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Transcript of European It Market Outlook 2009 to 2010
8/8/2019 European It Market Outlook 2009 to 2010
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Making Leaders Successul Every Day
Agst 28, 2009
Eopean IT Maket Otook:2009 To 2010b Ane H. Bates an Pete O’Nei
o Veno Stateg Poessionas
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© 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Inormation is based on best availableresources. Opinions refect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar,and Total Economic Impact are trademarks o Forrester Research, Inc. All other trademarks are the property o their respective companies. To purchase reprints o this document, please email [email protected]. For additional inormation, go to www.orrester.com.
Fo Veno Stateg Poessionas
Includes a market sizing orecast and data rom Business Data Services
ExEcuTIVE SuMMAry
Te European market or business-purchased technology goods and services (measured in euros) will
decline by 6.3% in 2009, and be slow to recover in 2010 with only 4% growth. In both regards, it will lag
behind the US tech market, which will have a smaller drop in 2009 and stronger growth in 2010. Te main
reason? Te European economic recession has turned out to be deeper than the US recession, with
Europe’s downturn starting later and probably lasting into 2010. All categories o I purchases will be down,
with computer equipment and communications equipment being especially weak. Te UK, Germany, and
France continue to be the largest European I markets, with a 55% share o the European market. Te UK,
Spain, Ireland, Iceland, and Central European countries will have worse perormance than Europe as a
whole, and no European country will avoid a down year. For I vendors, other markets — especially the
US, but also Asia/Pacic — will present better opportunities in 2009 through 2010 than Europe.
TABlE OF cONT ENTSEuropean IT Market Will Drop In 2009 And Lag
Behind US IT Market
Behind The Forecast: Weak Indicators For
2009 European IT Purchases
European IT Purchases B Countr: Economic
Growth Drives IT Market Growth
rEcOMMENdATIONS
Focus In 2009 on Specic Countr
Opportunities For Diferent Products
AlTErNATIVE VIEw
European IT Purchases In 2009 Turn Out to Be
Flat Or Just Down A Little
Supplemental Material
NOTES & rESOurcESFoeste eviee ont teh investment
ata om the Oganization o Eonomi
coopeation an deveopment as e as ata
om 46 venos, ining Aente, AcS,
Aate-lent, Atos Oigin, Avaa, BeaingPoint,
capgemini, ciso Sstems, compte Assoiates,cSc, de, EdS, EMc, Eisson, Fjits, Getonis,
Heett-Paka, Hitahi, IBM, Inoss
Tehnoogies, lenovo, Miosot, Motooa, NEc,
Nokia, Note Netoks, Oae, SAP, Siemens
SBS, Sn Miosstems, Smante, T-Sstems,
Tata constan Sevies, uniss, an wipo.
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Eopean IT Maket Otook: 2009 To 2010
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2
EUROPEAN IT MARKET WILL DROP IN 2009 AND LAG BEHIND US IT MARKET
From 2005 through 2007, the European I market grew at about the same rate as the US I
market. However, in 2008, and especially in 2009, growth in purchases by European businesses
and governments o computer equipment, communications equipment, soware, I consulting
and integration, and outsourcing services has been and still is lagging behind the US tech market.
Measured in euros, I purchases in Western and Central European countries will shrink by 6.3% in
2009, ollowing a decline o 0.8% in 2008. While the US I market will also all in 2009, the decline
in US dollars will be less, -5.1%. Te US I market will also have a stronger recovery in 2010, with
projected growth o 8% (in US dollars) compared with 4.0% in Europe (in euros) (see Figure 1-1).
Te deeper decline in the European I market is mostly due to the deeper recession that Europe is
experiencing. Te Organization or Economic Co-operation and Development (OECD) projects
that the collective real GDP o the euro-zone countries o Europe (measured in euros) will decline
by 4.8% in 2009.1
Te US economy is also in recession, but the 2.8% decline in US real GDPprojected or 2009 is not as bad as the drop in the European economy. While the main cause o
the US downturn was the nancial crisis rom the collapse o the housing bubble and subprime
mortgages and a resulting downturn in consumer spending and business investment, Europe had
its own vulnerabilities. Te UK, Ireland, Spain, and other countries had their own housing bubbles
that burst; many European banks turned out to be exposed to toxic securities and Central European
debt; and export-oriented European economies like Germany and Scandinavia have suered as their
exports to the US, Middle East, and Asia dried up. Moreover, Europe will be slower to recover than
the US — according to OECD projections, the US real GDP will grow by 0.9% in 2010, while the
European economy will show no growth (see Figure 1-2).
Declines In European Economic Growth Mean Reduction In IT Purchases
We project that the countries o Western and Central Europe will purchase €297 billion (US$402
billion) o computer equipment, communications equipment, soware, and consulting and
outsourcing services in 2009.2 Te US I market will be about one-third bigger, at €390 billion
(US$526 billion), even though the European economy remains about 20% larger than the US
economy (see Figure 2).
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Eopean IT Maket Otook: 2009 To 2010
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Figure 2 Mease In doas O Eos, The Eopean IT Maket lags Behin The uS IT Maket
Source: Forrester Research, Inc.46672
Growth in European IT purchases in dollars is much stronger in 2007 and 20082-2
-15%
-10%
-5%
0%
5%
10%
15%
20%
2006 2007 2008 2009† 2010†
European IT purchases in euros is still smaller than US IT purchases2-1
United States Western and Central Europe*
United States Western and Central Europe*
IT purchases of goods and services
(euros billions)
% change from prior year
United States
Western and Central Europe*
6.6%
6.1%
-1.9%
7.0%
-4.8%
-0.8%
3.5%
-6.3%
11.7%
4.0%
Source: OECD and Forrester Research for GDP estimates and forecasts; Forrester Research for ITpurchases estimates and forecasts
*Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Spain,Slovakia, Slovenia, Switzerland, Sweden, and the UK.
†Forrester forecast
2006 2007 2008 2009† 2010†
Western and Central European GDP is greater than US GDP in euros2-3
Nominal GDP(euros billions)
IT purchases of goods and services(percentage change
from prior yearin US$ billions)
€403 €396 €377 €390 €435
€298 €319 €317 €296 €309
€10.5
€11.0
€10.1
€12.8
€9.7
€13.0
€10.4
€12.1
€10.8
€12.3
United States
Western and CentralEurope*
A spreadsheet with additional data is available online.
