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European ICT Market and Successful Entry into these Markets

European ICT Market and Successful Entry into these Markets. Claus Traeger cons im – Consulting for International Channel Marketing AL Invest Business Meetings – e-PME SIMO 2006 Madrid, Spain – November 7 th to 12 th. World ICT Market by region. 1,9 bi €. Source: EITO 2006 / IDC.

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European ICT Market and Successful Entry into these Markets

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  1. European ICT Market andSuccessful Entry into these Markets Claus Traeger consim– Consulting for International Channel Marketing AL Invest Business Meetings – e-PME SIMO 2006 Madrid, Spain – November 7th to 12th

  2. World ICT Market by region 1,9 bi € Source: EITO 2006 / IDC

  3. World ICT market growth by region Source: EITO 2006 / IDC

  4. European ICT Market by country 660 bill € Source: EITO 2006 / IDC

  5. EU* ICT market growth(1997 - 2007) Source: EITO 2006 / IDC (* excluding Cyprus and Malta)

  6. European* ICT Market by product • Value = € 659 bi • HW (25%)SW (75%) • IT (47%) TC (53%) • 3.2% of GDP (*includes EU, N, CH, RO, BG) Source: EITO 2006 / IDC

  7. WE ICT market growth by segment Source: EITO 2005 / IDC

  8. European IT Market by country 312 bill € Source: EITO 2006 / IDC

  9. European IT Market annual Growth,by country Source: EITO 2006 / IDC

  10. European TC Market by country 348 bill € Source: EITO 2006 / IDC

  11. European TC Market annual Growth,by country Source: EITO 2006 / IDC

  12. Vertical ICT Markets in Europe Source: EITO 2006

  13. Trends in Europe (SW) • SW Growth: 5,5% (05) and 5,8% (06) • Application solutions: • ERP: upgrades, +efficiency • manufacturing, finance, retail/wholesale, business services • CRM, SCM: upgrades, new investments • Gov., transport, utilities, healthcare, education, bus serv. • SCM, SRM, PLM: +adoption in manufacturing • CRM: in verticals – banking and insurance • Industry specific applications: usable and attractive solutions • finance and healthcare • Regulatory compliance: manufacturing, healthcare and finance

  14. Trends in Europe (SW) (cont.) • System Software: • Infrastructure: security, storage, resource mgt. • Optimization and simplification of IT Infrastructure • Business Intelligence: growth but saturation • Software Tools: Web-enabling • Open Source: important for flexibility and cost • IT Services – growth rate 4,7%(05) and 5%(06) • Outsourcing and Management Services • More in Northern Europe than Central and Southern Europe • Buyers: const-conscious • Offshore competition: Eastern Europe

  15. Spain (ICT Sector) • Economic Growth: 3,4% (05) and 3,2% (06) • Highest in the EU-Zone • Benefit: IT spending • ITC Growth: 6,6 (05) and 4,0 (05) • IT Growth: 6,8% (05) and 6,7 (06) • HW: recovery (PC, Laptop, Printers) • SW: Sys. Infrastructure, Application Development, Deployment sw. • Positive  Application SW: CRM, ERP, SCM, PLM • IT Services: Outsourcing (competition) • TC Growth: 6,5% (05) and 2,7% (06) • Fixed tel. , DSL , Mobile tel. , G3/UMTS

  16. % Co. Year 2000 84,7% 11,3% 3,9% 0,2% Number of ICT companies inGermany by revenue Source: Statistisches Bundesamt, IfM, BITKOM

  17. Market share of ICT SME inGermany WZ 30 – Office technology, Hardware WZ 32 – Telecommunications WZ 72 – Databases, IT Services, Software Source: Statistisches Bundesamt, IfM, BITKOM

  18. Number of ICT companies inGermany by number of employees Turnover by Employee:±€ 115.000 / year > 90% of thecompanies are SME # of companies = 50.000 Source: BVIT, Bonn

  19. SME Forms of Internationalization • Direct • Branch • Company acquisition • Indirect • “Big Players”(e.g. IBM, SAP, MS) • Local Partner

  20. Partnership • Local partner: • Local presence • Market knowledge • Clients • Portfolio of Products/Solutions/Services • Products: • Complementary • Competitors • Another segment • Other market segments (Eastern Europe, Magreb) • Other technologies (Java, Web Services, Linux, SOA)

  21. Conditions • Conditions: • Have Products/Services/Solutions • Quality, International, Material • Preparation for international markets: • Investment of resources: Human and Financial • Internal organization of the company • Experience with indirect sales • Reference clients • Higher probability to succeed: • Niche market / Focus • Market knowledge: • Characteristics of the market • Competitors • Competitive advantage

  22. European Mentality in Business (1/2) • Serious, formal • Long time thinking  Long run partnership • EU Markets = Mature Markets • Patience; Gain confidence through competence • Do what was agreed: in time! will be expected! • Send and answer post • E-mail, fax, post • Everybody ‘speaks’ English / ‘Portuñol’

  23. European Mentality in Business (2/2) • Which are the most important factors for an European Company to choose a Business Partner: 1. Reliability / Trust 2. References 3. Price 4. Technology (Reseach done by an English business magazine among Managers in several European countries)

  24. Presentation • Presentation of your Product / Services: • Know your partner’s intention • ‘Personalize’ the Presentation(tec, sales,mgt, ceo) • ‘Elevator Speech’: • what is the product / service • what for it is used | what problem it solves • goal market | advantages for the end user

  25. Successful Meetings & Good Business! Thank You! Claus Traeger consim Consulting for International Channel Marketing ctraeger@consim.de www.consim.de

  26. consim – Consulting for International Channel Marketing • Activities • Find partners in Europe/L.A. according to companies’ needs • For groups and/or individual companies • Companies preparation for international markets • Internationalization of the company • Speeches, courses, coaching, monitoring • For individual and/or group of companies • Marketing support needed to enter the European markets • Event participation (fairs, congress) • Public Relations • Publicity • Market Research • Additional support needed (legal, location, financing, etc.)

  27. W.Europe Economic Background • Gross Domestic Product (GDP): • W.Europe =€ 9.224 billion • Germany =€ 2.045 billion Source: Eurostat

  28. General situation and Trends in theICT sector in Europe • Demands of ICT Economic Environment • Trust of companies and investors • Companies performance • Trends in ICT • Return on Investment (ROI) • Subjects of costs and efficiency • Optimization of existing infrastructure • Returns on passed investments Source: EITO 2003 / IDC – update October

  29. Negative aspects of the development • Delay in investments in basic industries • Unused Capacity • Selective Demands • ROI, ‘is the new technology really necessary’ business focus • Price war

  30. Positive aspects of the development • IT in small and medium size enterprises (SME) • Integration of internal systems • Integration of external systems • Outsourcing: • Fix costs Variable costs • ‘Core competence’ • Security • eEurope 2005 • National Governs • E-Health • E-Education • Basel II Agreement • E-Business: Web interface of existing applications

  31. Long run Trends • Off-Shore services • Price pressure • Virtualization • Pool of decentralized resources • Performance, economy of scale, reliability, existing capacity • Integration of applications • Convergence of IT e TC • Internet: Contend Management and paid content • Mobile computing and Wireless • Mobile solutions (WiFi, Bluetooth)

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