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Poland Information Technology Report Q1 2012
Business Monitor International, Jan 2012, Pages: 54
Market Overview
Polish IT spending is expected to grow at a compound annual growth rate (CAGR) of 10% between 2012 and 2016, with IT services driving growth for the sector as a whole. Polish consumer spending is among the most robust in Europe at present, with electronics goods such as notebooks and smartphones among the biggest growth areas. It services spending has also trended upwards, with a boost from projects in sectors such as healthcare and financial services.
Poland still looks well positioned to be one of the best regional IT market prospects. In 2011, demand was strong across several key IT spending segments including telecoms, manufacturing and utilities. Some public sector projects were on hold ahead of national elections in October 2011, meaning that vendors are likely to focus on recovering private demand.
Enterprise IT spending should be steady in 2012. 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 Thanks to a programme of modernisation and privatisation, the utilities sector was a particular target for IT services vendors in 2011. In H111, European leader S&T Services Poland signed a contract with gas transmission operator GAZ-System after prevailing in a public tender. Meanwhile, IBM was among vendors to benefit from an upturn in financial sector IT spending in 2011. Among IBM's regional financial sector clients was Poland's oldest and largest bank, PKO Bank Polski.
One potential demand driver going forward will be organisations looking for help to utilise efficiencies from cloud computing such as SaaS and Infrastructure-as-a-Service. In 2011,Telekom Polska announced that it would be looking to generate new revenue opportunities from cloud computing. Meanwhile, Microsoft announced it would implement a new cloud computing partnership with UPC Poland. The new cloud service offered by UPC based on Microsoft software will be targeted at SMEs.
Computer Sales
Poland's computer hardware sales are projected at US$3.7bn in 2012 and forecast to reach US$5.1bn in 2016. 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 2016. 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$2.2bn in 2011 and is likely to grow to US$3.1bn by 2016, giving a CAGR of 10%. Migrations to Microsoft's Windows 7 operating system have the potential to continue to impact positively on sales 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 provided a 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$3.5bn in 2012, is the fastest-growing sector of the IT market and is expected to rise to US$5.4bn by 2016. Spending on IT services is projected to grow robustly, boosted by projects previously delayed as a result of the economic slowdown. In addition to key IT-spending verticals such as banking and telecoms, utilities 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.
- Benchmark BMI's Independent 5-year IT Industry Forecasts to test other views - a key input for successful budgetary and strategic business planning in the Poland IT market.
- Target Business Opportunities & Risks in Poland's IT sector through our reviews - and major deals, projects and investments in Poland.
- Exploit Latest Competitive IT Intelligence & Company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure – includes multi-national and national companies'
Business Monitor International's Poland 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 Poland's information technology industry.
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