Turkey Information Technology Report Q2 2012
Business Monitor International, March 2012, Pages: 56
Market Overview
The size of the strategically located Turkish IT market is forecast to increase from US$7.9bn in 2012 to US$14.4bn by 2016, making it one of the fastest growing in emerging Europe. A cultural and geographical position as a hub between Europe and the Middle East only accentuates the significance of the country's large market size for IT vendors.
Turkish demand for IT is forecast to expand by double digits in 2011, consolidating the recovery in 2010 from the impact of the global economic slowdown. Turkish IT spending is expected to strengthen throughout 2011, buoyed by a recovery in industrial production and domestic lending growth. The IT market will grow alongside other sectors as the government implements its programme of privatisation and reform.
The Turkish IT market is projected to achieve a compound annual growth rate (CAGR) of 16% during 2012-2016. Computer penetration should pass 50% by 2016, while small- and medium-sized enterprises (SMEs) also represent a large potential market. In recent years, PC sales have received new momentum as the focus of demand shifts towards the Anatolia region and this is expected to continue as the rate of PC penetration rises.
Industry Developments
In 2011, a new initiative called FATIH (The Movement To Increase Opportunities in Technology,) was launched. The project is expected to cost up to TKL2.5bn and should reach 570,000 classrooms over the next five years. The focus of the project is networked notebooks, printers, cameras for every classroom, as well as educational content Healthcare should be a significant area of opportunity for IT vendors over the next few years as organisations seek efficiency improvements and better quality services. Government departments have continued to launch tenders, including a data warehouse for the Social Security Institute and an upgrade of the statistical system for the Ministry of Labour and Social Security.
Competitive Landscape
Vendors and services providers believe cloud computing is a promising way to target the huge SME segment. In 2011, leading Turkish internet service provider Koc.net launched an online CRM service for SMEs in partnership with Surado. Meanwhile, Turkcell has launched an internet-based platform for SMEs, which provides customer relationship management (CRM) and enterprise resource planning (ERP) applications, as well as basics such as email and website services.
Business software leader Oracle reported strong results for the Turkish market in H111. The company reported a number of success stories with local clients such as Turkcell, Aegon, Tekstilbank, Yapi Kredi Bankasi, Petrol Ofisi, Enka and Hisar Scholl Kemerkoy.
Hardware
Turkey's computer hardware sales are projected at US$5.7bn in 2012 and are forecast to reach around US$10.6bn in 2016. The market is forecast to remain in positive growth territory in 2012, with revenue forecast to grow at a 17% CAGR in 2012-2016. The notebook segment was the main growth driver in 2010, while desktops sales declined as companies remained cautious about IT spending. The market fundamentals remain promising, with computer penetration low at about 10%. Until a few years ago, demand for computers was mainly confined to large cities such as Istanbul, Izmir and Ankara.
Now, the fastest growth in sales is coming from Anatolia. Demand for laptops is expected to be the strongest growth area over our forecast period but desktops remain popular with businesses.
Software
The software market in Turkey is projected at US$933mn in 2012 and is forecast to reach US$1.5bn in 2016, with a CAGR of 13%. However, much will depend on the success in bringing down illegal software use, which at 65% is nearly twice the global average. The global economic crisis may have provided a boost to hosted software and outsourcing solutions, which have grown in popularity. There is considerable potential for software market growth but lack of access to credit limits Turkish SMEs' willingness to spend on applications and solutions that often must be financed from operational budgets.
IT Services
Turkish spending on all categories of IT services is projected at US$1.3bn in 2012. Banks and telcos were among organisations spending on new IT platforms in H111. An increased business focus on internal savings as a result of the economic situation could ultimately drive higher spending on external IT suppliers such as systems integrators and managed services providers.
The Turkish IT services market is expected to grow at a 14% CAGR over 2012-2016. While support remains the largest services category, other groups, including outsourcing on non-core functions and training services, are growing particularly fast. A pick-up in large projects in key verticals such as telecoms, manufacturing and finance should provide new corporate sector opportunities in outsourcing, systems integration and application customisation.
E-Readiness Data indicate that Turkey's e-commerce transactions level doubled in 2007 to 54.1mn transactions, up from 21.7mn the previous year. Although other operators in Turkey are providing ADSL services, they are reliant on the incumbent Türk Telekom's wholesale ADSL product. Wholesale connections are included in its reported total.
The Telecommunications Authority is keen to foster the growth of alternative broadband operators by allowing them to co-locate on Türk Telekom's network, in addition to reselling Türk Telekom's wholesale ADSL product. Competing against Türk Telekom remains difficult, given that it owns the bulk of Turkey's fixed-line network infrastructure and is determined to compete aggressively on price. In 2007, the OECD called for more initiatives to increase public use of ICT, with research from Eurostat showing that Turkey is among the countries in which internet access is low. The research found that only 39% of Turks had computers at home and that Turkey was below the EU average in terms of computers per household and internet access.
Turkey lags behind its EU neighbours on many indicators but not e-government, where much progress has been made. In 2005, the Information Society Department, responsible for the overall coordination of ICT projects, was established within the State Planning Organisation. To increase participation and the level of success, an advisory board with 41 members has also been established. This consulting body gathers representatives from public institutions, non-governmental organisations and universities.
Business Monitor International's Turkey 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 Turkey's information technology industry.
Executive Summary
SWOT Analysis
Turkey IT Sector SWOT
Turkey Telecoms Industry SWOT
Turkey Political SWOT
Turkey Economic SWOT
Turkey Business Environment SWOT
IT Risk/Reward Ratings
Table: Europe IT Risk/Reward Ratings, Q212
Europe IT Markets Overview
Market Overview
Government Authorities
Industry Forecast Scenario
Table: Turkish IT Sector, 2008-2016 (US$mn Unless Otherwise Stated)
Internet
Table: Telecoms Sector – Internet – Historical Data And Forecasts, 2009-2016
Macroeconomic Forecast
Table: Turkey – Economic Activity
Competitive Landscape
Company Profiles
IBM Turkey
Oracle Turkey
Meteksan IT Group
Koç Sistem
Country Snapshot: Turkey 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$)
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- IBM Turkey
- Oracle Turkey
- Meteksan IT Group
- Koç Sistem
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