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Business Support:
Rafał Szajewski
tel: +48 (0) 22 334 9813
+48 (0) 22 334 9875
rafal.szajewski@paiz.gov.pl
The Polish IT market is following Russia’s, the second largest market in Central and Eastern Europe. According to the firm PMR’s research, its value has reached a figure of 19.8 million PLN, and for the second time the growth was in double digits, reaching a level of - 12.4%. The forecasts relating to 2007 anticipate growth in the market’s value to 22.4 million PLN, which would raise the ratio to 13%.
Why is it worthwhile for this sector’s investors to invest in Poland? On one hand the steadily growing market and increase in national demand is a sufficient reason. However, on the other hand, the global corporations, e.g.: Microsoft, HP, Google, Oracle, IBM and SAP have all confirmed by their presence, that Poland is not only of increasing significance as a market to sell their products and services in. The reason for Poland’s success in the rapidly increasing sector for IT services, is above all the availability of personnel. Our unique and most precious resource is people, that are still available and Polish specialists are increasingly providing services to foreign clients.
An equally important factor leading to Poland’s international recognition in IT, is the quality of the services provided and the level of creativity, which often exceeds the expectations of employers. Young Polish IT specialists year after year win top places in international programming competitions, such as ACM, the Imagine Cup and Top Coder.
In terms of locating and developing their businesses in Poland, the investors are being persuaded by the availability of a high quality IT communications infrastructure, the many flight connections and data communications - that are at an identical level to those in Western Europe.
The final factor, the importance of which is losing significance in the light of our high quality services, is still cost effectiveness. The most popular locations for IT centres, are also the largest academic centres - places which can guarantee the availability of the most important assets of firms - their personnel.
The Polish IT market
According to the forecasts, ahead of the Polish IT sector is the prospect of double digit growth right up to 2015. The rapid growth of the IT sector in Poland when compared to Western Europe, is explained by the low saturation level (compared to W. Europe) of personal computers and also by other factors, such as the growing purchasing power of Poles and the relatively small numbers of enterprises that are up to date in IT. Also of great significance is the contracting out of services to specialist entities, which leads to increases in expenditure, the purchase of programming and IT services - with a particular significance for outsourcing.
Among specific factors that will influence the market in the near future, is the privatisation of companies and the resulting freeing up of decision making, relating to the implementation of IT solutions aimed at increasing competitiveness; together with the activation of central government and local authority administration in the public sector field. Another stimulating factor is the increasing importance of the sector of small and medium sized businesses, relating to their generation and needs for services and IT solutions, that when striving to increase their competitiveness, are forced to increase the efficiency of their activities through the introduction of IT tools to aid management. The above factors in the face of a deficit of specialists in the Western European economies, is decisive in the continued attractiveness of Poland in this sector for investment in the coming years.
There are app. 80 thousand people employed in the IT sector in Poland (without accounting for the distribution networks)> In connection with the rapid growth of outsourcing provided for businesses outside the IT sector, the continued steep employment growth in the sector is expected, which by the end of 2009 could increase by over 30 thousand workers.
The dominant segment of the market in 2006 was the computer hardware segment, i.e. computers, monitors and supplementary equipment. The share was 47% under the slightly falling market tendency of recent years. The second largest segment was in IT services, whose share was reckoned at 33%, the third, was the programming market (software), with a 20% share of the market. The tendency for growth in the services market was maintained at the cost of a fall in the sales of programming. A graphic presentation of the value of sales according to market segments is found in the graph below:
The inflow of foreign investments and the transfer of production to Poland is also an important factor, generating a demand for programming in manufacturing, equaled by that of the processing sector. Another factor has been the increases in expenditure on computer equipment generated by growth in the domestic economy’s purchasing power, caused by falling prices of computers and supplementary equipment (printers, scanners, etc...). Among factors affecting market growth are also the flows of EU funds to businesses, which through expenditure on infrastructure improvement and the training of staff will generate demand for IT solutions.
Sectors that because of expenditure increases in recent years have influenced the high level of Polish IT growth, are:
An important market tendency is the rapid growth of interest in programming and IT services from companies in the small and medium sized business sectors. On one hand the increase in competition is forcing clients in this field to implement innovation and IT support within businesses, secondly due to the drop in prices in business applications it’s leading to a greater availability for clients, who up to now haven’t been able to permit themselves the purchase of costly solutions in the category of ERP (enterprise resource planning).
The aforementioned tendencies are linked indirectly to a further characteristic of the market. Currently among app. 10,000 IT firms, 9,000 employ fewer than 10 employees. Medium sized firms form almost 10% of the market, whereas there are only 65 firms that employ more than 250 people. However, falling profit margins and the growing competition from foreign companies has led to the growing tendency for consolidation in the market.
The mergers and takeovers are occurring both among businesses in the same market sector, as in companies engaged in complementary activities – creating programming and IT services (integrated systems). Examples of such mergers are: the merger of ComputerLand with Emax (sale value 1.3 million PLN, 2,300 workers), Infovide with Matrix and Asseco with Prokom. The last merger led to the emergence of a giant with an equity capital of above 5 million PLN. |
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