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Eopean IT Maket Otook: 2009 To 2010
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5
All Categories O Tech Face Sharp Declines In 2009, With Sotware Leading A 2010 Upturn
Sad to say, there are no real bright spots in 2009 in the dierent categories o tech purchases in
Europe. Soware (-5.4%), I consulting and integration services (-4.2%), and I outsourcing
(-5.7%) will decline a bit less than computer equipment (-6.6%), or communications equipment
(-9.2%), but all will all by 4% or more in euros, and by 11% or more in US dollars. Te outlook
turns brighter or 2010, with soware purchases setting the pace with a 5.5% growth. By category,
we expect:
· Computer equipment purchases will be down in 2009 and lag in 2010. Purchases o computer
equipment will drop by 6.8% in 2009, and grow by only 1.4% in 2010, going rom €83 billion in
2008 to €78 billion in 2009 and €79 billion in 2010. Adoption o server virtualization soware,
lower-cost netbooks, and CIO tendencies to cut back these kinds o capital investments in a
downturn will combine to keep computer equipment on the slow track.
· Communications equipment purchases will drop in 2009 and creep back in 2010. Tis
category o I purchases has done relatively well in recent years compared with the growth in
other categories, due to higher rate o adoption o cell phones in Europe and 3G cellular systems.
However, the recession is hurting this category o capital investment in 2009, pulling levels o
investment down by 9.2% to €57 billion in 2009 rom €63 billion in 2008, beore rising by 4% to
€60 billion in 2010.
· Sofware purchases will all by 5.4% in 2009, but bounce back in 2010 with 5.5% growth.
otal soware purchases will shrink rom €72 billion in 2008 to €68 billion in 2009. License
soware revenues will bear the brunt o decline, For example, Oracle’s European application
license revenues in US dollars were down 12% and 11%, respectively, in the rst two calendarquarters o 2009, and SAP’s application license revenues on a comparable basis were down 38%
(-29% in euros).3
· I consulting and systems integration services purchases will drop by 4.2% in 2009.
Tese categories o I services will decrease rom €57 billion in 2008 to €54 billion in 2009.
Consulting services or I strategy, business process change, security, and SOA systems design
will hold up relatively well, but systems integration and application integration project work will
decline in line with (but lagging) the decline in licensed application soware purchases. Project
work will revive in 2010 with the return to soware investment.
· I outsourcing services purchases will decline by 5.7% in 2009. As in the US, I outsourcing
is suering as much as — i not more than — I consulting and systems integration services.
Te weaknesses in European I outsourcing are due to shis to smaller-scale outsourcing
projects, lower price points as vendors cut rates, and a revival o insourcing as European
companies with ull-time sta commitments bring back in house I activities that had been
outsourced (see Figure 3).
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Eopean IT Maket Otook: 2009 To 2010
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Figure 3 A categoies O Eopean IT Phases wi Fa In 2009
Source: Forrester Research, Inc.46672
Western and Central European IT purchases forecast in US$ billions3-2
Western and Central European IT purchases forecast in billions of euros3-1
2006 2007 2008 2009* 2010*
Computers and peripheral equipment
Communications equipment
Software
IT consulting and systemsintegration services
Computers and peripheral equip.
Communications equipment
Software
IT outsourcing
Total
Total
% change from prior year
% change from prior year
(numbers have been rounded)
*Forrester forecast
6.7% 7.3% -2.2% -6.6% 1.4%
10.6% 6.8% 0.1% -9.2% 4.0%
9.5% 11.2% 0.5% -5.4% 5.5%
3.0% 4.0% -1.3% -5.7% 5.2%
Computers and peripheral equip.
Communications equipment
SoftwareIT consulting and systems
integration services
6.8% 7.0% -0.8% -6.3% 4.0%
7.3% 17.1% 5.0% -14.0% 4.7%
11.2% 16.5% 7.5% -16.4% 7.5%
10.1% 21.3% 7.9% -12.9% 9.0%
3.6% 13.7% 6.1% -11.8% 8.4%
7.4% 16.8% 6.5% -13.7% 7.4%US$ per euro $1.26 $1.37 $1.47 $1.36 $1.40
€ 80€ 85 € 83
€ 78 € 79
€ 59 € 63 € 63 € 57 € 60
€ 64 € 71 € 72 € 68 € 72
€ 55 € 57 € 57 € 54 € 57
€ 298€ 319 € 317
€ 297 € 309
2006 2007 2008 2009* 2010*
$100$117 $123
$106 $111
$74$86 $93
$78 $83
$81$98 $106
$92 $100
$69 $79 $84 $74 $80
$375$438 $466
$402$432
IT outsourcing
Computers and peripheral equipment
Communications equipment
Software
IT consulting and systemsintegration services
IT outsourcing
IT consulting and systemsintegration services
3.0% 4.1% -1.2% -4.2% 4.9%
€ 41 € 42 € 42 € 39 € 41
$51 $58 $61 $53 $58
IT outsourcing 3.6% 13.6% 6.0% -13.2% 8.7%
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Eopean IT Maket Otook: 2009 To 2010
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Measured in US dollars — which matters or US vendors — the European market picture is even
bleaker. With the US dollar despite recent weakness still well above its value against the euro in the
rst hal o 2008, we expect: 14% decline in dollar-denominated purchases o computer equipment
in 2009, 16% drops in purchases o communications equipment, a 13% decline in sowarepurchases, and a 12% all in I services and outsourcing.4
BEHIND THE FORECAST: WEAK INDICATORS FOR 2009 EUROPEAN IT PURCHASES
Our orecast o sharp declines in I purchases in Europe is made against a backdrop o planned I
budget cuts in Europe, as well as declines in vendor revenues rom the larger EMEA market coming
into 2009.
European CIOs Are Cutting Their 2009 IT Budgets B 3% Or More
Forrester surveyed I decision-makers in France, Germany, and the UK between February and May 2009 about their planned 2009 I budget increases. On average across these three countries, the I
decision-makers at the enterprises we surveyed reported that they planned to cut their I operating
budgets by 3.2% and their I capital budgets by 1.8%. UK enterprises were the most cautious,
planning to cut their 2009 I operating budgets by 6.5% and their I capital budgets by 2.9%.
