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The Netherlands Computer Software Market

Summary – The computer software market amounted to about USD 5.3 billion in 2004, showing
signs of gradual recovery after the general economic downturn. The Netherlands market for
computer software products is expected to grow by about 6 percent to USD 5.6 billion during
2005 in spite of continued less favorable economic conditions and lower consumer confidence.
Demand for software is increasing, particularly in the Small and Medium Enterprise (SME)
segment. The Dutch software market primarily depends on imports. Software exports of
products produced in the Netherlands are limited. Much of the exports consist of re-exports,
with local development limited to mostly business applications and custom products.
The Netherlands offers an open market, which is accessible and welcomes new investments,
both foreign and domestic. The U.S. share of the Dutch Information Technology (IT) market is
considerable, particularly in the software segment. U.S. companies already active in the
Netherlands and those planning to enter the market are expected to benefit from the still
growing demand for software products. Most competition in the software sector comes from
European companies. The current lower U.S. dollar exchange rate is expected to positively
affect U.S. exports.

Market Overview – A modern nation, the Netherlands is strategically located in Europe,
bordered by Germany to the East, across the North Sea from the United Kingdom to the West,
and Belgium to the South. The Netherlands is a founding member of the European Union (EU),
and, although small in size, the country plays an important role in the EU at various political and
governmental levels. About the size of the state of Maryland, the Netherlands is densely
populated with a total population of 16.3 million people. There is an active working population of
7.1 million people, almost 110,000 registered companies with a staff of more than five people,
and 7.0 million Dutch households. The Netherlands is a technologically advanced country with
an excellent transportation and telecommunications infrastructure. The country offers a
compact market, which is used by many IT companies from abroad as a pilot market and as a
central point for distribution of products and services throughout Europe. Not only is the
Netherlands the eighth largest importer from the United States, it also has the well-deserved
reputation as the "Gateway to Europe". The ease of doing business makes it an attractive
market for both new-to-export and new-to-market U.S. exporters. The combination of logistical
expertise developed from centuries of international trade, the fact that almost everyone speaks
English, and the Dutch acceptance of U.S. software products makes the Netherlands a prime
destination market and the leading location for European distribution centers. The Dutch
government stimulates research and innovation in the development and use of advanced
technology products. It supports entrepreneurs in starting up new businesses and developing
innovative high technology products.

Market Trends - The total Netherlands IT market – software, hardware and services -
amounted to approximately USD 13.2 billion in 2004 and is expected to grow to approximately
USD 13.9 billion in 2005. The total Netherlands market for IT and Communication Technology
(ICT) put together amounts to about five percent of the total European ICT market and is the
sixth largest in Europe. The computer software market, estimated at about USD 5.3 billion in
2004, was still the fastest growing segment within the Information Technology sector although
reported growth figures dropped to single digit percentages in recent years. The total software
market is almost equally divided into application software and systems software and growth
percentages for these categories are similar at approximately 50 percent each.
In 2004, the Netherlands GDP increased by a little over one and one half percent from about
USD 568 billion in 2003 to USD 578 billion in 2004. In spite of the slow economic recovery,
observers of this sector say that new opportunities will open up in the coming years. These
opportunities are expected to result from the introduction of new technologies, increased use of
the internet, as well as requirements for security and storage solutions and the need to
streamline business processes.
While UNIX and Windows servers reportedly are still the most commonly used server platforms,
Linux’ market share is estimated at about 15 percent and has started to grow rapidly in
importance. Linux penetration on desktops is still limited. Linux is particularly popular among
users in education and the IT sectors. The Dutch government announced a special program to
promote the use of Open Standards and Open Source Software within the government. At this
time approximately half of all government organizations reportedly are using Open Source
software in some instances but, while much growth is expected for future years and many new
applications are expected, as yet the use of Open Standards and Open Source software is not
really widespread. Firefox is currently among the most widely used applications.
With a penetration of 19 percent/100 users in 2005, the Netherlands has the highest penetration
of broadband use in the world after Korea. A unique characteristic of the Dutch broadband
market is the high level of competition among infrastructures offered by telecom and cable
operators. About 60 percent of the Dutch users are connected via (Asymmetric) Digital
Subscriber Line (A)DSL), with 40 percent hooked up via cable. The demand for fast internet
continues to grow rapidly in the Netherlands and the deployment of broadband connectivity is
increasing both in the consumer and the business market. Stimulated by these high technology
infrastructures and large user segments, there are new developments in E-business, Egovernment
and E-commerce, as well as a trend toward more portable computing and use of
new digital and converging technologies. These developments, many of which first appear in
U.S. markets, are currently driving growth in the Dutch IT market as a whole, including the
market for innovative software products and solutions.
Business Software Alliance (BSA) recently reported that 30 percent of software products were
used without a license in the Netherlands in 2004, down from 33 percent in 2003. In all of
Europe illegal usage is said to amount to some 35 percent.
Among the best prospects for increased growth in the diverse software sector are networking
software and security products, e.g. intrusion detection and prevention products, development
tools, generally all types of Windows, Linux and UNIX-based products, storage resource
management software, E-business applications, e.g. Customer Relationship Management
(CRM), Enterprise Resource Planning (ERP) and Supply Chain Management (SCM), database
and business intelligence products, application management and content management
products, and game software for the consumer market.
Import Market – With large multinational software vendors producing software in various
countries around the world, importing and re-exporting products to and from the Netherlands
and downloading via the internet, accurate trade figures for the software industry are difficult to
obtain. The Netherlands, however, does primarily depend on imports. Approximately 65-70
percent of software products available in the Netherlands are reportedly imported. The United
States is by far the largest supplier (e.g. Microsoft, Oracle, IBM, CA and other multinational
software producers) followed by European software exporters in Germany, particularly SAP AG,
the United Kingdom and France.
U.S. software companies continue to play a dominant role in the Netherlands and form the
largest group of non-Dutch software suppliers. Despite growing competition they are expected
to at least maintain their market share during the next few years based on the quality of
products delivered and the fact that U.S. products generally incorporate the latest technological
advancements available. Important factors that also contribute to the success of U.S. ICT
companies in the Netherlands are their thorough knowledge and expertise in the IT segment,
implementation of new technologies, creative financing methods and advanced product and
services marketing techniques. The lower dollar exchange rate versus the Euro currently also
positively affects imports from the United States. U.S. software firms benefit from the well
developed ICT infrastructure and liberalized telecommunications market in the Netherlands.
A number of U.S. firms are well established in the Dutch market, primarily with local subsidiaries
and through acquisitions. Most of these firms offer various products and services to multiple
industry sectors. Smaller U.S. software vendors are also entering the market with a sales office
or by appointing a distributor to service a special market and/or concentrate on one or two
industry sectors.

