How to sell software in Europe

Capitalizing on the European Market Software Industry Conference 17-19 July 2008 Carmen Sebe , CEO / Avangate BV [email_address]

Market overview – why Europe? Europe – a software market as big as the US
What to consider when going to Europe Overcoming the entry barriers
Some ideas on how to generate money from a foreign market
Agenda

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

Market overview Global Software Market Segmentation
Americas region accounts for 42.1% of the global market's value.
European region generates 36% of the global market's revenue.
% Share, by Value Source: Datamonitor

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

Market overview Europe by Country
France is the most lucrative software market in Europe, accounting for 23.7% of the European market's value.
United Kingdom generates an additional 22.2% of the regional market's value.
% Share, by Value Source: Datamonitor

Software Piracy in Europe
The software piracy record in Europe is mixed:
Austria, Finland have the lowest rates Worldwide, 26%
Average in EU – 36%
Central and Eastern European rate 69%
Rates in Russia and Ukraine have experienced the largest decreases in the world, but still very high – around 80%
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 -

Despite it’s late start Europe is now a mature eCommerce market and one of the biggest markets in the World .
A mature market concentrated in Northern Europe (United Kingdom, Germany and the Scandinavian countries) where 60- 80% of Internet users are eShoppers .
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.
eCommerce Opportunities in Europe

eCommerce Opportunities in Europe
A budding market represented by Eastern Europe , with different levels of maturity according to the countries
2008 and 2009 years will be significant for the development of e-commerce in Europe

Opportunities
Europe – a market as big as US
A software market accounting 91.9$ billion
Both mature markets and new markets
IT spending for decreasing the software piracy
High end market
Favorable exchange rate $/€
Entry barriers
Language barriers
Multiple currencies, eased by adoption of the Euro
Differing tax and VAT regimes
Uncertainty over and pending legislation on ecommerce taxation
Cultural differences
Is Europe a good place to be?

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

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

What do I need to sell in Europe? VSO – ConvertXtoDVD - Product Localization

What do I need to sell in Europe? VSO-Software.fr – Website Localization

What do I need to sell in Europe? VSO – ConvertXtoDVD - Product Localization

What do I need to sell in Europe? VSO-Software.fr – Website Localization

What do I need to sell in Europe? VSO-Software.fr - Customer Support

What do I need to sell in Europe? VSO-Software.fr - FAQs

What do I need to sell in Europe? VSO-Software.fr - Tutorials

What do I need to sell in Europe? VSO-Software.fr - eMail

What do I need to sell in Europe? Other things to consider
PRICING :
US $ for the US ; Euros for Europe
Online : to have an eCommerce provider that allows to set prices in different currencies
Channel : to have a price list in Euros

What do I need to sell in Europe? Other things to consider
LEGAL
VAT
EU countries for direct sales :
The end user will pay their country VAT
Should register in an EU country for VAT reimbursement
Non -EU countries: VAT does not applies.
Trade mark
Register in EU to protect the mark (should be used in a 5 years period of time)

Start selling in Europe Make your product available online
What you have to consider
Cultural differences
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).
More and different payment methods available
Local online promotion

Your partner will:
Generate revenue for you
Market your product and generate brand awareness
Local support and help you with the localization
What you have to do:
Generate an attractive partnership program
Look for the right partner (or at least A partner)
Support your partner actively
Start selling in Europe Setting up a Distribution Channel

Start selling in Europe Partnership Program
Commercial conditions
Partnership levels & Reseller discounts
Payment terms
Partner Training & Support
Online
Face to face
Marketing coop-fund and joint marketing activities

Start selling in Europe Look for Partners
Where and how to look for partners:
Choose a country, if you have a reason to, or go generally
Local IT events: conferences, trade shows
Referral from your business partners or clients
Online – sign up

Start selling in Europe DrWeb.com - Partnership Program

Start selling in Europe DrWeb.com – Look for Partners

Conclusions
Going to Europe is not very expensive
You can go by yourself, but it is more profitable and easy with a partner
Balance your revenue
Minimize the business risk
More attractive for venture capital

Thank you!
Questions?
Carmen Sebe
CEO – Avangate B.V.
[email_address]

How to sell software in Europe

by Avangate BV on Jul 25, 2008

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