After two years of stagnation while customers postponed system development contracts, France’s software and systems integration companies began to recover last year, with a 3.8% increase in revenues to the equivalent of $13,200m, which their industry association expects to grow another 6% this year. Total revenues, including international sales, grew at about the same rate, 3.2%, to $16,970m. Despite the growth, the association, Syntec, reported that the French market trailed its neighbours the UK and Germany, which each reported market growth of nearly 5%. Portugal, which is starting from a smaller base, reported a whopping 9.1% growth, according to Paris-based market research firm Pierre Audoin Conseil. France is rather bringing up the rear with respect to growth in other European countries, said Francois Dufaux, from Anglo-French company Sema Group Plc and a Syntec officer. However, he added, 20% of French companies’ revenues come from abroad, which puts France ahead of most other European countries. Furthermore, he said international revenue growth should be up two percentage points in 1995. Hiring in the systems engineering market will be up significantly in 1995, said Syntec president Eric Hayat. Our studies show that member companies expect to hire between 6,000 and 8,000 people. Facilities management, or infogerance as it is called in France, was the fastest growing sector of activity for the country’s SSIIs (pronounced ess-ess-duhz-ee, the French acronym for software and systems engineering and integration companies), rolling along at at a 12% to 14% clip. Eric Hayat, Syntec’s president, noted that the rate of growth drops below 10%, however, once the revenues from companies that manage their parent company’s systems are eliminated. As an example, he cited Axone SA, the facilities management subsidiary of IBM France SA. Indeed, Axone reported 1994 revenues up a whopping 36%, to some $325m, over half of which is business done with IBM. In a report in Les Echos, however, Axone chief executive Gerard Jousset said that he expected that percentage to drop below the 50% barrier this year, after the company won several outside contracts, including the bank CIC and cosmetics maker Elizabeth Arden. Due to what Axone says is the investment necessary to compete, its net profit was down to $1.87m from $4.6m. Axone was not alone in its success, however. The facilities management division of systems integrator Steria SA reported 1994 revenues up 22%, to some $37.5m. The second-fastest growing sector of activity in 1994 was software and open systems, at between 7% and 9%. Hayat said that about 80% of customer requests involve the development of systems architected with client-server and object-oriented technologies. In third place came engineering and integration of systems and networks, with a growth rate of between 5% and 7%. The manufacturing and energy industries were the most active in France in 1994, accounting for 30% of total industry revenues and growing at between 5% and 7%. The traditionally strong banking and insurance sector hardly grew at all, progressing only between 1% and 2%. Jean-Claude Mailhan, president of Syntec’s market trends committee, noted that Syntec remains anxious to see a deregulation of France’s telecommunications market as quickly as possible. France remains an isolated case among those who are accelerating their deregulation, he declared. We think it will be good for the country and good for industry. Hayat added, As systems integrators, we can’t but be favourable to reducing the cost of telecommunications and thus the cost of maintaining networks.
