Any European software and data processing services company wishing to remain competitive must conduct business on an international level and ideally offer a range of software products. The imperative is a strong presence in Europe, so those companies choosing to limit themselves to home markets will lose ground. These are the findings of the Pierre Audoin Conseil SA, a French market research company. The increasing importance of US companies in the European Community reinforces the message. Six such US companies are listed in the Conseil’s Top Twenty worldwide firms, graded according to last year’s turnover in Europe. Six French firms were also present on the list. While Cap Gemini Sogeti SA had the highest turnover both worldwide and in Europe in 1991, most French firms showed more modest growth. Germany showed a healthy data processing market last year and this seems set to improve still further. British firms declined greatly in 1991, however, and the same fate is said to await the state-owned Italian company, Finsiel SA, and the Utrecht, Netherlands-based Volmac Software Groep NV if they continue their low-key international policy. 1992 is forecast as a year of great structural changes in the European software and data processing industry, with Cap Gemini Sogeti assuming a more dominant leading role within it. However, software is likely to experience more dynamic growth than services, with rates of 15% to 20%, and 12%, respectively by 1995. This general tendancy is reflected in individual markets such as facilities management and computer-aided software engineering. Last year, US firms were at the forefront here, spending 3% of their information technology budget on facilities management, closely followed by British and Swedish companies at 2%. The French, Dutch, Italians and Belgians spent between 1% and 2%, while the Germans and the Spanish spent less than 1%. Of the 150 large European users questioned cited, 62% cost-cutting as their main reason for having used facilities management in 1991; 40% used it to increase the effectiveness of their data processing operations, 36% because of difficulties in finding suitable staff, 13% due to re-structuring prog-rammes and 8% as a result of technical change. According to the Conseil, last year’s expenditure levels of $35,100m in this sector are to rise 20% by 1995. In addition, European firms spent $162,500m on systems integration and complete solutions in 1991. This is forecast to rise annually by 14% over the next four years. Standard software, consultancy, technical support, development, training and data processing formed the basis of last year’s facilities management business at $461,500m, but this spending level is predicted to fall by 13% a year over the next four years. Dynamic growth in computer-aided software engineering is to bring about annual expenditure increases of 27% to $1,365m by 1995 from $520m last year – sounds very doubtful unless some software engineering system becomes as popular and as cheap as Windows. Although things are currently slowing down in the commercial sphere due to uncertainty about IBM Corp’s AD/Cycle concept, the largest international software engineering manufacturers are forecast to retain their position in the market-place. Finally, the European hardware market is much weaker than software and services. Turnover from mainframes is to stagnate over the next few years. Last year’s growth of 4.6% in the four most important European markets – Germany, France, Britain and Italy – comes from sales of workstations and personal computers. The relatively healthy Unix sector saw a turnover of $6,500m in the four main markets with a predicted rise of 15% by 1995, 12% of the entire hardware market, rising to 18% by 1995. The report was written up in Computerwoche.
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