Competition - The Netherlands offers a competitive, yet open market, which is accessible and
welcomes new investments, both foreign and domestic. The Dutch government is committed to
promote competition in the market and stimulates the use of new technologies. There are a
significant number of local Dutch software and services firms, ranging from very small (often
serving niche markets) to a few large firms. Most Dutch firms primarily target the domestic
market with business applications – accounting and administrative software - and custom
products. Among the larger, multinational Dutch business software providers are Exact
Software, headquartered in Delft and Unit 4 Agresso NV of Sliedrecht, the Netherlands. Dutch
software vendors active in other areas include Amsterdam’s TomTom with navigation software
for mobile devices and Playlogic International and Guerilla Games developers of gaming
software. Most competition for U.S. companies in the Netherlands comes from other U.S.
software providers with offices in the Netherlands and throughout Europe, as well as from
independent software vendors in Germany (SAP), the United Kingdom and France.

End Users – The top 100 Dutch companies, particularly those that process large amounts of
data such as multinational firms Shell Oil, AKZO-Nobel, Philips, DSM, and banking and
insurance companies, e.g. ING-Group, ABN-AMRO and Rabo Bank and Fortis, have
traditionally been among the largest investors in all types of software products and services.
The Dutch government, particularly Defense and Transportation have also considerably
invested in recent years, as have the public utility and health care sectors. The business market
as a whole has also been a significant user. Limited additional growth is expected in the
business segment for the next few years, with the exception of the SME segment, which
represents an important growth segment and is becoming a significant user of both hardware
and software products. These medium-sized organizations are now starting up new or formerly
postponed ICT-projects. The consumer market is also an attractive segment to concentrate on
for some software vendors. This market has grown rapidly in recent years due to increasing
use of the internet, increases in tele-working arrangements and the number of home offices, as
well as the popularity of games and online gaming.
Important to the Dutch buyer of software products and services in general are: quality of the
product/service delivered, reliability, flexibility and reputation of the supplier, innovative
approach, and cost. Sales cycles may differ quite substantially from those in the United States
depending on the service or product required. Often a pilot project precedes the final choice in
case of a major new investment. On average service contracting periods do not exceed three to
four years.
In doing business with the Netherlands government, as a member of the European Union, the
EU public procurement legislation requires the Dutch contracting authority to publish certain
tender notices throughout the European Union. The U.S. Commercial Service at the U.S.
Mission to the European Union in Brussels, Belgium regularly reports procurement and EUfunding
opportunities that are open to U.S. companies. More information is available at:
The Dutch population of 16.3 million people consists of approximately 4 million people younger
than 20 years of age, 4.5 million people between the ages of 20 and 40 years, 5.5 million
between the ages of 40 and 65, and about 2.3 million people of 65 years and older than 65.
The Netherlands offers a technologically advanced marketplace and the products based on
innovative technologies are in demand. Internet use is also considerable, increasing from 3
million users in 2000 to 10 million in 2002 and 11 million in 2004. In 2004, there were 2.8 million
broadband internet users and the number of GSM mobile phones almost equals the number of