French and German enterprises said that they would cut their I operating and capital budgets by
between 1.2% and 1.8%. In practice, we expect that most European countries will spend even less
than their reduced I budgets, with the worse-than-expected European recession causing rms to
cut their actual I spending even urther (see Figure 4).
EMEA Revenues For IT Vendors Grew Weakl In 2007
Forrester tracks the quarterly revenues o 49 leading I vendors in Europe, the Middle East, and
Arica (EMEA). Tese revenues in euros ell each quarter in 2008 at -1% to -3%, slid urther to a 6%
decline in Q1 2009, and will probably drop by 5% in Q2 2009, when all earnings are announced. Te
outlook gets worse in the second hal, as CIOs start reecting the worse economic outlook o the
rst hal o the year in their second hal purchase plans. We expect that vendors’ European revenues
will all by 6% in Q3 2009 and by 2% in Q4 2009. Computer equipment vendor revenues have
already been in sharp decline since Q3 2008, with declines o -10% in Q3 2008, -11% in Q4 2008,
and -18% in Q1 2009, with similar rates o decline or the rest o 2009. Communications equipment
vendor revenues ell more moderately in late 2008 (-3% in Q3, -5% in Q4) and Q1 2009 (-7%), but
the declines will accelerate in the remainder o 2009, with -13% in Q3 2009 and -17% in Q4 2009.
Soware vendor revenues in Europe held up better, remaining slightly positive through Q1 2009 andprobably into Q2 2009, but will all by Q4 2009. Similarly, I consulting and outsourcing services,
while at to down slightly so ar, will deteriorate by Q4 2009 (see Figure 5-1).
Measured in US dollars, the pattern o deterioration in vendors’ European revenues is similar but
worse through Q3 2009. However, with the dollar expected to resume its decline against the euro in
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the second hal o 2009, dollar-denominated declines in vendor European revenues will actually be
less in Q4 2009 than the euro-denominated declines (see Figure 5-2).
Most multinational I vendors or service providers have already segmented their EMEA territoriesinto “stable” or more mature geographic markets and “emerging” or growth markets. Tis enables
them to apply the most suitable sales approach and management expectations to each target market.
Western Europe is usually considered more mature while much more growth is budgeted or Eastern
Europe and the Middle East. Strategy proessionals may need to review these decisions, though,
based on the data provided in this report.
Figure 4 Eopean Entepises Pan To ct IT Bgets In 2009, with Ata cts Even deepe
Source: Forrester Research, Inc.46672
Germany
-1.5%-1.2%
-6.5%
-2.9%
-1.8%-3.7%
UK
France
Average
Source: Enterprise And SMB Global IT Budgets And Spending Survey, Q2 2009Note: Germany and France in euros; UK in pounds sterling
*Responses to Forrester’s Enterprise And SMB Global IT Budgets And Spending Survey, Q2 2009†Forrester forecast for how much IT purchases (capital investment plus expensed purchases of computerequipment, communications equipment, software, and IT consulting and outsourcing services) will actuallygrow during the year.
Planned increase in ITcapital budgets in 2009*
Actual likely increasein IT purchases in 2009†
Three largest European IT markets
Planned increase in IToperating budgets in 2009*-2.9%
-5.4%
-1.8%-1.8%
-2.9%
-3.2%
“By what percentage do you estimate your IT operating budget andIT capital budget will change in 2009?”
Base: 487 German IT budget decision-makers, 365 UK IT budget decision-makers,and 467 French IT budget decision-makers
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Eopean IT Maket Otook: 2009 To 2010
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Figure 5 IT Venos’ EMEA revenes State 2009 In Negative Teito
Source: Forrester Research, Inc.46672
IT vendor revenues from EMEA in euros fell by 6% in Q1 2009, with similar drops ahead in Q2 andQ3 2009
5-1
Total vendor revenues (€ billions)
Q3 2008 Q4 2008 Q1 2009 Q2 2009* Q3 2009* Q4 2009*
Computers and peripheral equipment
IT services and outsourcingSoftwareCommunications equipment
Computers and peripheral equip. -10% -11% -18% -11% -12% -15%
Communications equipment -3% -5% -7% -9% -13% -17%
Software 3% 5% 4% 3% 3% -8%
IT services and outsourcing -2% 0% -3% -4% -3% -9%
Total -3% -2% -6% -5% -6% -12%
% change from prior year
A spreadsheet with additional data is available online.
€ 8.4
€ 8.9
€ 7.3 € 7.3 € 7.4€ 7.6
€ 9.8
€ 11.3
€ 8.5 € 8.8 € 8.5 € 9.4
€ 7.4€ 9.0
€ 7.4 € 8.3 € 7.6 € 8.3
€ 17.9 € 19.4 € 17.7 € 17.3 € 17.3 € 17.6
€ 43.5
€ 48.6
€ 41.0 € 41.6 € 40.8€ 42.8
(numbers have been rounded)
Base: 49 large, global IT vendors
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Figure 5 IT Venos’ EMEA revenes State 2009 In Negative Teito (cont.)
Source: Forrester Research, Inc.46672
IT vendors’ EMEA revenues falling more rapidly as dollar strengthened5-2
Computers and peripheral equipment
IT services and outsourcingSoftwareCommunications equipment
Computers and peripheral equip.
Communications equipment
Software
IT services and outsourcing
Quarterly rates (US$ billions)
Q3 2008 Q4 2008 Q1 2009 Q2 2009* Q3 2009* Q4 2009*
Total
% change from prior year
-1% -19% -28% -23% -21% 9%
6% -14% -19% -21% -22% -12%
13% -5% -9% -10% -7% 0%
8% -9% -15% -17% -12% -2%
6% -11% -18% -18% -15% -5%
Base: 49 large, global IT vendors(numbers have been rounded)
US$ per euro $1.51 $1.32 $1.31 $1.36 $1.35 $1.40
$12.7 $11.7
$9.6$9.9 $10.0
$10.6
$14.7 $14.9
$11.2$12.0 $11.6
$13.2
$11.1 $11.9$9.7 $11.4 $10.4
$11.8
$26.9 $25.6$23.2 $23.5 $23.7 $25.0
$65.5 $64.1
$53.6$56.7 $55.6
$60.7
Source: 49 large global IT vendors’ 2008 and 2009 quarterly financial reports
*Forrester forecast
EUROPEAN IT PURCHASES By COUNTRy: ECONOMIC GROWTH DRIVES IT MARKET GROWTH
While Western and Central Europe have some o the institutions and trappings o being a single
political and economic entity, this recession and divergent policy reactions to it have shown
that Europe is still a collection o 28 dierent countries.5 Te European Union itsel has had
no coordinated policy or ghting the recession, with each country pursuing its own economic
policies (within the limits set or the Euro-bloc countries by the European Central Bank’s monetary
policy). And each o the European countries have dierent degrees o dependence on exports, roles
or central governments in the economy, dierent experiences o housing bubbles and collapses,dierent labor policies, and dierent exposure to nancial market strains.
