United Kingdom Information Technology Report Q4 2012
Business Monitor International, October 2012, Pages: 66
The United Kingdom 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 United Kingdom's information technology industry.
BMI View:
UK IT spending is expected to reach US$83.6bn in 2012, down 1%, with BMI downwardly revising its forecast, following the UK's return to recession in early H112. UK PC sales drifted back into negative growth territory in Q212, after a single quarter of positive growth in Q112. The overall outlook for UK IT spending in 2012 is one of negative growth, with the UK unable to remain immune to problems affecting other major European markets. The UK IT services market remains overshadowed by the impact of government cuts in IT spending and a moratorium on projects with a value of more than GBP100mn.
Headline Expenditure Projections:
Computer Hardware Sales: US$19.4bn in 2011 to US$18.8bn in 2012, -4% in US dollar terms.
Downwardly revised owing to analyst modification after the PC market reported negative growth in Q212.
Software Sales: US$11.8bn in 2011 to US$12.1bn in 2012, +2% in US dollar terms. Downwardly revised owing to analyst modification, but software still comprises around 70% of cloud spending.
IT Services Sales: US$53.3bn in 2011 to US$52.7bn in 2012, 11% in US dollar terms. Downwardly revised owing to analyst modification with price deflation and an environment of fiscal retrenchment meaning difficult trading conditions for vendors.
Risk/Reward Ratings (RRR): The UK's score was 82.9 out of 100.0. The UK remains first in our latest Europe IT RRR table, still ahead of Germany and Sweden, and despite the overall disappointing performance of its PC market in H112.
Key Trends & Developments:
- A major factor likely to restrain demand in 2012 is the government's tough austerity programme,
which has targeted an average of 19% cuts across departments over a four-year period through to 2015. In March 2011, the government claimed it had achieved savings of GBP1bn, although detailed figures were not available. Meanwhile, the GBP12.7bn National IT Programme for Health (NPfIT) was finally scrapped in 2011.
- The UK cloud market remains small, at an estimated GBP1bn in 2012, but BMI forecasts it could account for 10% of total UK IT spending by 2016. The government's efficiency drive may create opportunities in areas such as cloud computing and offshoring, where pilots have been launched. While the centralised health IT provider model has been cancelled, individual components of the plan will still be implemented. The government has also announced plans to liberalise its procurement process and increase the use of open-source software in government.
- Private sector budgets remain tight and many businesses are still reluctant to commit to new investment that requires large commitments of time and money. Credit availability is another constraint on activity. However, in H112, there were indications that delays in upgrades were fuelling more spending on maintenance and warranty services. There is also considerable pentup demand for ERP solutions.
Executive Summary 5
SWOT Analysis 7
UK IT Sector SWOT 7
UK Broadband Sector SWOT 8
UK Political SWOT 9
UK Economic SWOT 10
UK Business Environment SWOT 11
Europe Risk/Reward Ratings 12
Table: Europe Risk/Reward Ratings, Q412 14
Europe IT Markets Overview 15
IT Penetration 15
Market Growth And Drivers 17
Sectors And Verticals 19
Market Overview 23
Hardware 24
Software 27
Business Software 29
Services 31
Industry Developments 34
Industry Forecast 39
Table: UK IT Industry – Historical Data And Forecasts (US$mn unless otherwise stated), 2009-2016 42
Industry Forecast Internet 43
Table: Telecoms Sector – Internet – Historical Data & Forecasts, 2009-2016 43
Macroeconomic Forecast 45
Table: United Kingdom – Economic Activity, 2011-2016 46
Competitive Landscape 47
Hardware 47
Software 48
IT Services 50
Broadband 52
Table: UK Broadband Market By Technology 52
Company Profiles 56
BT Global Services 56
Country Snapshot 58
Table: The United Kingdom's Population By Age Group, 1990-2020 ('000) 59
Table: The United Kingdom's Population By Age Group, 1990-2020 (% of total) 60
Table: The United Kingdom's Key Population Ratios, 1990-2020 61
Table: The United Kingdom's Rural And Urban Population, 1990-2020 61
BMI Methodology 62
United Kingdom Information Technology Report Q4 2012
© Business Monitor International Ltd
Page 4
How We Generate Our Industry Forecasts 62
IT Industry 62
IT Ratings – Methodology 63
Table: IT Business Environment Indicators 64
Weighting 65
Table: Weighting Of Components 65
Sources 65
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