Israel Information Technology Report Q1 2013
- ID: 2373309
- January 2013
- Region: Israel
- 76 pages
- Business Monitor International
Israeli IT spending is expected to reach US$6.0bn in 2012, up 5%. In Q112, several indicators suggested moderating consumer demand, but vendors still reported a solid trading environment for IT services across industrial, government, defence and financial services segments. The current rate of PC penetration, while high for the region, represents potential for organic growth.
Household penetration is estimated at around 75%. The Israeli IT market should gain enough momentum from key sectors to expand at a CAGR of 7% over BMI's 2013-2017 forecast period, due to momentum from key segments.
Headline Expenditure Projections:
Computer Hardware Sales: US$2.5bn in 2011 to US$2.6bn in 2012, +3% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, but Israeli businesses are investing more to facilitate expansion and development.
Software Sales: US$1.3bn in 2011 to US$1.3bn in 2012, +6% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but device and data proliferation will drive spending on customer relationship management (CRM), databases and business intelligence.
IT Services Sales: US$2.0bn in 2011 to US$2.1bn in 2012, +6% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification but key segments such as government and defence will be a continued source of opportunities.
Israel's IT rating score was 66.3 out of 100.0, up on the previous quarter. Israel has regained first place in our latest RRR table, ahead of both Qatar and the UAE.
Key Trends & Developments:
- BMI forecasts overall solid growth for the Israeli IT market for 2012, despite a deteriorating external economic environment. Businesses will maintain a cautious attitude to IT investments due to uncertainty about a sustainable global economic recovery in key export markets. There should, however, be growth in areas such as business intelligence, server virtualisation, mobile devices and cloud computing.
- New cloud computing offerings and increased competition in this segment should fuel further demand from users. Particular areas of opportunity for cloud computing include banking and retailing as organisations in those fields look to save money on hardware investments.
Businesses will, not only seek to make cost savings, but will look to boost efficiency and increase flexibility of response to customer needs.
- The growing emphasis of many multinational IT vendors on software and services revenues, has led companies such as Dell and SAP to direct more investment in R&D at the Israeli market. However, Israel's domestic IT service companies have strong advantages owing to local knowledge and contacts. For example, Ness Israel's long-term relationship with the Israeli Department of Defence makes it a strong player in the defence and homeland security vertical.
Despite their global ambitions, Israel remains an important market for these companies and typically accounts for 40-50% of revenue. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
Israel IT Sector SWOT 7
Israel Telecommunications Sector SWOT 8
Israel Political SWOT 9
Israel Economic SWOT 10
Israel Business Environment SWOT 11
MEA IT Risk/Reward Ratings 12
Table: Middle East And Africa IT Risk Reward Ratings, Q113 14
MEA IT Markets Overview 15
IT Penetration 15
Sectors And Verticals 18
Market Overview 22
Government Authority 22
Table: Government Initiatives 23
Industry Developments 30
Industry Forecast 32
Table: Israel IT Industry - Historical Data And Forecasts (US$mn unless otherwise stated), 2009-2017 34
Industry Forecast Internet 35
Table: Internet Data And Forecasts, 2010-2017 35
Competitive Landscape 37
Internet Competitive Landscape 40
Macroeconomic Forecast 42
Table: Israel - Economic Activity, 2011-2016 44
Company Profiles 45
Microsoft Corporation 63
Country Snapshot 68
Table: Israel's Population By Age Group, 1990-2020 ('000) 69
Table: Israel's Population By Age Group, 1990-2020 (% of total) 70
Table: Israel's Key Population Ratios, 1990-2020 71
Table: Israel's Rural And Urban Population, 1990-2020 71
BMI Methodology 72
How We Generate Our Industry Forecasts 72
IT Industry 72
IT Ratings - Methodology 73
Table: IT Business Environment Indicators 74
Table: Weighting Of Components 75