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Slovenia Information Technology Report Q2 2011

Slovenia Information Technology Report Q2 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Apr 15, 2011

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Quick Overview

Slovenian IT spending is forecast to report a steady expansion in 2011 as the market recovers from the impact of the economic crisis. In 2010, IT spending remained affected by Slovenia’s worst recession in more than 20 years and fiscal austerity domestically and in the eurozone will continue to weigh on demand.
In 2010, Slovenian businesses remained reluctant to spend on IT due to tighter credit conditions and the unfavourable external economic environment, with many projects deferred. The recovery is expected to gather pace in H211 as the economy improves but risks remain to the downside, with deleveraging still an underlying economic factor.
The fundamentals of rising incomes in a context of below-EU average PC penetration mean this small IT market should advance at a compound annual growth rate (CAGR) of 5% over the 2011-2015 forecast period. However, IT spending growth is dependent on business and consumer confidence in a sustained economic recovery.
Industry Developments Slovenia is determined to consolidate its status as one of the most advanced of the 2004 EU accession states. EU funding for its Competitiveness and Innovations programme for 2007-2013 period includes substantial sums to support ICT policies. There are also additional sums for entrepreneurship and innovation, which can have IT applications.
Across the public sector, tenders continued to be issued during the economic slowdown. Health is one priority area. In 2009, the Health Insurance Institute of Slovenia announced that it would roll out an electronic health insurance card system. The system will use a card that will eventually be carried by every citizen and presented at the point of healthcare delivery.
Competitive Landscape The development of the tablet market has lagged behind many other countries, with the distributor of Apple products in Slovenia announcing that sales of the iPad would start by the end of January 2011. Prices are relatively high, with the Wi-Fi models costing EUR499-699 for a 64GB model, while 3G models cost up to EUR799.
IBM won a major contract in 2010 when the Slovenian Tax Administration awarded the US vendor a US$404mn contract to modernise its tax collection system. The new system is due to be operational by 2014. This success continued a good run in the public sector for IBM, which in 2009 won the contract from the Health Insurance Institute of Slovenia to roll out the electronic health insurance card system. HP was still the leader in terms of overall PC market share in Q310, followed by Lenovo and Acer.
Lenovo performed well and was the second highest selling PC brand, having ranked third in the market in 2009, As the hard-copy peripherals segment approaches saturation, the top three vendors, HP, Samsung and Canon, have nearly three-quarters of the market.
Computer Sales Slovenian sales of computer hardware (including desktops, notebooks and accessories) are projected at US$513mn in 2011, with modest single-digit growth compared with the previous year. In Q310, the PC market slipped back into negative shipments growth, with the main factor behind the negative trend being continued business caution in the corporate and small and medium-sized enterprise (SME) segments.
In 2011, migrations to Microsoft’s Windows 7 operating system still have the potential to help trigger a cycle of hardware upgrades, although much will depend on business and consumer confidence. There could also be a boost from previously delayed purchases as a result of the economic situation, although due to the impact of fiscal austerity programmes most growth is likely to be in the second half of the year.
Software The software market in Slovenia is projected at US$214mn in 2011, with a return to single-digit growth following stagnation in 2010. The economic crisis led some companies to review IT budgets or look to defer systems updates and margins pressure encouraged them to focus on reducing costs. However, solid market growth is expected through to 2015, with software revenues growing faster than hardware at a CAGR of 7%.
Slovenia is a relatively mature software market for the region and the relative saturation (79%) of the large enterprise market in terms of basic enterprise resource planning (ERP) applications should encourage vendors to look to other products to maintain growth, or else focus more on vertical specialisms. Although large and very large enterprises still account for about half of the spending on enterprise application solutions (EAS) in Slovenia, more than 64% of new installations are reported to come from SMEs.
IT Services The Slovenian IT services market is projected to grow to US$290mn in 2011 with a return to single-digit growth as the economic situation improves. The market is expected to pick up from the second half of 2011 and a 7% 2011-2015 CAGR is forecast, with support and maintenance accounting for more than 25% of revenues.
In 2010, IT services companies continued to benefit from IT projects tendered across various sectors ranging from the public sector to banks, education, retail and financial institutions. In the long term, the IT services market is set to expand as Slovenian organisations upgrade IT systems to gain or maintain competitive advantage following EU accession. Telecoms service providers represent an opportunity for IT vendors due to rapidly growing demand for data-intensive mobile applications.
E-Readiness The Statistical Office of the Republic of Slovenia (SORS) has released data about ICT adoption by enterprises. The statistics, from Q108, show a fascinating picture of the utilisation of ICT by enterprises of various sizes and of attitudes towards IT spending.
The overall picture suggests room for further market development, particularly among smaller and medium companies, but also a need for continuing education by vendors. Internet access was nearly ubiquitous, at 97% among companies with 10 employees or more, up by 1% from the same period of the previous year. Broadband access reached 80% among the same group.
The large majority of companies still use the internet mainly for email and information rather than ecommerce. Nearly 30% of enterprises with 10 or more people do not even have a website. Only 18% of large companies enable online ordering on their website and only 5% enable online payment. The corresponding figures for small and medium companies are even lower.
In the case of intranet, there is a clear gap between larger companies and smaller ones: 75% of larger companies had an intranet service, compared with just 40% of medium companies (50-250 employees) and 26% of small companies. Intranet use was highest in computer-related business and lowest in the construction and hotel sectors.
In the financial sector, access to internet was 100%, as was e-government usage. In the financial sector, 35% of enterprises believed the implementation of ICT projects in the previous year had significantly improved work routine and the development of new products and services, considerably higher than the average for all sectors

