With a turnover of $45 billion, the French software and IT services market ranks #2 in Europe after Germany and grows at a rate of 7% per year. This market has known a steady growth of 8% in 2007, pulled by demand in Consulting Services (up 6%), Engineering (up 4.5%), Facilities Management (up 9.5%) and Packaged Software solutions (up 5.5%).
Over 6,000 French firms specialize in software services, 2,000 with 10 employees or more. Key activities in this market are Engineering and Integration (23%); Software Development and Technical Assistance (22%); Packaged Software (21%); Facilities Management and On-Line Services (20%); Consulting Services (8%); Training Services (3%); and Third-Party Maintenance (3%).
According to Market Research Firm Pierre Audoin Conseil (PAC) the twenty software services firms that dominate the French market are IBM Global Services ($3.3 billion - 5% growth); Capgemini ($2.6 billion - 9.1% growth); Atos Origin ($2.4 billion - 0.3% growth); Accenture ($1.2 billion); Unilog-Logica CMG ($1.2 billion); Orange Business Services ($964 million); HP Services ($914 million); Sopra ($898 million); Steria ($785 million); EDS ($650 million); GFI Informatique ($615 million); CSC ($586 million); Bull Services ($533 million); Experian ($484 million); Euriware ($357 million); ADP GSI ($341 million); T-Systems ($322 million); Cegedim ($321 million); Osiatis ($293 million); and Nextira One ($284 million).
The French packaged software market is valued at $12 billion and grows at a rate of 6.5% per year. The ten largest software publishers on the French market are: Microsoft ($1.8 billion); IBM ($801 million); Oracle ($500 million); SAP ($391 million); Sage ($333 million); HP ($216 million); Symantec ($191 million); Cegid ($182 million); EMC ($158 million); Dassault Systèmes ($150 million); Adobe ($130 million); Business Objects ($111 million). Seven of these organizations are American. Only three, Cegid, Dassault Systèmes and Business Objects, are French.
Project Management Software The market for management software applications has recovered from three years of recession. According to market consulting firm IDC, the Enterprise Resource Planning (ERP) market, which includes the sale of software licenses, maintenance and services, experienced 9.4 percent growth in 2006 to reach $5.3 billion in sales. Large corporations purchased $187 million worth of software licenses, a growth of 30 percent from 2005. On the other hand, SME sales only grew by 4.9 percent or $295 million. According to market consulting firm PAC, SMEs represent less than 30 percent of total sales, which means a strong potential for growth in this segment for providers of ERP solutions.
Demand from large firms is supporting growth in the software and services market, especially in the area of infrastructure software, middleware, security, and business intelligence. In addition, recent decisions concerning the "Chorus" project at MINEFI, the French Ministry of Economy, Finance and Industry, confirm the public sector's role of growth driver in the French market.
Internet Connections and High-Speed Connections According to market consulting firm Mediametrie, over 30 million French people or 57% of the French population are connected to the Internet, including 23 million or 44% of the population through a high-speed connection.
On the business level, 98% of French SMEs use a PC; 80% are connected to the Internet, and over 50% have websites. SMEs (49%) have websites to provide services to their clients and suppliers, while French corporations (79%) use their website in order to promote their image. Seventeen percent of these organizations engage in E-commerce.
E-Commerce The French are overcoming their fears concerning purchases over the Internet. About two-third of the Internet users pay a monthly visit to one of the top 15 E-commerce websites. This represents an increase of 16% in one year. In addition, 19.5 million Internet users - or four French people out of ten - indicate having already made on-line purchases. With a growth of 21% per year, growth of E-commerce is twice as fast as that of the Internet population.
Management consulting in IT systems (+2%)
Engineering services (+2%)
Facilities management and Third-Party Maintenance of Applications (TMA) (+8%)
Packaged software (+5%) especially Integrated Management Software and PLM solutions, expected to grow respectively by 5.7% and 7.5% each year until 2008.
Application Service Provider (ASP) solutions: this market grew from $400 million in 2004 up to over $1 billion in 2007. This includes hosted CRM solutions, whose growth has been 40% in one year.
