Software and services companies in continental Europe have no reason to expect a recovery in 1994, particularly among those that rely heavily on professional services, says a report just issued by Paris-based market research firm Pierre Audoin Conseil. The whole world is waiting for a recovery in information system services, but it should take two years to establish itself. Recovery has certainly begun to manifest itself in Great Britain and in certain Scandinavian countries. On the other hand, the crisis has begun to deepen in France, Italy, Spain and Germany. A recovery should not, therefore, be expected a priori in 1994, the report says. Jean-Francois Perret, managing director for Audoin Conseil, said recovery from the recession should occur between 1993 and 1995, with variations depending on the sector. Overall, the European software and services market saw its growth fall this year to between 2% and 3%, while some sectors, such as technical assistance have seen a decline of between 4% and 5% in 1993, he says. Furthermore, the market for industrial technical assistance declined 10%. France’s professional services and systems integration market is expected to decline by up to 2 by the end of the year in real currency and 4% in nominal currency. This compares to the UK professional services market (including technical assistance, consulting and project realisations), which has seen 6% growth this year, compared with only 1% in 1992, Perret said. The drop is very significant in the professional services sector, which carries a bigger weight here than in other countries, Perret said. The situation will have a direct consequence for companies like Cap Gemini Sogeti SA, which are heavily dependent on that sector. In France, for the first time, CGS will lose its place as the leading software and systems house, to the gain of IBM-CGI Informatique and Sligos-Marben, says the report. Cap gemini’s difficulties are temporary, but the group must confront the aggressivity of a certain number of competitors, in terms of acquisitions.
