Poland Information Technology Report Q4 2011
Business Monitor International, October 2011, Pages: 61
Market Overview
Polish IT spending is expected to grow at a compound annual growth rate (CAGR) of 9% between 2011 and 2015, with IT services driving growth for the sector as a whole. The size of the IT market is estimated to increase to around US$12.7bn in 2015. Polish consumer spending bounced back in 2010, with notebooks among the biggest drivers of growth. Growth in IT services spending was more moderate but is expected to trend upwards in 2011.
Poland still looks well positioned to be one of the best regional IT market prospects. In H111, demand was strong across several key IT spending segments including telecoms, manufacturing and utilities. Some public sector projects are expected to be on hold ahead of national elections in October 2011, meaning that vendors are likely to focus on recovering private demand.
Enterprise IT spending should pick up in 2011. It is estimated that the average product replacement lengthened by around half a year during the economic slowdown, creating a latent demand for upgrades. Business and consumer investment will remain vulnerable, however, to any sign of weakness in the eurozone or global economic recovery.
Industry Developments
The introduction of new VAT rates, effective from January 1 2011, was reported by vendors to be providing a boost to sales of financial and accounting software. Vendors were adjusting their software to the tax change as they anticipated brisk sales. The new tax rates were announced in a bill on September 9 2010.
Poland's National IT Infrastructure Plan for 2007-2013 was formally adopted by the government in 2008, following a public sector IT spending slowdown in preceding years. In 2009, EU funding drove a series of projects, with the IT component worth nearly EUR1bn. According to the National IT Infrastructure Plan, some 75% of funds spent on government IT projects over the next five years is expected to come from the EU.
Competitive Landscape
Leading Polish IT company Asseco Poland announced strong financial results in Q111, with revenues up 73.3% year-on-year (y-o-y), while gross profits increased 49.7%. The results indicated that Asseco had successfully filled the revenues gap created by the completion of a major contract for PKO-BP. Among other local contract wins in 2011, Asseco is implementing a PLN21.2mn tender for the Agency for Reconstruction and Modernisation of Agriculture (ARMA) to develop and maintain new information systems.
Thanks to a programme of modernisation and privatisation, the utilities sector is a particular vendor focus. In H111, European leader S&T Services Poland signed an enterprise resource planning (ERP) system development contract with gas transmission operator GAZ-System after prevailing in a public tender. Meanwhile, ABG, a company in the Asseco Group, announced that it was to focus on providing IT services and solutions for the power sector.
Local companies reported a revival in demand in 2010 for ERP implementations, which had dropped off during the global economic crisis. Asseco said that demand from this segment in 2010 had far exceeded that of previous years. SAP dominates the Polish ERP software segment, with revenues at twice the level of nearest competitor Asseco and nearly three times that of its global rival Oracle.
Computer Sales
Poland's computer hardware sales are projected at US$3.5bn in 2011 and are forecast to reach US$4.8bn by 2015. In the medium term, a quick look at Poland's forecast growth trajectory reveals how quickly Poland could close the PC ownership gap with Western Europe as incomes (driven by the effects of EU membership) increase.
BMI projects that PC penetration could reach 75% by 2015. Falling prices of both desktops and notebooks have been a major growth driver for the hardware market, along with EU aid and economic recovery. Research has revealed that Poles are starting to purchase more high-end computers.
Software
The Polish software market is projected to be worth US$2.1bn in 2011 and is likely to grow to US$2.9bn by 2015, with a CAGR of 8%. Migrations to Microsoft's Windows 7 operating system have the potential to impact positively on sales in 2011 as many businesses are still using Windows XP. Rising computer penetration in the enterprise sector has driven continued growth of software demand, despite software piracy issues.
In 2011, a change in VAT rates is expected to provide a significant boost to enterprise procurements of financial and accounting software. The procurement of basic software packages such as ERP still accounts for about half of enterprise software spending, particularly in the manufacturing sector. However, vendors are increasingly focused on more specialised applications, such as CRM, and business intelligence, where faster growth is possible.
IT Services
IT services spending, projected at US$3.4bn in 2011, is the fastest-growing sector of the IT market and is expected to rise to US$5.0bn by 2015. Spending on IT services is projected to grow robustly in 2011, boosted by projects previously delayed as a result of the economic slowdown. In addition to key ITspending verticals such as banking and telecoms, utilities have provided a particularly strong source of opportunity in 2011.
With a larger installed IT base, acceptance of the need for IT services is spreading through many organisations. While systems integration as well as hardware and software support and installation still collectively account for more than half of total IT spending, outsourcing has become the fastest-growing segment.
E-Readiness
The internet market continues to be constrained by high telephone charges and relatively low levels of computer penetration. Moreover, there are wide regional disparities, with internet penetration about twice as high in urban as in rural areas.
A recent Forrester survey revealed that, while overall online banking uptake and PC availability remained low, Polish internet consumers already matched Southern Europeans in online shopping. Poland even outperformed Spain, with 30% of online consumers having previously purchased something online, compared with just 29% in Spain.
How broadband will develop in the longer term will greatly depend on the Polish regulator's success at forcing Telekomunikacja Polska into a functional split as well as its continued liberalisation of the market. The regulator believes that the split will happen in 2011, but there are high risks that it could be delayed longer than this. How wireless technologies are deployed in the rural regions will also be a major factor in the proliferation of broadband.
Executive Summary
SWOT Analysis
Poland IT Sector SWOT
Poland Telecoms Industry Sector SWOT
Poland Political SWOT
Poland Economic SWOT
Poland Business Environment SWOT
IT Business Environment Ratings
Table: Regional IT Business Environment Ratings
Europe IT Markets Overview
Poland Market Overview
Industry Forecast
Table: Poland's IT Industry – Historical Data And Forecasts (US$mn unless otherwise stated), 2008-2015
Country Context
Table: Rural/Urban Breakdown, 2005-2030
Table: Consumer Expenditure, 2000-2012 (US$)
Industry Forecast Internet
Table: Telecoms Sector – Internet – Historical Data And Forecasts, 2008-2015
Macroeconomic Forecast
Table: Poland – Economic Activity, 2008-2015
Competitive Landscape
Internet/Broadband Competitive Landscape
Table: Polish Fixed Broadband Market, March 2010
Company Profiles
HP Polska
Asseco Poland
Dell Polska
Microsoft
IBM Poland
Country Snapshot: Poland Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- HP Polska
- Asseco Poland
- Dell Polska
- Microsoft
- IBM Poland
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