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The Israeli Computer Hardware Market, Including Desktops, Notebooks, Servers and Accessories, Is Projected At US$2.2bn In 2010
(M2 PressWIRE Via Acquire Media NewsEdge) Dublin - Research and Markets(http://www.researchandmarkets.com/research/ce3f71/israel_information) has announced the addition of the "Israel Information Technology Report Q1 2010" report to their offering.
The Israel Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Israel's information technology industry.
Market Overview
BMI projects that the Israeli IT market will have a value of US$4.9bn in 2010 and will grow at a five-year CAGR of 6% to a projected US$6.2bn in 2014. The Israeli IT market should have enough momentum from key sectors to expand over BMI's 2010-2014 forecast period, thanks to relatively stable demand from defence and government sectors, and opportunities in verticals like financial services and small and medium-sized enterprises (SMEs). Spending is forecast to resume single-digit growth in 2010, with a boost, particularly in the second half of 2010, from computer hardware tenders delayed from 2009. BMI tentatively expected conditions to improve in the final quarter of 2009 with a seasonal upturn reinforced by procurements deferred from the first half of the year.
The Israeli IT market has a number of positive fundamentals, which should keep it in positive territory during BMI's five-year forecast period. Low computer penetration of around 30% offers potential for continued growth. High internet penetration and growing broadband penetration are drivers for the retail segment, while the financial services sector accounts for about 15% of Israeli IT spending.
Industry Developments In 2009, Israel's high-tech sector suffered as demand for high-tech exports dropped by at least 10-15%, with as many as 10,000 sector jobs feared to be at risk. This represented a major concern for the Israeli government given that high-tech accounted for around 10% of Israel's economy, with annual sales estimated at around US$25bn. Major IT firms were retrenching in Israel, including SAP, Cisco and HP. IT is viewed as an important policy tool for the Israeli government's 2008-2010 socio-economic policy framework. In 2009 the National Economic Council recently submitted a policy agenda to the government, which specified two main policy tracks of reducing poverty and achieving balanced growth. The first track was expected to emerge as the main priority.
As part of its modernisation agenda, the government is pressing ahead with various other strands of its egovernment project. Among other initiatives, there has also been spending on computers in healthcare and the nationwide paperless court initiative. The e-government programme is leading to increased demand for computers, with the Israeli government reaching a supply agreements with vendors like Dell and HP.
Competitive Landscape
The Israeli IT services market is competitive, with leading multinational competitors IBM and HP both estimated to have Israeli IT services market shares of below 10%. Following its merger with EDS, US giant HP was projected to take around 10% of the Israel IT services market last year. HP Israel's software division hosts HP's biggest research and development (R&D) centre worldwide, and the company also has significant production facilities in Israel.
Leading Israeli IT services vendors experienced mixed fortunes in H109. Market leader Matrix reported wins in a number of key sectors including healthcare, financial services, defence and government. In Q309 Matrix reported 100% annualised growth in net profits, and 7% growth in operating profits on flat revenue growth. Ness Israel, by contrast, reported a 19% decline in revenues for Q209, although 30% of this was due to currency translation.
In 2009, enterprise software giant Oracle was in discussion with Israel Credit Cards Cal (ICC-Cal) concerning the future of a major computerisation project being implemented by Oracle. Oracle initiated the project, to replace and upgrade ICC-Cal's computer systems, some 18 months ago. However, differences had apparently arisen between Oracle and ICC-Cal concerning the project. Meanwhile, in 2008, Oracle rival SAP reached an agreement with Ness to purchase the latter's SAP sales and distribution division in Israel.
Computer Sales
The Israeli computer hardware market, including desktops, notebooks, servers and accessories, is projected at US$2.2bn in 2010, up from US$2.1bn in 2009. The market is expected to grow at a CAGR of 5% over the forecast period to reach US$2.7bn in 2014. The Israeli government has launched various initiatives to increase computer and internet penetration.
Spending is expected to resume single-digit growth in 2010, after a contraction in 2009 due to the economic slowdown and unemployment hitting consumer demand for electronics goods. Household consumption moved into negative territory in 2009, with spending on household equipment down by 6.7% in Q109, and although BMI forecast a slight recovery in H209, trading conditions remained tough.
Software Israeli software spending is projected at US$1.0bn in 2010, up from US$973mn in 2009. The packaged software segment is expected to grow at a CAGR of around 7% over the forecast period. Businesses were expected to remain cautious in H209, deferring investments, or looking for good enough solutions to immediate problems. However, there should still be several growth areas going forward. Spending on software is shifting towards the SME segment, which forms the mainstay of the Israeli business sector. Spend on enterprise solutions has grown since 2007, with reviving or emerging areas of opportunity including security, customer relationship management (CRM) solutions and business intelligence. In terms of verticals, the financial sector has been a mainstay of demand, with other key opportunities including defence and healthcare.
IT Services
The IT services segment is estimated at US$1.6bn in 2010, and this is expected to grow at a CAGR of 7% over the forecast period to reach US$2.2bn in 2014. In 2009, there were reports of IT managers scaling back projects, and vendors will have to adapt to an environment where some projects are commissioned more in response to immediate needs.
Government and defence are two key sectors likely to be a continued source of opportunities, because the factors driving spending in each case are not particularly sensitive to economic vicissitudes. Another key area of opportunity is healthcare IT. Despite failing to capitalise in the past, Israel is starting to emerge as a desirable location for packaged applications and localisation services.
E-Readiness
Israel's high PC penetration and the growing availability of broadband access mean that internet penetration is likely to continue its upward trajectory. The government has announced that it intends to make a big effort to narrow the digital gaps that manifest themselves across various demographic lines. Israel's strong broadband growth has long relied on a handful of developments across the market. These include the competition between Bezeq and the cable companies, with five major internet service providers (ISPs) vying for market share from both the corporate and residential markets, which enjoy high PC penetration rates, advanced telecoms infrastructure and minimal regulatory intervention. Another development likely to stimulate growth is the introduction of local loop unbundling (LLU), which will give alternative operators access to Bezeq's network and will stimulate much greater competition. LLU is due to be implemented by end-2009.
Key Topics Covered:
- Executive Summary- SWOT Analysis- IT Business Environment Ratings- Middle East Regional IT Markets Overview- Competitive Landscape- Company Profiles- Country Snapshot: Israel Demographic Data- BMI MethodologyCompanies Mentioned:
- Ness
- IBM
- HP
- Matrix
- Microsoft
For more information visit http://www.researchandmarkets.com/research/ce3f71/israel_information
((Comments on this story may be sent to info@m2.com))
(c) 2010 M2 COMMUNICATIONS
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