BMI's Executive Summary

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Overview

BMI expects the total size of the Croatia IT market to increase from US$920mn in 2007 to around US$1.5bn in 2012. The strong recent growth in PC and notebook sales has mainly been the result of rising private consumption, boosted by growing affordability of computer products and runaway consumer credit growth. Computer sales will continue to benefit from falling prices and more aggressive vendor and distributor promotion, as well as the generally dynamic economy. Real GDP growth weakened somewhat in 2005 to around 4.3%, after a strong economic performance in 2004 when expansion reached 4.3%. 2006 will see a strong growth rate of 4.8%.

The IT market is forecast by BMI to grow at a CAGR of 11% over the forecast period with software and services (40% of total spending) leading the way on the back of a steady rise in private sector investments. The IT market will therefore grow at a rate well above that of the economy as a whole, with pre-accession EU funds continuing to provide a stimulus. Spending on software and services are likely to grow fastest over the forecast period, and will approach a combined 50% share of spending by the end of the forecast period.

Competitive Landscape

The leading distributor of computers in the Croatian market is supplier HG Spot, which supplied around 15% of the notebook market in 2006. The best selling brand names on the Croatian computer market include Hewlett Packard (HP), followed by IBM and Dell. Microsoft dominates the software segment. However all the major global vendors are present and the market is competitive with more than 20 other vendors competing for share.

Across all software segments, global vendors account for around 40% of revenues, with local vendors taking the rest. As the Croatian IT market continues to grow, IT services are becoming a more important opportunity for multinational and local vendors. The largest IT services providers by revenues include IBM Global Services, Combis, and S&T Hermes Plus. Many IT service vendors reported double digit growth in fiscal 2007.

Industry Developments

Building on the e-Croatia 2003-2007 programme, the government plans to complete the computerisation of the education system and networking of government systems, and bring key services like health and justice online. The Croatian government's spending on IT is increasing, driven by a variety of projects ranging from basic support to pensions and social security management. Government spending is also stimulating the whole sector indirectly by generating interest from other sectors in the wider economy. This is still substantially state controlled, and there are still many sectors either owned or more or less directly administered by the state.

Computer Sales

A total market value of around US$400mn was estimated for PC sales in 2007, including notebooks and accessories. Major projects in government, telecoms and financial services sectors should support an increase in total hardware spending to more than US$600mn by 2009. Because of falling prices the dollar value of the market is increasing at a slower rate than the local currency value, given the kuna's appreciation against the dollar. The trend towards notebooks is continuing, with notebooks now accounting for more than one quarter of new sales.

Software

The total 2007 value of licensed software sales is estimated at around US$156mn. Spending is expected to increase faster than for the IT market as a whole with the fastest-growing sectors being telecoms, government, and home users. The most important verticals for enterprise applications are manufacturing and wholesale, with basic modules such as supply chain management remaining the most popular.

Services

The Croatian IT services market was worth US$276mn in 2007 according to BMI estimates, and is expected to be the fastest growing IT market segment over the forecast period. Following some slowdown in government spending during H206, some major projects fuelled sharp growth in 2007. IT services account for as much as 30% of all IT spending in Croatia presently. Government represents around 20% of the opportunity.

Contents

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Chapter 1 - Executive Summary

Overview

Competitive Landscape

Computer Sales

Software

Services

Special Focus: Croatia Government Spending

e-Readiness

Special Focus: e-Government

Croatia IT Sector SWOT

Croatia Business Environment SWOT

Chapter 2 - CEE Regional IT Markets Overview

IT Penetration

Market Growth & Drivers

Sectors & Verticals

Chapter 3 - Market Overview

EU Authority

History And Market Structure

Hardware

Software

Services

End-user Analysis

Industry Developments

Chapter 4 - Industry Forecast Scenario

Table: Croatia IT Historical Data And Forecasts

Chapter 5 - Economic Forecast

Table: Croatia Macroeconomic Data

Chapter 6 - Country Snapshot: Croatia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 7 - Competitive Landscape

Chapter 8 - Company Profiles

IBM Croatia

M San Group

CS

Oracle

How We Generate Our Industry Forecasts

IT Industry

Chapter 9 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Europe Information Technology: Sample of  
Companies Ranked

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Company profiles, including SWOT (strengths, weaknesses, opportunities and threats) analyses, business activity, leading products and services. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company profiles and SWOT analyses covering competitive positioning; leading products, services and brands; annual sales and share of domestic hardware, software and components markets; headline financials and M&A; pan-regional expansion strategies and strategic partners. Companies covered include:

Network of Information Technology Sources

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BMI's European IT Reports are based on an extensive network of multilateral organisations, government departments, IT industry associations, chambers of commerce and company reports. Information sources include: