Central and Eastern Europe's Country Profile: Hungary


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Hungary country profile and Hungarian ICT / ITO market profile

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Central and Eastern Europe's Country Profile: Hungary

  1. 1. IT SOURCINGEUROPE<br />Central and Eastern Europe’s Country Profile:<br />Hungary <br />
  2. 2. Area: 93,030 km2<br />Population (est. 2009): 9.906 million<br />Human Development Index (est. 2007): 0.879<br />GDP/capita (est. 2009): 14,499€<br />GDP growth rate (est. 2009): -0.26%<br />IT Outsourcing market value (est. 2009) – 274.8€ million<br />GENERAL DATA<br />
  3. 3. * Based on the 2009 Legatum Institute estimation<br />PROSPERITY INDEX*<br />
  4. 4. PROSPERITY INDEX<br />
  5. 5. <ul><li>Information & Communication Technology (ICT) Market Trends
  6. 6. ICT represents one of the engines of the Hungarian economy, with a relatively high contribution to the country's GDP (around 8%). Although a rather small market, it remains one of the most advanced in Eastern Europe.
  7. 7. Most activities are concentrated around the capital city Budapest, where the largest distributors' headquarters can be found.
  8. 8. The Hungarian ICT distribution system is dominated by resellers and service companies who account for 40% and 45% of the market share respectively, while ICT manufacturers account for only 5%.
  9. 9. The demand in the Hungarian market currently concentrates on desktop and system hosting and operating services, as well as business applications.</li></ul>MARKET TRENDS<br />
  10. 10. <ul><li>Hungary ranks top for per capita ICT expenditure and ICT expenditure as a percentage of GDP in the CEE region, while ranking near the bottom of the EU innovation rating, according to the 2009 European Innovation Scoreboard by PRO Inno Europe. </li></ul>MARKET TRENDS<br />
  11. 11. <ul><li>IT Outsourcing Market Trends
  12. 12. Hungarian IT services market has reached almost EUR 802 million in Q1 2010, up 21% from 2007, which makes more than 40% of the total IT market value.
  13. 13. Hungarian IT market has developed a strong project services segment, which accounts for nearly 60% of the general service offering. Project services market has grown at a 10.7% CAGR in recent months, driven by local and central administration projects and ERP implementation in small and medium enterprise sectors.
  14. 14. The end-to-end ITO sector is over-concentrated with top ten market leaders accounting for almost 80% of the market. It makes significant barriers in the way of new market entrants, forcing them to look out for their own niche to survive in the competition. Application hosting is one of such niches. </li></ul>MARKET TRENDS<br />
  15. 15. <ul><li>The demand in the Hungarian IT outsourcing market concentrates on desktop and system hosting and operating services. Additionally, Hungary has extensive expertise in game and process control software development. This trend is explained by the IT industry’s focus on software projects with predictable return on investment (ROI).
  16. 16. Captive outsourcing (ODC/NDC) is only beginning to gain ground in Hungary’s IT sector.
  17. 17. As of January 2010, Hungary’s net wages in all industries, including IT, increased by 12.9% in twelve months, with real wages up 6.1% year on year (Hungary’s Central Statistical Office, 2010). The rising salaries in the national IT market make outsourcing to Hungary a way more expensive than to Ukraine or Poland.</li></ul>MARKET TRENDS<br />
  18. 18. THANK YOU<br />by:<br />IT Sourcing Europe Limited 2010<br />www.itsourcing-europe.com<br />Info(at)itsourcing-europe.com <br />