul><ul><ul><li>Look for the right partner (or at least A partner) </li></ul></ul><ul><ul><li>Support your partner actively </li></ul></ul>Start selling in Europe Setting up a Distribution Channel
  25. 26. Start selling in Europe Partnership Program <ul><ul><li>Commercial conditions </li></ul></ul><ul><ul><ul><li>Partnership levels & Reseller discounts </li></ul></ul></ul><ul><ul><ul><li>Payment terms </li></ul></ul></ul><ul><ul><li>Partner Training & Support </li></ul></ul><ul><ul><ul><li>Online </li></ul></ul></ul><ul><ul><ul><li>Face to face </li></ul></ul></ul><ul><ul><li>Marketing coop-fund and joint marketing activities </li></ul></ul>
  26. 27. Start selling in Europe Look for Partners <ul><li>Where and how to look for partners: </li></ul><ul><ul><li>Choose a country, if you have a reason to, or go generally </li></ul></ul><ul><ul><li>Local IT events: conferences, trade shows </li></ul></ul><ul><ul><li>Referral from your business partners or clients </li></ul></ul><ul><ul><li>Online – sign up </li></ul></ul>
  27. 28. Start selling in Europe DrWeb.com - Partnership Program
  28. 29. Start selling in Europe DrWeb.com – Look for Partners
  29. 30. Conclusions <ul><li>Going to Europe is not very expensive </li></ul><ul><li>You can go by yourself, but it is more profitable and easy with a partner </li></ul><ul><li>Balance your revenue </li></ul><ul><li>Minimize the business risk </li></ul><ul><li>More attractive for venture capital </li></ul>
  30. 31. <ul><li>Thank you! </li></ul><ul><li>Questions? </li></ul><ul><li>Carmen Sebe </li></ul><ul><li>CEO – Avangate B.V. </li></ul><ul><li>[email_address] </li></ul>
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