Overview of the Romanian Software and IT Services Industry Forum IT Romania – Austria, Vienna, June 4-5 Valerica Dragomir Executive Director of ANIS Agenda About ANIS Software and IT Services in Romania Software and IT Services Ecosystem Romania’s Competitive Assessment About ANIS About ANIS – who we are Association of software companies in Romania Established in 1998 +100 member companies, with national representation Members’ combined revenue represents +35% of the sector Members’ combined no. of employees is about 10,000 / 16% of the sector About ANIS – what we do Strategic mission: grow the Romanian software industry Strategic priorities: • Promote Romania as a high value added software outsourcing destination • Inform and assist member companies in developing new business models, including developing products, spin-offs, etc. • Growing the domestic software market by promoting enhanced technology use towards SMBs Software and IT Services in Romania Romanian Technology Market in Brief Government is still among the biggest buyers, along Manufacturing and Utilities sectors Local companies are taking the upper hand on large international technology vendors Romania is a solid near-shore/ offshore services center • Delivery for offshore/near-shore clients in the U.S., Western Europe (France, Italy, Germany, Benelux, United Kingdom) and recently the Middle East • ~50 offshore centers – 30% IT services + 20% R&D centers • ~50.000 people working in this segment (2012 estimate) *Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 IT in Romania – quick facts and figures • Romanian IT market - 2.1 billion EUR in 2012 (4.3% growth) • Overall projected growth for the next 3-5 years: 2.4% • Software projected growth for the next 3-5 years: 3.3% 14.90% Hardware Software 14.80% IT Services 70.30% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Software in Romania – quick facts and figures • Custom application development ~ 43M Eur in 2012 (10% growth) • Packaged software in 2012: 312M Eur (7.5% growth) Applications segment 16% 52.25% 31.70% System infrastructure software Application and development software Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Types of Packaged Software Developed 60% 54% 50% 41% 40% 30% 38% 33% 32% 31% 27% 24% 20% 10% 0% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 23% 22% 13% Package Software Revenue Split by Verticals 14% 12% 13% 13% 13% 11% 10% 10% 9% 8% 8% 6% 6% 4% 2% 0% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 5% 3% Packaged software vs. Custom development No. of companies: there is still focus on custom software development projects Development of commercial packaged software 11% Custom software development for third parties 46% 43% Both commercial packaged software and custom development Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Packaged software vs. Custom development Revenue split: proprietary software is more productive in revenue generation 16% 29.50% Sales of proprietary commercial packaged software Custom software development for third parties Provision of other IT services 53% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Software and IT Services Ecosystem Software and IT Services Ecosystem International vendors Intl. vendors Revenues derive from L&M for own applications Production not localized in Romania They do not contribute to the local production Examples: HP, IBM, Microsoft, Oracle, SAP, Siebel Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Software and IT Services Ecosystem International vendors R&D Centers R&D Centers Revenues derive from L&M for own applications They do not contribute to the local production Production IS localized in Romania, through captive R&D Centers Examples: Adobe, Freescale, Intel, IXIA Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Software and IT Services Ecosystem International vendors R&D Centers Outsourcing companies Outsourcing companies Revenue derives from custom development for third parties Contribute to the size of outsourcing business located in Romania They do not contribute to the local production of software Examples: companies present at the meeting Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Software and IT Services Ecosystem International vendors R&D Centers Product companies Outsourcing companies Product companies Revenue derives from L&M from their own applications Production of applications is localized in Romania Contribute greatly to the local production Examples: Bitdefender, Gecad, Siveco, Total Soft, Wizrom Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Romania’s Competitive Assessment Romania’s Competitive Assessment Romania’s IT services offshore market 350 M Eur in 2012 (excluding the export of pure licenses) Structure of offshore/ near-shore market: 9% IT services 29% BPO Services 62% R&D (engineering) Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Romania’s Competitive Assessment - HR • Largest pool of human resources in CEE – 65.000 employees in software and IT services companies in 2013 (estimate) • 300,000 tertiary education graduates/ year, of which +8000 are pure computing graduates (source: DasCloud.ro study) • Technical studies distribution: o Computer Science/ Automation ~30% o Mathematics/ Informatics ~29% o Engineering ~21% o Economic Studies ~9% o Other ~8% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Romania’s Competitive Assessment - HR • 44% of local companies expanded their teams over the last 3 years, while 64% will still expand for the next 3 years • Staff turn-over rates decreased in the last 3 years • Drawbacks: constant need of highly skilled specialists, salaries and benefits are growing Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Romania’s Competitive Assessment – Business Environment • Sectors with growing IT budgets in the next 5 years: manufacturing, utilities, insurance, healthcare, education, business services • Sectors with steady IT budgets in the next 5 years: transport, communications and utilities, finance, and the public sector • SMB Sector will be forced into spending more on and outsource IT operations to be competitive • The Public Sector will have projects openings, under the influence of the EU Digital Agenda 2020 Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Drivers for the Romanian Software Industry Going Mobile Hardware Usage Pent-up Demand EU Funds Increased Internet Penetration New Technology and Delivery Models Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 Main Factors Stimulating the Growth Improvements to IP legislation 44% Industry events/ workshops 45% Increasing number of software development incubators 46% Access to newer technologies 56% Government incetives 57% Specialized curricula in universities 58% increasing availability of IT skills 61% Foreign investment in the local companies 67% 0% 10% 20% 30% 40% Source: “Software and IT Services in Romania”, ANIS-IDC, 2013 50% 60% 70% 80% Software and IT Services in Romania - 2013 • Study on the development of the industry of software and IT services in Romania • Commissioned by ANIS and rolled out by IDC • Published in November 2013 • For more info: http://bit.ly/ITstudy Romanian Software Outsourcing Index - 2013 • • • • Catalogue of companies active in the outsourcing business 55 detailed companies’ profiles 1st edition was published by ANIS in October 2013 Accessible online at: www.anis.ro/rsoi Thank you ! Valerica Dragomir executive director valerica.dragomir@anis.ro Nicolae Filipescu 39-41, 1st floor, sector 2, Bucharest, 020961 +40-21-3121397 www.anis.ro www.facebook.com/anis.romania www.twitter.com/ANIS_RO