PAC Webinar - The French IT market is changing. Are You?
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PAC Webinar - The French IT market is changing. Are You?

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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, ...

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.

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PAC Webinar - The French IT market is changing. Are You? PAC Webinar - The French IT market is changing. Are You? Presentation Transcript

  • © PAC 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
  • © PAC Economic and IT Environment IT Challenges for Users Trends & Impact on the IT Market Vendor Landscape Conclusion Agenda 20133
  • © PAC Economic and IT Environment
  • © PAC Economic Situation Europe: GDP Growth in 2013 GDP Growth forecast 2013 20135 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 © PAC 2013!
  • © PAC !"#$%&' ()'*+*' ,&"-#$.' /0'123' 45' /0'1+1' 67#8.' 02'+)0' 9&:7';<'7=&' >&:7&"$'?@";A&' +2'2B)'CA#D$' 00'(2B' BEBF' BE/F' 0EBF' 0E/F' *EBF' *E/F' (EBF' (E/F' 2EBF' 2E/F' BF' /F' 0BF' 0/F' *BF' */F' (BF' (/F' !"#$%&' (&")#$*' +,' -.#/*' 0&1.'23'.4&'5&1.&"$'67"28&' 98#:$' 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% 6 CAGR = 3,2%
  • © PAC IT Challenges for Users
  • © PAC Challenges of the IT management User Survey 2013 8 2013PAC 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 ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... 0 100 0 100 France Worldwide Big challenge Minor challenge No challenge Do not know Share in percentage of the responding companies, n = 139/1,577 ©PAC2013UserSurvey What are the current IT related challenges for your company? Source:SITSI®UserSurvey–France,2013
  • © PAC Evolution of IT budgets User Survey 2013 9 2013PAC Webinar "Topic", "Date" Source:SITSI®UserSurvey–France,2013 2 9 8 14 27 27 5 3 6 5 15 10 France .............................. Worldwide 40 20 0 20 40 60 Share in percentage of the responding companies, n = 139/1,577 Decreased strongly Decreased considerably Decreased slightly Increased strongly Increased considerably Increased slightly Compared with the previous year 2012, how much has the size of the company’s IT budget increased or decreased in 2013? ©PAC2013UserSurvey
  • © PAC Evolution of spending in Application areas User Survey 2013 10 2013PAC Webinar "Topic", "Date" Source:SITSI®UserSurvey–France,2013 50 42 39 30 22 22 20 19 25 23 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) ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ 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 ©PAC2013UserSurvey Considering the following application areas, does your company intend to spend more, about the same or less in the next two years?
  • © PAC !"#$% &"'$% !"!$% !"($% )"*$% &"($% +"($% )")$% !")$% &")$% '")$% #")$% +")$% ,")$% )% +))% !%)))% !%+))% &%)))% &%+))% -."%/&.0%1% .2345678% 925:3;<% =4>6?2>>% @AA<63;:B?>% -C32"% DB?72?7%1% DB<<;EB5;:B?% 06FF<2G;52"% H=%1% H2I2<BAJ2?7% 7BB<>% KB56LB?7;<% =4>6?2>>% @AA<63;:B?>% M23N?63;<% @AA<63;:B?>% =O% 9B<4J2%&)!'%6?%0%PQR% D@SR%!'T!(% 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% 11
  • © PAC !"#$% !"&$% '(")$% *"*$% *"#$% +"!$% '!",$% '(",$% ,",$% (",$% !",$% *",$% )",$% #",$% -",$% +",$% .",$% ,% !%,,,% )%,,,% -%,,,% .%,,,% (,%,,,% (!%,,,% /01234% 5623789:;6% 56<89128=>2=83% ?=21;=8>@67% /38A@>31% 56<89128=>2=83% /=BB;82% /38A@>31% CBBD@>9:;6% E969734362% 5F%G;61=D:67% HI?% J;D=43%!,(*%@6%E%KLM% GCNM%(*O(+% 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% 12
  • © PAC 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 strongStrongVery weak weak Average Competition! 2013 Source:Sitsi®VerticalSectors-MarketInSight-France,2013 13
  • © PAC Trends & Impact on the IT Market
  • © PAC 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 15
  • © PAC 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 201316
  • © PAC 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
  • © PAC Evolution of the Top 100 IT Spenders’ Budgets By budget line 2013 Source: Top 100 IT Spenders in France, July 2013 !"#$%&'()%*# +,-# $./01&%# 2-#!34%&315# 6,-# 71&801&%# 69-# :(*)# ;4%5%).<=# %4)># ??-# !"#$%&'()#*&%+,(#-../#01+#$#2345# !"#$%&'()%*# +,-# $./01&%# 2-# !34%&315# 62-# 71&801&%# 9:-# ;(*)#<4%5%).=># %4)?# ,-# !"#$%&'()#*&%+,(#-./-#01+#$#2345# 18
  • © PAC Vendor Landscape
  • © PAC 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
  • © PAC 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% MarketShare2012in% IT Services Revenue in % of Total Revenue 21
  • © PAC Microsoft Oracle IBM SAP SageEMCHP Dassault Systemes Symantec Adobe Systems 0% 5% 10% 15% 20% 0% 20% 40% 60% 80% 100% MarketShare2012in% Software Revenue in % of Total Revenue Software: Top 10 Providers in France 2013 Source: SITSI® Software – Market View – France, 2013 22
  • © PAC 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: 201323 Application Software Vendors SaaS Vendors
  • © PAC Conclusion
  • © PAC Key Takeaways Market OpportunitiesMarket 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
  • © PAC Questions & Answers
  • © PAC Q&A 2013 Thank you for your attention! We look forward to your questions. 27
  • © PAC 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: f.nassah@pac-online.com Vincent Gélineau Principal Consultant IT Services PAC France M: +33 7 63 23 01 80 E: v.gelineau@pac-online.com Olivier Rafal Principal Consultant Software Markets PAC France M: +33 7 63 23 01 84 E: o.rafal@pac-online.com 28
  • © PAC 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
  • © PAC 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! 201330 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. 30
  • © PAC 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 s.maton@pac-online.com +33 6 34 23 55 22 31