Table of Contents

Executive Summary ........................................................................................................................................ 5
Table: Slovenia’s Internet Coverage, Q108 .......................................................................................................................................................... 8
Table: ICT Indicators (% of population) .............................................................................................................................................................. 9
SWOT Analysis .............................................................................................................................................. 10
Slovenia IT Sector SWOT .................................................................................................................................................................................... 10
Slovenia Telecoms Industry SWOT ..................................................................................................................................................................... 11
Slovenia Political SWOT..................................................................................................................................................................................... 12
Slovenia Economic SWOT .................................................................................................................................................................................. 12
Slovenia Business Environment SWOT ............................................................................................................................................................... 13
IT Business Environment Ratings ................................................................................................................ 14
Europe ................................................................................................................................................................................................................ 14
Table: Regional IT Business Environment Ratings ............................................................................................................................................. 17
Europe IT Markets Overview ......................................................................................................................... 18
Slovenia Market Overview ............................................................................................................................. 24
Government Authority ......................................................................................................................................................................................... 24
Background ......................................................................................................................................................................................................... 24
Hardware ............................................................................................................................................................................................................ 25
Software .............................................................................................................................................................................................................. 27
Services ............................................................................................................................................................................................................... 29
Industry Developments ....................................................................................................................................................................................... 30
Priority Areas ..................................................................................................................................................................................................... 31
Industry Forecast Scenario ........................................................................................................................... 33
Table: Slovenian IT Sector, 2007-2015 (US$mn unless otherwise stated) ........................................................................................................... 35
Country Context .................................................................................................................................................................................................. 36
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 36
Table: Consumer Expenditure, 2000-2012 (US$) ............................................................................................................................................... 36
Internet ............................................................................................................................................................................................................... 37
Table: Internet Sector, 2008-2015 ...................................................................................................................................................................... 37
Macroeconomic Forecast ................................................................................................................................................................................... 39
Slovenia – Economic Activity .............................................................................................................................................................................. 41
Competitive Landscape ................................................................................................................................ 42
Hardware ............................................................................................................................................................................................................ 42
Software .............................................................................................................................................................................................................. 42
IT Services .......................................................................................................................................................................................................... 43
Internet Competitive Landscape ......................................................................................................................................................................... 44
Company Profiles .......................................................................................................................................... 46
IBM Slovenia ...................................................................................................................................................................................................... 46
Hermes SoftLab (HSL) ........................................................................................................................................................................................ 47
Microsoft............................................................................................................................................................................................................. 49
Country Snapshot: Slovenia Demographic Data ........................................................................................ 51
Section 1: Population .......................................................................................................................................................................................... 51
Table: Demographic Indicators, 2005-2030 ....................................................................................................................................................... 51
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 52
Section 2: Education And Healthcare ................................................................................................................................................................. 52
Table: Education, 2002-2005 ............................................................................................................................................................................. 52
Table: Vital Statistics, 2005-2030 ....................................................................................................................................................................... 52
Section 3: Labour Market And Spending Power ................................................................................................................................................. 53
Table: Employment Indicators, 2001-2006 ......................................................................................................................................................... 53
Table: Consumer Expenditure, 2000-2012 (US$) ............................................................................................................................................... 53
Table: Average Annual Wages, 2000-2012 ......................................................................................................................................................... 54
BMI Methodology .......................................................................................................................................... 55
How We Generate Our Industry Forecasts ......................................................................................................................................................... 55
IT Industry .......................................................................................................................................................................................................... 55
IT Ratings – Methodology ................................................................................................................................................................................... 56
Table: IT Business Environment Indicators ........................................................................................................................................................ 57
Weighting ............................................................................................................................................................................................................ 58
Table: Weighting Of Components ....................................................................................................................................................................... 58
Sources ............................................................................................................................................................................................................... 58