Market Access - There are few barriers preventing U.S. software companies from successfully
importing and selling their products in The Netherlands. As a member of the European Union
(EU), the Netherlands applies the EU common external tariff to goods imported from non-EU
countries. No tariffs or import duties are levied on software products entering the EU countries
from the United States. A Value Added Tax (VAT) of 19 percent is assessed on most imported
products based on their Cost, Insurance, Freight (C.I.F.) value plus the import duty at the port of
entry. Information about tariffs and duties can be obtained from the Dutch Customs: Belasting
Douane, telephone: 011-31-45-5743031, http://www.belastingdienst.nl/9229237/v/e-index.htm .
There are no restrictions on importing or using encryption products in the Netherlands. In some
cases an export license may be required for export of these products from the United States
and/or re-export from the Netherlands.
Information about European Union product legislation, European standards and regulatory
compliance issues is available through: http://www.buyusa.gov/europeanunion/standards.html.
The proposed, controversial European directive regarding legalization of software patents was
recently rejected by the European Parliament. The Netherlands generally has adequate
intellectual property rights legislation and regulations in place and conforms to accepted
international practice and standards. Copyright protection is incorporated in the Dutch copyright
Detailed information regarding the actual establishment and location of a subsidiary office in the
Netherlands may be obtained from the Dutch Ministry of Economic Affairs at: Netherlands
Foreign Investment Agency (NFIA) - http://www.nfia.nl/ . Working in the Netherlands for longer
periods of time generally requires a work permit. Further information can be obtained through
the Netherlands Embassy in Washington, D.C., phone (202) 244-5300, http://www.netherlandsembassy.
org/ or one of the Dutch Consulates General.
The language spoken in the Netherlands is Dutch. English is widely spoken and becoming a
second language to many, particularly in the ICT sector. About 77 percent of the population
speak English, many of them very well.

Market Entry - U.S. manufacturers and service providers interested in penetrating the Dutch
market generally have proven most successful by either appointing a qualified Dutch distributor,
using the Value Added Reseller (VAR) channel, or by opening their own subsidiary in the
Netherlands. More than 7,000 U.S. companies have appointed Dutch agents and distributors in
the Netherlands. Approximately 1,600 American companies or affiliates have operations here.
Companies choosing the distributor channel can expect to benefit from their local
representative’s knowledge of the market and cultural and technological differences, existing
customer base, local marketing and sales experience, and services such as installation,
maintenance, helpdesks and training. Over the years, many U.S. technology firms have been
successful in setting up a local sales office, or even a European headquarters office in the
Netherlands. The country offers a professional and highly trained IT workforce, a neutral
environment, and an excellent infrastructure with transport, telecommunications and distribution
facilities that make it a gateway into the rest of Europe. In planning to establish a presence in
the Dutch market, the U.S. Commercial Service can assist with market research, trade
missions, contact lists, agent/distributor searches, and setting up overseas appointments
through the Gold-Key service. For assistance, contact our office (see end of report for contact
information) or contact our network of U.S. Export Assistance Centers (visit www.buyusa.gov to
find the office nearest you).
Software products and services are generally advertised in the trade journals, through product
seminars and at trade shows. With the growing importance of the Internet to gather and
compare information and to order products and services, an important tool in the marketing and
selling of software products is the use of a website. Use of the Dutch language prevails. Brand
advertising, database marketing and customer loyalty programs are common.
Banking facilities for international transactions in the Netherlands generally meet or exceed U.S.
standards. All banks are accustomed to various international banking transactions. More
information about banking in the Netherlands can be obtained by contacting the Netherlands
Bankers’ Association (NVB) in Amsterdam: http://www.nvb.nl/pages/home/english.asp The
Netherlands has converted to the Euro monetary unit.
Payments in the Netherlands are usually agreed on a net 30-day basis. Dutch companies on
average paid two to three weeks after the agreed upon term.


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Internet users 9,730,000
Internet Users Rank 15
Internet Users Date of Information 2002
 Telephones - mobile cellular 4,081,891
Cell Phone Rank 22
Cell Phone Date of Information  April 1999
 Telephones - main lines in use 9,132,400
Telephone Rank 19
Telephones Date of Information 1999
GDP - real growth rate(%) 0.3
Growth Rank 185
Growth Date of Information  2002 est.
GDP - per capita $26,900
GDP/pc Rank 17
GDP/pc Date of Information  2002 est.
GDP $434,000,000,000
GDP Rank 20
GDP Date of Information  2002 est.
Population 16,150,511
Pop Rank 60
Pop Date of Information  July 2003 est.

My 1st excursion while living in Europe was to, yes, Amsterdam, a tour of which included this brewery.


This site was last updated 6 March, 2009