One result is a wide divergence among the countries o Western and Central Europe. While all
countries in Western and Central Europe will experience a decline in real GDP in 2009, some
countries like Greece, Norway, and Poland will have relatively mild downturns (based on OECD
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orecasts). Other countries like Iceland, Ireland, and the Baltic states o Estonia, Latvia, and
Lithuania will see much more painul downturns o 7% or more. O the major European economies,
Germany, Italy, Sweden, and the Netherlands ace the biggest declines o 6.1%, 5.5%, 5.5%, and 4.9%,
respectively. Te UK and Spanish economies will drop by 4.3% and 4.2%. France and Switzerlandwill experience 3% and 2.7% declines in real GDP (see Figure 6-1).
Te economic environment matters to the tech market because economic growth is one o the three
actors that we use to orecast the growth rate in the tech markets o dierent European countries.
However, because I buyers and I vendors operate in a world o current or nominal values, not
the ination-adjusted world o real GDP, we use growth in nominal GDP as one o the key variables
in our orecast model or predicting I purchases at the country level. Te three key variables that
drive our orecasts or tech purchases in each o the European country markets are:
1. Nominal GDP growth is a key determinant. Extensive research that we have done in the US
and in other countries shows that the growth in nominal GDP is the best single predictor o
growth in business and government purchases o technology goods and services. In most
European countries, nominal GDP declines are slightly less than real GDP declines, thanks
to ination rates o 1% to 2%. However, Germany, Norway, and Ireland are experiencing
actual deation, making nominal GDP even lower than real GDP. On the other hand, Poland,
Hungary, and Iceland have more serious ination problems (mostly due to depreciation o their
currencies against the euro), so their nominal GDP growth is quite a bit better than their real
GDP growth rates (see Figure 6-2).
2. Financial market strain is a second key actor shaping the tech market. Tis recession is
unique among post-war downturns in the degree to which a collapse o unctioning nancialmarkets has direct business investment in technology. For example, both the US and Canada are
experiencing similar recessions, with commensurate growth rates in nominal GDP. However,
the US tech market has dropped ar more than the Canadian I market.6 Why? Because Canada
has a normally unctioning banking system, while the US nancial market is still under strain
rom collapses o Bear Stearns and Lehman Brothers and the orced rescues o others. Te result
is that US companies are hoarding cash and slashing capital investment — including tech capital
investment — while Canadian companies are simply cutting back on investment. In Europe, the
UK, Iceland, and Ireland have had similar nancial market collapses to that o the US, while
Belgium, Germany, Sweden, and the Baltics have rescued troubled nancial institutions. As
a result, tech investment is down more than their declines in nominal GDP would imply. Te
nancial institutions, even those that have had to be rescued by governments, are also hoarding
cash — or at least credit extensions — and this in an additional inhibitor to capital investments.
3. ech-intensiveness causes some countries to drop sharply and rebound equally. In our
January 2009 Global I Market Outlook, we identied 12 countries that used technology more
intensively relative to GDP than other countries. Six o the countries in this “tech 12” group
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were European countries: Denmark, Finland, the Netherlands, Sweden, Switzerland, and the
UK. Te I markets in these countries will tend to behave similarly to that in the US, with big
cutbacks in the downturn but also bigger rebounds in the upswings (see Figure 7).
Figure 6 Man Eopean conties wi See deines In rea GdP O 4% O Moe In 2009
Source: Forrester Research, Inc.46672
2010†
A spreadsheet with additional data is available online.
Real GDP Growth
Ireland, Iceland, and Baltics will have biggest declines6-1
-1.0%0.8%
-0.4%0.6%
-4.0%0.1%
-1.3%0.3%
-9.8%-1.5%
-4.7%0.8%
-4.5% -0.5%-4.2% 1.4%
-6.1%-2.2%
-5.0% 3.1%-2.7%
1.4%-4.0%
-0.4%-10.0%
-3.0%-12.0% -2.0%
-7.0%-0.8%
-10.0%-1.0%
-1.2% 3.2%
Norway*
Poland*
Denmark*
Greece
Ireland
Finland
PortugalCzech Republic*
Hungary*
Slovakia*
Slovenia*
Luxembourg
Lithuania*
Latvia*
Iceland*
Estonia*
Other Western andCentral Europe*
Germany
UK*
France
Italy
SpainNetherlands
Switzerland*
Belgium
Sweden*
Austria
-6.1% 0.2%
-4.3% 0.0%
-3.0% 0.2%
-5.5%0.4%
-4.2%-0.9%
-4.9%-0.4%
-2.7%-0.2%
-4.1%-0.5%
-5.5%0.2%
-4.3% -0.1%2009†
Total Western and CentralEurope in euros*
-4.0%-0.3%
*UK in pounds sterling; Switzerland in Swiss francs; Sweden in krone; Norway in krone; Poland in zlotys;Denmark in krone; Czech Republic in korunas; Hungary in Forints; Slovakia in korunas; Slovenia in tolars;Lithuania in litas; Latvia in lats; Iceland in krone; Estonia in kroons; and all others in euros.
