UK retain strong presence on European software stage

Published at 16:08 PM on 11 December 2008

· PwC rank top 100 UK and European software companies

· World market dominated by US and Japan

· Sage tops UK rankings

British firms make up 15 per cent of the top 100 software companies in Europe as compiled by representatives of the following software associations (European Software Association, AFDEL, BASDA) and PricewaterhouseCoopers LLP.

With worldwide revenue of €13.3bn (2.5 per cent of the overall revenue generated by the entire top 100) these UK companies created significantly more wealth than their Western European counterparts. The German and French software companies that featured in the EuroSoftware100 generated €4.3bn and €1.2bn respectively.

In 2008, the European market represented approximately 30 per cent of the overall worldwide software market generating revenues of approximately €56bn.

Home-grown talent

Sage topped the UK chart, with Misys and Logica in second and third place. Their combined revenue totals €1.5bn. However, due to the dominance of SAP the top three German companies created €8.9bn (£7.4bn) in 2008. SAP followed by Sage came out top of the home-grown European software companies.

Jass Sarai, head of Software and IT Services, PricewaterhouseCoopers LLP, said:

“Following significant UK presence in the Top 100, the UK’s strength lies in the number of smaller companies ranked in the top 200. In fact 33 UK businesses were ranked on this extended list, producing a total global revenue of €26bn - four per cent of the €617bn produced by top 200 companies in total.”

Inbound dominance

The three top US software vendors listed (who are also ranked in the top three in the world) generate more than €55bn worldwide, the equivalent of the entire European software market. US software suppliers make up 75 per cent of companies in the top 20 listed and 30 per cent of the top 100.

“As expected the US software vendors feature highly in the ranking and have considerably strengthened their position in the European market mainly through acquisitions’” added Jass.

Japan are another dominant inbound force making the most of the European marketplace, with those Japanese companies listed in the EuroSoftware100 forming 32 per cent of the total worldwide revenue.

UK software managing in the downturn

Following forty years of IT growth, sales and marketing for these UK software companies has been easy. However as Western Europe enters recession the industry needs to start selling more for less.

“Only one in five business-to-business deals ever get closed in the UK. This worrying statistic should spur the UK software industry on to cement their lower cost sales strategy in these difficult times and remain a force to be reckoned with in Europe,” he said.

Further consolidation is also expected in the downturn as larger, opportunistic names acquire smaller companies to add to their product and service portfolio which may include establishing their software as a service offering.

Jass commented: “Many players have already taken advantage of the opportunities for consolidation and this relative saturation could curb the ambitions of some of the American vendors. However, the smaller software companies are likely to still find themselves the target of an approach enabling them to gain ground in Europe and the potential to emerge as bigger and stronger players in the marketplace.”

“These are challenging times for the UK software industry. Those companies who seize the opportunities provided by technological shifts, remain agile and have a clear strategy to navigate through this downturn, will emerge stronger as the market reshapes itself,” he concluded.

ENDS



For more information contact:

Sian. Mannakee
Technology, Telecoms, Entertainment, Media, Hospitality and Leisure, PR Manager, PwC 
Tel:020 7213 2538 
Mobile:07715 484 884 

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