Service Oriented Architecture Solutions (SOA) - 70% of its current users are planning to expand these architectures further.
Estimated at $139 billion in 2007, the French market for information and communication technologies - which includes computer hardware/software, telecommunications and electronic components - is growing at a rate of 5% per year. One third of this market is related to telecommunication services, and two thirds from computer hardware as well as software and related services.
The computer & peripherals market has grown by 8% in 2007. The market is driven by the sale of consumer electronics, including smart phones, I-mode, 3G and PDAs. The level of penetration in individual homes exceeds 50%.
The French public sector has greatly contributed to the boost in IT sales, as it currently represents 6% of total IT investments. The French government continues increasing its use of the Internet as a medium of communication with the public; this continues its effort in maximizing use of the Internet in order to improve the quality of public services while generating savings. Launched in January 1998, the Government Action Program for an Information Society (PAGSI) is investing billions of dollars in the automation of VAT declaration, customs declaration, and the filing of social contributions by employees. As a result, over 2.3 million French taxpayers - or 4% of the overall population - filled out their income tax return on the Internet.
Servers The five top server manufacturers are IBM (29.8%); hp (28.2%); Dell (11.2%); and Sun (10.3%) and Fujitsu Siemens (5.4%). Estimated at $687 million, the server market has grown by 4% in 2006. French corporations continue decreasing expenditures related to maintenance and platform administration and supervision while increasing expenditures related to information system's availability, security and quality of service.
Personal Computers According to estimates from market research firm IDC, the French PC market has grown by 13.8% in volume and by 4% in value. It is primarily pulled upwards by the sale of notebooks to consumers, which grew 35%, including 16% for professional applications and 51% for consumers. About 53% of the PCs being sold are now notebooks rather than desktops. The PC market is dominated by HP (18%); Dell (14.8%); Acer + Gateway + Packard Bell (9.4%); Lenovo (7.9%); Acer (7.1%); and Toshiba (3.9%).
Printers The French printer market is dominated by HP, with 42% of this market, followed by Canon (16.2%), Epson (12.3%), Lexmark (9.9%) and Brother (5.7%). This market is estimated at $1.6 billion. The average price for a printer has reached $288. The market for Inkjet printers has dropped by a third since 2002. This market is estimated at $238 million. The sale of laser printers grew in volume by 10%. Multifunction printers represent a $686 million market.
Flat vs. CRT Monitors While only 20 percent of panel displays - 576,000 out of total of 3.3 million - were LCDs four years ago, this rate has gone up to 90 percent now, with over 5 million units being sold. Meanwhile, average pricing for LCDs has decreased threefold to reach $287. This dramatic drop in pricing has affected manufacturers' revenue, which dropped in 2005 and 2006 while volumes kept rising. While market value for LCDs went from $748 million to $4.01 billion from 2002 to 2004, it dropped down to $1.4 million in 2006.
Consumer electronics According to market research firm Gfk, the market for consumer electronics grew by 7% from 2006 with flat TV screens representing 75% of total TV sales. LCD screens represent 85% of these sales. 78% of the panels are HD-ready, 8% are full-HD, while the sale of hard disk recorders turned to be lower than expected. The market for digital Walkman increased in volume by less than 6% against 25% in 2006. On the other hand, the market for Walkman is significant enough to favor the sale of car radios and MP3 docking stations. Also, 2.3 million GPS units have been sold against 1.2 million in 2006.
Best Prospects/Services Portable devices (laptops, palmtops, smart phones, etc.)
I-mode related products
Portable storage devices (USB keys, hard-drives, etc.)
Opportunities The ATAWAD (i.e. "any time, anywhere, any device") era causes the French to increasingly seek portable solutions that provide them with permanent access to data across the Internet, whether personal or professional. The market for devices such as laptops, palmtops, and blackberries is therefore growing very rapidly. Great opportunities are also available for wireless solutions both for the home and the office, especially with the advent of 3G high-speed mobile Internet bandwidth.