Considering the ranking of the 27 EU-countries in respect of expenses for information and communication technologies, France finds itself in the 3rd place behind Germany and the UK. Despite current economic headwinds, French IT market is projected to grow at a CAGR of 4% over 2011-2015. As stated on marketresearch.com the addressable French market for IT products and services is projected by BMI to reach US$46.1bn in 2011 and US$53.5bn by 2015.
The structure of the market players looks the following way. There are about 25,000 companies with 50 – 200 employees, followed by approximately 7,000 companies with 200-2,000 employees. A large number of companies have got 10 to 50 employees. INSEE estimates about 165,000 companies in this field. Maybe this also explains why the model SaaS is received so positively in France.
In France, Capgemini’s revenues increased by 7.5%, with over 900 new employees being taken on during the quarter. However Atos’ French revenues actually declined by 2.6% in the first quarter of 2011, with Atos warning about price pressures.
IT market growth in 2011 is expected to be reach 4%, however there is strong pressure on prices, leading vendors to be wary of non-profitable growth. Vendors look to key segments such as telecoms, banking and energy where most opportunities are likely to be generated. Business intelligence is one of the driving forces in the market. This segment has exceeded sales of 2 bn. €, currently growing by more than 7 %. Virtualisation and cloud computing offer opportunities, but still much depends on the pace of economic recovery and reform in key sectors.
Cloud computing is one of the key growth drivers identified by Orange Business Services in its five-year plan. The company has set a target of generating 500mn euros from cloud computing by 2015. In December 2010, Orange Business Services implemented a cloud-based messaging and collaboration solution for French entertainment provider Cirque du Soleil.
The French market remains focused on traditional embedded software rather than software-as-a-service. However, French internet service providers (ISPs) continue to roll out hosted software offerings and double-digit growth is expected in this area.
France has just three mobile network operators and is one of the least competitive mobile markets in the region. This has resulted in significantly higher and more stable average revenue per user rates and mobile penetration that is still below 100%, providing better subscriber growth opportunities.
The French market shows a trend to international solutions, technology especially is well received. Hosted solutions, especially in the CRM field, are in great demand. French companies prefer partners on the spot. Although French language is more preferable for the market; as it is the common way to avoid national “barriers” by having partners in France. Still on the management level communication in English is usually no problem. Currently the French government greatly promotes training in a foreign language.
Staff related topics are currently very popular in France. Despite the slight population growth, there is a large need for qualified staff. The market research company Markess expects a growth of 27 % in this sector, which leads to estimated sales of 270m Euro for 2011. eRekruiting alone constitutes 10 % of the entire HR market.
Looks to me there is money in French IT market and there is a great potential. Still there is a question how to use this potential and expand it for the benefit of all market players.
Aliona Kavalevich
Business Development Manager