†OECD Forecast, June 2009
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Eopean IT Maket Otook: 2009 To 2010
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Figure 7 Fo Ties O Eopean conties In Thei Teh-Intensiveness
Source: Forrester Research, Inc.46672
The UK, Belgium, and Sweden come closest to US levels of tech investment relative to GDP7-1
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
1991 1995 2000 2005 2010*
Business and government investment in technology as a percentage of GDP
European countries ranked by their 2008 ratio of technology investment to GDP7-2
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
1991 1995 2000 2005 2010*
Business and government investment in technology as a percentage of GDP
Source: OECD, “Investment Data and Shares of ICT Investment in GDP and Total Non-residential GFCF,”January 8, 2008; Forrester estimates for 2005 to 2008 and forecasts for 2009 to 2010
*Forrester forecast
Tier 2: Average for Denmark, Finland,the Netherlands, and Switzerland
Tier 1: Average for Belgium, Sweden,and the UK
Tier 4B: Central Europe, Luxembourg,and Iceland
Tier 3: Average for Austria, France,Germany, Greece, Portugal, and Spain
Tier 4A: Average for Ireland and Italy
United States
United Kingdom
Belgium
Denmark
Netherlands
Switzerland
Sweden
Greece
Spain
France
Germany
Austria
Finland
Ireland
Italy
Portugal
A spreadsheet with additional data is available online.
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Eopean IT Maket Otook: 2009 To 2010
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The UK, German, And France Dominate, With The UK Market Down The Most
What does the breakout o I purchases look like by countries?
· Germany, the UK, and France represent 55% o the European I market. As a result o the
cutbacks in UK tech purchases due to the UK recession and nancial crisis, the UK I market
will slip into second place behind Germany in 2009, beore reclaiming its lead position in 2010.
Te UK market or I goods and services measured in euros will drop by 12% in 2009 to €57.4
billion. Te German I market at €57.5 billion will all by a more modest 3% in 2009. France
remains the third largest I market in Europe at €49.4 billion in 2009, down 3% rom 2008.
· Spain, Italy, and the Netherlands constitute about 22% o the European I market . Tese
three countries will have between €27 billion and €18 billion o I purchases in 2009. Te
Netherlands and Italy will drop by 4% measured in euros while Spain’s I market will shrink by
6%, all in line with the drops in their nominal GDP.
· Sweden, Switzerland, Denmark, and Belgium make up about 12% o the European I market.
Each will have about €7 to €12 billion o I purchases in 2009. Measured in euros, Sweden will
drop by 16% to €9.7 billion, while Belgium will all by 6% to €8.8 billion. In both cases, nancial
market strains add to weak economies. Switzerland at €11.7 billion will see a 1% decline, while
Denmark at €7.2 billion will see a small decrease o 2%.
· Te other 18 countries make up 10% o the European I market. Te I markets in Poland
and Iceland when measured in euros will drop by 26% and 30%, respectively, with the Czech
Republic alling by 20%; Hungary by 21%; Latvia by 19%; Lithuania by 17%; and Norway,
Ireland, Slovakia, Slovenia, and Estonia by 10% to 13%. I markets in Austria, Finland, Greece,Portugal, and Luxembourg will decline by lesser amounts (see Figure 8).
· Te dollar’s strength causes dollar-denominated declines to be much greater. With the US
dollar so ar in 2009 remaining well above its exchange rates with all European currencies in
most o 2008, the US values or I purchases in almost all European markets will be at least 7%
lower in 2009 than in 2008, with some markets down by as much as 32% to 35%.
· Measured in their own currencies, the UK, Sweden, Switzerland, and others do better. In
their own currencies, the UK market will be down 5% in 2009, the Swedish market down 6%,
and the Swiss market down 5%. Denmark and Norway will all by 3%, but the central European
I markets will slip by 8% to 10%.
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Eopean IT Maket Otook: 2009 To 2010
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Figure 8 The uK, Geman, An Fane Ae lagest Eopean IT Makets
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
Total IT purchases(billions of euros, 2009 forecast)
% change from prior year
€ 49.8
€ 44.3
€ 43.0
€ 24.2
€ 18.8
€ 15.5
€ 10.2
€ 8.4
€ 8.5
€ 5.2
€ 4.4
€ 1.9
€ 6.5
€ 4.4
€ 1.5
€ 4.9
€ 2.5
€ 1.2
€ 0.7
€ 0.5
UK
Italy
Germany
France
Spain
Switzerland
Belgium
Sweden
Austria
Norway
Poland
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
Slovakia
Netherlands
2009*
-2.9%
-13.1%
-2.9%
-4.3%
-6.1%
-4.8%
-1.1%
-6.2%
-16.8%
-4.3%
-11.8%
-26.3%
-1.9%
-2.7%
-10.5%
1.0%
-7.2%
-20.3%
-20.9%
-12.2%
2010*
2%
4%
5%
2%
3%
7%
2%
6%
7%
3%
5%
2%
3%
6%
0%
5%
3%
4%
8%
5%
European Computer Equipment Purchases Will Shrink B 7% In 2009
Te ranking o the country markets or computer equipment in Western and Central Europe ollows
that o overall I purchases, though Norway makes it into the top 10 markets instead o Austria.
Most countries will have rates o decline in purchases o this category that are between 2% and 5%
measured in euros. Te UK, Sweden, Norway, Poland, and the other central European countries
make double-digit rates o decline measured in euros because o the strength o the euro against
their currencies. Among the euro-zone countries, Belgium and Ireland will have the biggest declines,while Denmark, Greece, and Finland will have small declines, no declines, or actual increases (see
Figure 9).
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Eopean IT Maket Otook: 2009 To 2010
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Figure 9 lagest Eopean Makets Fo compte Eqipment Ae Geman An The uK
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
Computer equipment purchases(billions of euros, 2009 forecast)
€ 14.8
€ 15.7
€ 8.4
€ 6.5
€ 5.3
€ 4.9
€ 2.2
€ 4.5
€ 2.6
€ 2.1
% change from prior year
UK
Italy
Germany
France
Spain
Netherlands
Switzerland
Belgium
Sweden
Austria
Norway
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
Slovakia
€ 0.3
€ 3.2
€ 1.8
€ 0.6
€ 0.4
€ 1.0
€ 0.3
€ 0.1
€ 0.1
2009*
-4%
-11%
-2%
-5%
-4%
-3%
-4%
-7%
-22%
-3%
-11%
-32%
-1%
0%
-9%
8%
-4%
-25%
-26%
-18%
2010*
-1%
-1%
1%
-1%
0%
11%
2%
6%
12%
2%
4%
2%
1%
5%
-4%
-5%
1%
4%
9%
5%
Poland
€ 2.9
European Purchases O Communications Equipment Will Shrink B 9% In 2009
In the rankings o the top country markets or European purchases o communications equipment
in 2009, Germany, Italy, Spain, and France have the our largest markets, with the UK in h place,
and Germany and Italy having the top two positions. Greece and Finland make it into the top 10
European markets or communications equipment. Greece has been investing in communications
equipment to support both broadband Internet service and expanding wireless services, and in
Finland thanks to the inuence o Nokia on Finnish I habits, businesses spend much less on
computer equipment than they do on communications equipment. Spain, the Netherlands, Belgium,
Austria, and Ireland among the euro countries will see declines in purchases o 8% or more in 2009,
while Germany, France, Italy, and Greece will see lesser drops. Te UK, Sweden, and many o the
Central European countries will have declines measured in euros o 20% or more, but the decreases
will be more moderate in their own currencies (see Figure 10).
