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Europe’s Software Industry Strongest in Applications

May 5, 2011 No Comments

SOURCE:

The European software industry is mostly clustered in the largest European countries—Germany, the U.K., and France, according to the latest report from IDC. Titled “Europe’s Software Industry: Where Are the ISV Clusters in Europe?” the study reveals that in 2009 top 100 independent software vendors (ISVs) from Europe had market shares in excess of 20 per cent of the global market. In middleware, information management, and infrastructure software, the corresponding market shares were five per cent or less. The local nature of enterprise applications with respect to legislation, business practices and structures, languages and currencies is the main factor behind the strength of European ISVs in applications.

To analyse and understand the Europe’s emerging software-as-a-service (SaaS) vendor community IDC carried out an analysis of a sample of 174 European SaaS vendors. Entitled “Future Software Leaders in Europe: An Analysis of 174 European SaaS Vendors,” the report explained that the European SaaS vendor community is—just like its European peers in traditional software—heavily focused on applications as opposed to system infrastructure software and application development and deployment (AD&D) software. A large majority (90 per cent) of the sample companies offered an SaaS application as opposed to SaaS-based middleware or infrastructure software.

“The majority of the SaaS vendors in our vendor sample had annual revenues of $3 million [Rs.13.70 crore] or less, so they are essentially small ISVs,” said Bo Lykkegaard, research director at IDC. “The upside of this majority of small vendors is that it reflects a significant level of start-up activity in Europe and that many of these small SaaS vendors are likely to see strong growth over the coming years. However, it clearly will take in excess of our normal five-year horizon before the SaaS vendors will make up a significant proportion of the top 100 European ISVs.”

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