Developing Telecoms | Croatia: elections stunt your growth

21 May 2012

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Croatia: elections stunt your growth

Monday, 13 October 2008 15:08

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The IT services market in Croatia slowed in 2007 compared to the two previous years. According to a new study from IDC, the market grew 15.2% year on year to US$365 million, down from nearly 40% annual growth in 2006. In local currency, IT services market growth was 10.2% in 2007, compared to 5.9% in 2006.

IDC attributes the slower growth to parliamentary elections held in November 2007 and to a number of postponed IT services deals. In 2008, the Croatian IT services market is expected to decelerate even further, to 7.6% year-on-year growth, with total IT services spending reaching US$393 million for the year.

"The Croatia IT services market has been growing rapidly, in line with the country's preparations for EU membership. However, heightened competition, an economic slowdown, and rising inflation predicted for the immediate future could slow this growth considerably," said Boris Zitnik, Managing Director, IDC Adriatics.

The top three vendors in the Croatian IT services market in 2007 were Siemens IT Solutions and Services, Combis, and Apis IT. Together, they controlled a quarter of the total market. While Combis and Apis IT maintained their positions from 2006, Siemens IT Solutions and Services climbed from fourth position to first, replacing IBM.

The combined customisation category (applications consulting, customisation, and custom application development) accounted for the largest share of the IT services market in 2007, with 25.3%. Systems integration services were second in demand, with 24% market share, followed by hardware and software support and installation, with 23.7%. IT outsourcing, which grew 63% in 2006, increased just 2.6% year on year in 2007, to account for 16.4% of total IT services revenue.

The combined finance sector was the largest vertical market in Croatia in 2007, with 22% market share. The government sector, which was in first place in the prior year, was second with 21.5% in 2007. The telecommunications sector was the third-largest vertical sector, with 20.3% market share. The fastest-growing market segment was transportation, increasing 53.3% year on year, though from a relatively small base.

As the Croatian IT services market matures, IDC expects it to see slower growth, at around 11% a year over the next five years.

* Croatia IT Services 2008-2012 Forecast and 2007 Vendor Shares (IDC #ES04Q, September 2008), presents the Croatian IT services industry in 2007 and forecasts expenditures on IT services through 2012. The study provides market size information, vendor market shares, and revenues by IT services categories and vertical markets, and includes profiles of the top 10 IT services providers, including their IT services portfolios, their presence in individual vertical markets, and their largest contracts in 2007.