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Eopean IT Maket Otook: 2009 To 2010
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Figure 10 lagest Eopean Makets Fo commniations Eqipment Ae Geman An Ita
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
Communications equipment purchases(billions of euros, 2009 forecast)
% change from prior year
UK
Italy
Germany
France
Spain
Netherlands
Switzerland
Belgium
SwedenAustria
Norway
Poland
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
2009*
€ 9.8
€ 6.7
€ 6.9
€ 8.6
€ 7.6
€ 3.1
€ 2.8
€ 1.8
€ 1.1€ 1.0
€ 0.2
€ 0.5
€ 0.3
€ 2.1
€ 0.3
€ 1.6
€ 1.4
€ 0.5
€ 0.3
€ 0.2Slovakia
-4%
-21%
-7%
-5%
-10%
-9%
-2%
-8%
-20%
-10%
-15%
-27%
-1%
-6%
-9%
-7%
-10%
-20%
-21%
-11%
2010*
2%
4%
6%
3%
4%
6%
1%
5%
10%
6%
7%
1%
1%
8%
-4%
6%
4%
2%
7%
3%
European Purchases O Sotware Will Shrink B 5% In 2009
For Europe as a whole, purchases o soware products and spending on maintenance and
subscription ees will decline by 5% in 2009, with license revenues or new soware down by 10%
or so. For soware, the UK and France are tied as the largest country markets in Europe, with
projected 2008 revenues o €15 billion, a 12% drop in euros or the UK (-5% in pounds sterling),
and a 2% decrease or France rom 2008 levels. Germany, despite being the home country or
soware giant SAP, comes in third with €10.4 billion in revenues, a 1% decline rom 2008. Italy and Spain, while coming in ourth and h in the European soware market, have a smaller share
(13%) o that market than they do o the total I purchases market (16%). Te Nordic countries o
Denmark, Finland, Norway, and Sweden will have €7.3 billion in soware purchases in 2009, which
would make them collectively almost as big a market or soware as Italy and Spain combined, or o
Germany alone. Te Netherlands and Switzerland make up the rest o the top 10 (see Figure 11).
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Eopean IT Maket Otook: 2009 To 2010
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Figure 11 lagest Eopean Makets Fo Sotae, with The uK An Fane Ahea O Geman
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
Software purchases(billions of euros, 2009 forecast)
% change from prior year
UK
Italy
Germany
France
Spain
Netherlands
Switzerland
Belgium
SwedenAustria
Norway
Poland
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
Slovakia
€ 10.4
€ 15.2
€ 15.2
€ 4.5
€ 4.1
€ 3.8
€ 2.7
€ 1.3
€ 3.0
€ 1.1
€ 0.4
€ 0.5
€ 2.0
€ 0.4
€ 0.3
€ 1.9
€ 0.1
€ 0.3
€ 0.2
€ 0.1
2009*
-1%
-12%
-2%
-4%
-3%
-5%
4%
-5%
-13%
-3%
-14%
-26%
-3%
0%
-14%
6%
-1%
-18%
-19%
-9%
2010*
2%
9%
7%
-1%
0%
7%
1%
10%
7%
2%
10%
4%
7%
5%
7%
6%
1%
6%
10%
8%
European Purchases O IT Consulting And Sstems Integration Services Will Shrink B 4%
Forrester last published a orecast or the European I consulting and outsourcing market in 2006.7
While that report has not been updated, we have adjusted the data in that report based on trends
or soware investment (since systems integration work or soware is the largest category o
I services spending) in each market as well as overall trends or I services vendor revenues in
Europe, Te market will be €54 billion in 2009, down 4% rom €57 billion in 2008. Germany is the
largest European market or consulting and systems integration services, ollowed by France, with
the UK a distant third. Te German and French markets or I services will slip by 2% in 2009; the
UK market will drop by 12% in euros, but by 4% in pounds sterling. Italy and the Netherlands are
the next largest markets or project-based I services. As with soware, Switzerland and the Nordic
countries have a disproportionate share o the European I services market at 13%, while Spain is
under-represented. Most European countries will cut their purchases o I consulting and systems
integration services by 2% to 3%. Te exception will be the Central European and Baltic countries,
where cutbacks are likely to be 15% or more (see Figure 12).
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Figure 12 lagest Eopean Makets Fo IT consting An Integation Ae Geman an Fane
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
% change from prior year
UK
Italy
Germany
France
Spain
Netherlands
Switzerland
Belgium
Sweden
Austria
Norway
Poland
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
Slovakia
2009*
-2%
-12%
-2%
-2%
-2%
-3%
-3%
-2%
-13%
-2%
-12%
-21%
-3%
-2%
-11%
2%
-2%
-13%
-15%
-15%
IT consulting and systems integration services purchases(billions of euros, 2009 forecast)
€ 14.8
€ 6.7
€ 12.5
€ 4.5
€ 1.9
€ 3.8
€ 2.6
€ 0.8
€ 1.8
€ 1.0
€ 0.8
€ 0.5
€ 1.0
€ 0.1
€ 0.2
€ 1.0
€ 0.1
€ 0.1
€ 0.1
€ 0.0
2010*
6%
3%
6%
6%
6%
4%
5%
5%
-2%
5%
5%
0%
4%
6%
7%
6%
6%
2%
6%
2%
European Purchases O IT Outsourcing Services Will Shrink B 6% In 2009
In our calculation o I outsourcing services, we exclude the business process outsourcing category
because very ew companies count BPO services — or even the I component o BPO services — in
their I budgets. Tat still leaves €394 billion in 2009, down 6% rom €42 billion in 2008. Te UK
is by ar the largest European market, with almost twice the amount o I outsourcing purchases
as No. 2 Germany or No. 3 France. Te UK I outsourcing market will decrease by 10% in euros in
2009, but by 2% in pounds sterling. Te German and French markets or I outsourcing services
will slip by 3% in 2009, with insourcing taking place in these markets as the challenges o laying
o sta causes rms to bring outsourced activities back in house to put their sta to use. Te
Netherlands is the ourth largest I outsourcing market, with more activity than Italy and more than
twice as much I outsourcing as occurs in Spain, Sweden, or Switzerland (see Figure 13).
