Bulgaria Information Technology Report 2010
Business Monitor International, November 2009, Pages: 53
The Bulgaria Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bulgaria's information technology industry.
Market Overview
The total size of the Bulgarian IT market in 2010 is estimated by BMI at around US$1.0bn, up from US$990mn in 2009. BMI expects a market compound annual growth rate (CAGR) of 9% for 2010-2014. Bulgarian IT spending is forecast to record low single-digit growth in 2010 following a sharp deceleration in 2009 as businesses and consumers retrenched due to the recession.
There should still be areas of opportunity in 2010, however. Lower prices and growing internet penetration will be among factors boosting the popularity of notebooks. Growing ties with EU partners and clients should increase demand among enterprises for enterprise resource planning (ERP) solutions to improve efficiency. Despite budgetary stresses, government spending on ICT will continue in areas like healthcare and e-taxation, supported by EU programmes.
Major EU-funded projects are coming on stream as Bulgaria attempts to improve its position across a range of ICT indicators. Meanwhile, foreign company investment in offshoring and call centres will also generate IT spending. EU accession will continue to drive spending by enterprises, with most demand still coming from larger and foreign-owned companies. However, small and medium-sized enterprises (SMEs) represent an increasing opportunity.
Industry Developments
Bulgaria's IT governing body, the State Agency for Information Technology and Communications (SAITC), has set a goal for IT to account for 10% of Bulgaria's GDP by 2011. Key policy areas include programmes to computerise schools and connect them to the internet, raising Bulgaria into the top 40 countries in terms of e-government and investing in skills training to boost the domestic IT sector. In addition to local funding, Bulgarian organisations have access to EUR300mn from EU structural funds for the development of IT. In July 2007, the EU announced that it would make substantial sums available to Bulgaria under its Competitiveness and Innovations Programme, which will include EUR728mn earmarked for policies in the ICT sector.
Healthcare IT system reform is part of the government's drive to achieve greater efficiency. Key goals in a plan outlined in late 2008 included online health records for all patients by 2009 and the introduction of e-health cards for evey patient by 2013. Meanwhile, another of SAITC's flagship programmes is eeducation, with the government's plan calling for schools in all 28 districts of Bulgaria scheduled to be connected to the internet during the 2008-2009 school year.
Company News
HP, Acer, Toshiba, Asus, Acer, Dell and Fujitsu-Siemens are among the market leaders for Bulgarian PC sales as brand computers capture a steadily increasing share. HP was in top spot in 2008 followed by Acer and Toshiba, with the top five players accounting for about half the market. Most multinational vendors in the Bulgarian market work with big local distributors like Solytron and ASBIS Bulgaria. Most of the major multinational software vendors are present in Bulgaria, either through a subsidiary or through local distributors and partners. Microsoft and SAP dominate, with Microsoft benefiting from an agreement with the State Administration Ministry to purchase software licenses for use within government. Under the agreement, the Bulgarian government will purchase licenses for Windows and Office software for 60,000 PCs and 2,000 servers.
The increasing number of large IT projects has led global IT services vendors to increase investment in local IT services and BPO infrastructure. IBM employs over 100 staff at its BPO centre in Sofia. Like HP, IBM has based its local growth projections on services expansion and intends to focus on some value-added services such as consultancy and financial sector solutions.
Computer Sales
BMI forecasts that the Bulgarian PC market (including notebooks and accessories) will be worth US$591mn in 2010, with flat or slightly negative annualised growth. In H109, computer sales experienced a sharp deceleration compared with the same period of 2008. The first quarter of 2009 saw growth drop into the low single-digit range, at about 3%, down from a strong double-digit performance in 2008.
Growth in 2010 and 2011 is forecast to remain well below the previous levels of 2006-2008 but will trend higher again in 2012. Notebooks are projected to lead the way with a projected 2009-2013 CAGR of 13%. Lower prices, new entertainment features and a greater premium on mobility are among the factorsboosting the popularity of notebooks.
Software
Bulgaria's software market is forecast by BMI at US$111mn in 2010 and is expected to grow at a CAGR of 9% over the 2010-2014 forecast period. In 2009, the economic slowdown created challenging trading conditions for vendors, as large enterprises focused on the bottom line. Business trends were negative for many vendors as clients put investment plans on hold as the effects of the financial crisis were felt. The domestic software market is still expected to grow around 40% to US$155mn by 2014, driven in part by government and EU-subsidised IT projects as well as the untapped potential of Bulgaria's SME segment. An environment of privatisation and modernisation is likely to drive growth, particularly in sectors like utilities, telecoms and banking.
EXECUTIVE SUMMARY
SWOTS
Bulgaria IT Sector SWOT
Bulgaria Telecommunications Industry SWOT
Bulgaria Political SWOT
Bulgaria Economic SWOT
Bulgaria Business Environment SWOT
CENTRAL AND EASTERN EUROPE IT MARKETS OVERVIEW
IT Penetration
Market Growth And Drivers
Sectors And Verticals
IT Business Environment Ratings
Central and Eastern Europe IT Business Environment Ratings
Table: Regional IT Business Environment Ratings
BULGARIA MARKET OVERVIEW
Government Authority
EU Authority
Background
Key Issues For Investors
Hardware
Software
Services
End-User Analysis
INDUSTRY DEVELOPMENTS
Healthcare IT System
INDUSTRY FORECAST SCENARIO
Table: Bulgaria's IT Industry - Historical Data & Forecasts (US$mn Unless Otherwise Stated)
Country Context
Table: Rural/Urban Breakdown, 2005-2030
Table: Consumer Expenditure, 2000-2012 (US$)
Internet
Table: Bulgarian Telecoms Sector - Internet Historical Data & Forecasts
Macroeconomic Forecast
Economic Activity
Table: Bulgaria - Economic Activity
COMPETITIVE LANDSCAPE
Hardware
Software
IT Services
COMPANY PROFILES
IBM Bulgaria
Microsoft
HP
Dell
COUNTRY SNAPSHOT: BULGARIA DEMOGRAPHIC DATA
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
BMI METHODOLOGY
IT Ratings – Methodology
Ratings Overview
Table: IT Business Environment Indicators
Weighting
Table: Weighting Of Components
How We Generate Our Industry Forecasts
IT Industry
Sources
- IBM Bulgaria
- Microsoft
- HP
- Dell
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