Boston, MA -- (ReleaseWire) -- 12/07/2012 -- Market Overview
BMI View: French IT spending is expected to reach US$47.2bn in 2012, up 3%, with BMI downwardly revising its forecast after the PC market reported low single-digit growth Q112. French spending on IT products and services is projected to report flat or negative growth in 2012, with the most robust sector being IT services, where virtualisation and cloud computing offer opportunities. Newly elected President Francois Hollande's focus on growth could stimulate additional public sector demand but much will depend on a resolution to the eurozone crisis. Longer-term demand drivers include increasing operational efficiency, coordinating global supply chains and modernising logistics and warehouse functions.
Headline Expenditure Projections
Computer hardware sales: US$10.1bn in 2011 to US$10.4bn in 2012, +1% in US dollar terms. Growth forecast in US dollar terms downwardly revised due to macroeconomic factors and analyst modification following a sharp contraction in Q411.
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Software sales: US$13.8bn in 2011 to US$14.1bn in 2012, +3% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but faster growth is expected in hosted software services.
IT Services sales: US$22.0bn in 2011 to US$22.6bn in 2012, +3% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, with one potential demand driver being organisations looking for help to utilise efficiencies from cloud computing
Risk/Reward Ratings: France's score was 74.2 out of 100.0. France ranks 4th in our latest Europe RRR table, behind the UK, Germany and Sweden, but ahead of CEE markets such as Poland, Russia and the Czech Republic.
Key Trends & Developments
- In 2012 the French computer hardware market is expected to record flat or low single-digit growth, following a sharp market deceleration in 2011.Besides the economic situation, the growing popularity of tablets and smartphones was another factor to impact on sales of traditional form factor such notebooks. Consumers who increasingly prize mobility were purchasing these alternative connectivity devices and postponing upgrades of their PCs.
- The French government's National Investment Programme should provide a boost to the market. In 2011 the French market for cloud computing was estimated at around US$2bn, equivalent to around 5% of the total value of the IT services market. By 2016, it is forecast that the market opportunity could be worth around US$9bn.
- As the eurozone crisis has intensified in H112, this has had a constraining effect on business confidences. Once the crisis is resolved, IT spending could leap forward again as customers make good on pent-up demand. BMI also believes that banks and telecoms operators were among those spending in 2011, while the search for energy efficiency in many sectors should also drive spending.
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