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Figure 13 lagest Eopean Maket Fo IT Otsoing Is The uK, Then Geman An Fane
Source: Forrester Research, Inc.46672
*Forrester forecast
A spreadsheet with additional data is available online.
IT outsourcing purchases(billions of euros, 2009 forecast)
% change from prior year
UK
Italy
Germany
France
Spain
Netherlands
Switzerland
Belgium
SwedenAustria
Norway
Poland
Denmark
Greece
Ireland
Finland
Portugal
Czech Republic
Hungary
Slovakia
€ 7.7
€ 13.1
€ 6.5
€ 2.4
€ 1.0
€ 2.6
€ 1.3
€ 0.4
€ 1.2
€ 0.5
€ 0.6
€ 0.2
€ 0.7
€ 0.1
€ 0.1
€ 0.7
€ 0.0
€ 0.0
€ 0.0
€ 0.0
2009*
-3%
-10%
-3%
-3%
-1%
-2%
-3%
-3%
-11%
-3%
-11%
-22%
-2%
-3%
-12%
4%
-1%
-13%
-14%
-16%
2010*
5%
6%
5%
5%
7%
6%
5%
5%
0%
5%
7%
0%
6%
5%
5%
8%
6%
2%
7%
1%
r E c O M M E N d A T I O N S
FOCUS IN 2009 ON SPECIFIC COUNTRy OPPORTUNITIES FOR DIFFERENT PRODUCTS
O a the geogaphi makets in the o o IT venos, Eope i be the eakest in 2009. This
is espeia te o uS IT venos, hee the stength o the oa against the eo means eve
eo, pon, an, o kone/kona/kona o evene geneates ee oas in 2009 than in
2008. Bt the Eopean IT maket is sti the seon agest in the o ate the uS, an Eope
has man onties — an man ompanies — that ae as avane in thei se o tehnoog as
the uS o uS ms. So teh venos annot an sho not ite Eope o as a maket to pse.
Instea, o the net 12 months o so, teh venos nee to be seetive in hee the pt thei saes
an maketing esoes, ith venos o ieent kins o teh pots osing on ieent
ont makets in Eope base on hee the eman o these pots is ike to be best:
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Eopean IT Maket Otook: 2009 To 2010
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· “Tech 12” markets in Europe provide best opportunities or next-generation technolog.
whie eaing, goba ompetitive ompanies in a Eopean onties i be inteeste in
nie ommniations an vieooneening, sevie-oiente ahitetes an bsinesspoess management, o ompting an seve vitaization, an smatphones an
mahine-to-mahine inteations, ompanies an govenments in denmak, Finan, The
Netheans, Seen, Sitzean, an the uK ae the most ike bes o these
tehnoogies. This is aea the ase o avane sotae pots sh as ontat ie-
e management, atomate spen anasis an sppie peomane management, an
stome ommnit patoms, so venos o simia pots sho os thei eots on
these makets.
· German, France, and Central Europe ofer biggest markets or sotware apps. As
note eaie, Fane is aea the agest Eopean maket o sotae. Geman aong
ith Astia an centa Eope ae eative nepenetate o some sotae pots
an i be ooking to sotae appiations sh as crM, SrM, an ScM as a a to estoe
ompetitiveness.
· Ital, Spain, Greece, and Central Europe provide growth potential or classic hardware.
despite investments in 3G ieess sstems, these makets sti ag behin the uK o the Nois
in aoption o boaban Intenet netok eqipment o seves, stoage, an Pcs. Venos o
these mate haae pots sho pt most o thei maketing eots into these makets.
· Continental Europe has untouched opportunities or IT outsourcing. The uK has one
etensive otsoing o IT opeations, bt ompanies in Fane, Geman, Ita, an
Spain (among othes) se IT otsoing to a esse egee as abo as have isoage
aoption o IT otsoing that o est in aos. coming ot o the eession manms ma vie IT otsoing as an atenative to hiing ne -time sta, athogh
sotae-as-a-sevie an o ompting senaios i aso ompete o this bsiness.
· Diferent IT consulting services will ollow the underling product adoption. IT sevies
venos that os on SOA, BPM, o nie ommniations i get the most tation in the
“teh 12” onties, hie those that onentate on impementation o ErP o crM sstems
i have moe sess in Geman an Fane. look at the onties that ae aopting the
haae an sotae that o sevies sppot, an taget those onties.
A l T E r N A T I V E V I E w
EUROPEAN IT PURCHASES IN 2009 TURN OUT TO BE FLAT OR JUST DOWN A LITTLE
A ea ago, hen e pbishe o 2008 oeasts o the Eopean IT maket, o main oeast as
moeate bish. Hoeve, in o atenative vie, e sai: “The most ike atenative to this
oeast is that the Eopean eonom oos the uS eonom into negative goth, asing teh
phases in Eope to eine in 2008.” That atenative vie is in at hat happene. So this time,
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Eopean IT Maket Otook: 2009 To 2010
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o atenative is the evese, that is, a moe positive otome. whie it is possibe that eonomi
onitions in Eope tn ot to be ose than e assme, e think it is moe ike that the ae
bette than pojete, ith a eative mi an shot-ive eession. Apat om the uK, Iean,an Spain, Eopean onties i not have the kin o hosing bbbe o ove-epenene on
onsme spening that the uS ha. An most o them — ith eeptions ike Ita, Iean, an
pehaps the uK — on’t have the big sa eits that the uS has to hane. So as makets in the
Ameias an Asia Pai stat to eove, man epot-oiente onties ike Geman, Fane,
Bene, an centa Eope i ome bak stong. I so, the teh seto i impove ith these
eonomies, an IT phases in Eope i tn ot to be fat o jst on a itte in 2009.
