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

© 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
Software Markets
PAC France
2

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Economic and IT Environment
IT Challenges for Users
Trends & Impact on the IT Market
Vendor Landscape
Conclusion
Agenda
20133

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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
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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
2
9
8
14
27
27
5
3
6
5
15
10
France
..............................
Worldwide
40 20 0 20 40 60
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
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
©PAC2013UserSurvey
Considering the following application areas, does
your company intend to spend more, about the same or
less in the next two years?

© PAC
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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
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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
17 Top IT spenders
budget IT > €500m
43 Large IT spenders
40 Mid-large IT spenders
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
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18

© 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%
players in 2012
Top 10 +10/Top 20
28%
10%
11%
51%
players in 2001
Top 10 +10/Top 20
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
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
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
IT Services
PAC France
M: +33 7 63 23 01 80
E: v.gelineau@pac-online.com
Olivier Rafal
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

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

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