SUPPLEMENTAL MATERIAL
Methodolog
o start, we collected data or major European markets rom the Organization o EconomicCo-Operation and Development on nominal GDP, I investment on computer equipment,
communications equipment and soware rom 2001-2006 (or latest available data, which was
2004 or 2005 or some European countries), and I investment as a percentage o GDP. We
adjusted OECD data on investment in soware to exclude the value o “own account” or internally
developed soware, which Forrester includes in I sta costs. We excluded 45% o the total value o
soware, based on US data on the distribution o soware between “own account,” packaged, and
customizable soware.
Using Forrester data on the annual growth rates in European revenues o leading I vendors by
category or 2004 to 2007, we projected I category purchases by country or these years. We varied
each country’s growth rates, using the ratio o their nominal GDP growth rate to the European average.
For minor European markets like Slovakia, Slovenia, Lithuania, Latvia, Estonia, etc., where OECD data
was not available, we estimated total I investment using I-investment-to-GDP ratios or similar
countries such as Greece. For these countries where the OECD has not published data on investment
in computer equipment, communications equipment, and soware, we estimated these countries’
investment in each category as percentages o Greece’s (based on ratios o their GDP to Greece’s).
We imported country-specic projections or I services and outsourcing or 2005 to 2008 rom
the May 2006 “European I Services Spending Forecast: 2006 o 2011” report. We excluded BPO in
order to ocus specically on categories in the I budget. For 2001 to 2004, we used the November
2003 “Forecasting Europe’s Outsourcing Stampede” report, but: 1) allocated multimarket numbersor Austria/Germany/Switzerland, UK/Ireland, Spain/Portugal, Benelux, and Nordic countries
to the individual countries; 2) used 2001 to 2005 growth rates or Germany and the UK against
updated 2005 I services data to calculate updated historic spending; and 3) estimated 2001 to 2004
I services and outsourcing spending or minor European markets using growth rates in this period
or Spain and Portugal.
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© 2009, Foeste reseah, In. repotion PohibiteAgst 28, 2009
Eopean IT Maket Otook: 2009 To 2010
Fo Veno Stateg Poessionas
24
Forrester’s Enterprise And SMB Global I Budgets And Spending Survey, Q2 2009, was elded to 3,497 I
executives and technology decision-makers located enterprises with 1,000 or more employees in Australia/
New Zealand, Brazil, China, India, Japan, Mexico, Russia, Singapore, South Arica, South Korea, and the
United Arab Emirates, as well as rom companies with two or more employees in Canada, France, Germany,the United Kingdom, and the United States. Tis survey is part o Forrester’s suite o Business Data Services
studies. Forrester elded the survey rom February 2009 to May 2009. Exëvo elded this survey via telephone
on behal o Forrester. Survey respondent incentives include a summary o the research reports. We have
provided exact sample sizes in this report on a question-by-question basis.
Forrester’s Business Data Services elds eight business-to-business technology studies in 19 countries
each calendar year. For quality control, we careully screen respondents according to job title and unction.
Business Data Services ensures that the nal survey population contains only those with signicant
involvement in the planning, unding, and purchasing o I products and services. Additionally, quotas are
set or company size (number o employees) and industry as a means o controlling the data distribution and
establishing alignment with I spend calculated by Forrester analysts.
Companies Analzed For This Document
Accenture
Afliated Computer Services
Alcatel
Atos Origin
Avaya
BearingPoint
CA
Capgemini
CGI
Cisco Systems
Computer Sciences Corporation
Dell
Electronic Data Systems
EMC echnology
Ericsson
Fujitsu
Getronics
Hewlett-Packard
Hitachi
Hyperion Solutions (prior to its acquisition by
Oracle)
IBM
Inosys echnologies
Lenovo
Lucent echnologies
Mercury Interactive (prior to its acquisition by
HP)
Microso
Motorola
NEC
Nokia
Nortel Networks
Oracle
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Eopean IT Maket Otook: 2009 To 2010
Fo Veno Stateg Poessionas
25
SAP
Siebel Systems (prior to its acquisition by
Oracle)
Siemens Business Services
Siemens Network echnologies (prior to its
merger with Nokia)
Storage echnology (prior to its acquisition by
Sun Microsystems)
Sun Microsystems
Symantec
-Systems Enterprise Services
ata Consultancy Services
Unisys
Wipro
ENDNOTES
1 Te OECD published its latest Economic Outlook in June 2009, “OECD Economic Outlook No. 85, June
2009,” (http://www.oecd.org/document/18/0,3343,en_2649_34109_20347538_1_1_1_37443,00.html). Te
real GDP orecasts or the euro-zone countries are in its FlashFiles Summary o projections (http://www.
oecd.org/dataoecd/18/26/2713584.xls).
2 Te countries o Western and Central Europe include 25 countries in the European Union (prior to
the accession o Romania and Bulgaria), plus Switzerland, Norway, and micro-countries like Andorra,
Liechtenstein, etc.
3 For example, CIOs eel they have to keep on investing in security soware to stay ahead o threats and in
soware products to help with regulatory compliance. And I management soware and enterprise process
applications help can drive down other costs.
4 We use the IMF assumption o a 2% decline o the US dollar against the euro, though this may be too low.
5 Our denition o Western and Central Europe includes 25 o the 27 countries in the European Union (we
include Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Slovakia, Slovenia,
Spain, Sweden, and the UK; we exclude Bulgaria and Romania) plus Iceland, Norway, and Switzerland.
6 We discussed the reasons or the dierent behaviors o the US and Canadian I markets in our recent
report on the US and Global I markets. See the June 29, 2009, “US And Global I Market Outlook: Q2
2009” report.
7 Forrester estimated that the total European market or I services and outsourcing and or business process
outsourcing in 2006 will be €109 billion, o which €17 billion will be spent on application outsourcing, €11billion on business process outsourcing, €24 billion on inrastructure-related outsourcing, and €56 billion
on I consulting and integration services. See the May 3, 2006, “European I Services Spending Forecast:
2006 o 2011” report.
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