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Turkey Information Technology Report Q2 2011


Turkey Information Technology Report Q2 2011

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Additional Information
Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Apr 15, 2011
Quick Overview
Market Overview The size of the strategically located Turkish IT market is forecast to increase from US$7.1bn in 2011 to US$11.3bn by 2015, making it one of the fastest growing in emerging Europe. A quicker than anticipated emergence from recession in 2010 left Turkey’s IT market in a favourable position to continue to be a regional outperformer during BMI’s five-year forecast period.
Turkish IT spending is expected to strengthen throughout 2011, buoyed by a recovery in industrial production and domestic lending growth. Many firms put investment in new technology on hold during the economic slowdown because of a deterioration in external demand and desktop sales remained in negative territory in 2010. However, by mid-2010 the the Central Bank of the Republic of Turkey (CBRT)’s confidence index for the retail sector had risen well above 100, signalling broad optimism. The Turkish IT market is projected to achieve a compound annual growth rate (CAGR) of 12% during 2011-2015. Turkey’s cultural and geographical position as a hub between Europe and the Middle East only accentuates the significance of the country’s large market size for IT vendors. In recent years, PC sales have received new momentum as the focus of demand shifts towards the Anatolia region and this is expected to continue as the rate of PC penetration rises.
Industry Developments The government has continued to implement its E_Gateway portal project, which is central to its target of using IT to create a citizen-centric government. In the second phase, health, justice, security and other applications were rolled out in 2010, the deadline for completing the project.
Healthcare should be a significant area of opportunity for IT vendors over the next few years as organisations seek efficiency improvements and better quality services. The Health Transformation Project, launched by the Ministry of Health, has driven an increase in outsourcing of hospital functions. Other government departments have continued to launch tenders, including a data warehouse for the Social Security Institute and an upgrade of the statistical system for the Ministry of Labour and Social Security. As with many other government IT projects, the statistics project was driven by an aim for compliance with EU standards, with the union providing 75% of the funding from its general budget. Competitive Landscape
The surge in Turkish PC sales has encouraged foreign and domestic computer firms to increase their local operations, with HP the latest vendor to announce that it would start producing PCs in Turkey. HP’s electronics manufacturing service (EMS) partner Foxconn started building desktops for HP at its new plant in Corlu, in the north-eastern province of Tekirdag, in January 2011.
Business software giant Oracle reported strong results for the Turkish market in the first half of its 2011 fiscal year. The company reported a number of success stories with local clients such as Turkcell, Aegon, Tekstilbank, Yapi Kredi Bankasi, Petrol Ofisi, Enka and Hisar Scholl Kemerkoy.
In 2009, Accenture announced that it was opening an Accenture Innovation Centre in Istanbul in partnership with Oracle. IBM has opened a Business Continuity and Resiliency Services facility in Izmir. The facility features advanced data centre and workplace recovery capabilities.
Hardware Turkey’s computer hardware sales are forecast at US$5.1bn in 2011 and are expected to reach around US$8.3bn in 2015. The PC market is forecast to achieved positive growth in 2011, with revenues then growing at a compound annual growth rate (CAGR) of 13% in 2011-2015. The notebook segment was the main growth driver in 2010, while desktops sales declined as companies remained cautious about IT spending.
The market fundamentals remain promising, with computer penetration low at about 10%. Until a few years ago, demand for computers was mainly confined to large cities such as Istanbul, Izmir and Ankara. Now, the fastest growth in sales is coming from Anatolia. Demand for laptops is expected to be the strongest growth area over our forecast period but desktops remain popular with businesses.
Software The software market in Turkey is projected at US$858mn in 2011 and is forecast to reach US$1.2bn in 2015, a CAGR of 9%. However, much will depend on the success in bringing down the use of illegal software, which at 65% is nearly twice the global average. The global economic crisis may have provided a boost to hosted software and outsourcing solutions, which have grown popularity among Turkish small and medium-sized enterprises (SMEs).
Migration to the Windows 7 operating system has the potential to impact positively on sales in 2011, although much will depend on consumer and business confidence. The economic crisis prompted some companies to review IT budgets or to defer systems updates, but others saw IT as a means of achieving greater efficiencies in difficult times.
IT Services Turkish spending on all categories of IT services is projected at US$1.2bn in 2011, with double-digit growth as business confidence recovers following the economic contraction in 2009. An increased business focus on internal savings as a result of the economic situation could ultimately drive higher spending on external IT suppliers such as systems integrators and managed services providers. The Turkish IT services market is expected to grow at a 11% CAGR over 2011-2015. While support remains the largest services category other groups, including outsourcing on non-core functions and training services, are growing particularly fast. A pick-up in large projects in key verticals such as telecoms, manufacturing and finance should provide new corporate sector opportunities in outsourcing, systems integration and application customisation.
E-Readiness Data indicate that Turkey’s e-commerce transactions level doubled in 2007 to 54.1mn transactions, up from 21.7mn the previous year.
Although other operators in Turkey are providing ADSL services, they are reliant on the incumbent Türk Telekom’s wholesale ADSL product. Wholesale connections are included in its reported total. The Telecommunications Authority is keen to foster the growth of alternative broadband operators by allowing them to co-locate on Türk Telekom’s network, in addition to reselling Türk Telekom’s wholesale ADSL product. Competing against Türk Telekom remains difficult given that it owns the bulk of Turkey’s fixed-line network infrastructure and is determined to compete aggressively on price.
In 2007, the OECD called for more initiatives to increase public use of ICT, with research from Eurostat showing that Turkey is among the countries in which internet access is very low. The research found that only 39% of Turks had computers at home and that Turkey was below the EU average in terms of computers per household and internet access.
Turkey lags behind its EU neighbours on many indicators but not e-government, where much progress has been made. In 2005, Information Society Department, responsible for the overall coordination of ICT projects, was established within the State Planning Organisation. To increase participation and the level of success, an advisory board with 41 members has also been established. This consulting body gathers representatives from public institutions, non-governmental organisations and universities.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 8
Turkey IT Sector SWOT ........................................................................................................................................................................................ 8
Turkey Telecoms Industry SWOT .......................................................................................................................................................................... 9
Turkey Political SWOT ....................................................................................................................................................................................... 10
Turkey Economic SWOT ..................................................................................................................................................................................... 10
Turkey Business Environment SWOT .................................................................................................................................................................. 11
IT Business Environment Ratings ................................................................................................................ 12
Europe ................................................................................................................................................................................................................ 12
Table: Regional IT Business Environment Ratings ............................................................................................................................................. 15
Europe IT Markets Overview ......................................................................................................................... 16
Turkey Market Overview ............................................................................................................................... 22
Government Authority ......................................................................................................................................................................................... 22
EU Authority ....................................................................................................................................................................................................... 22
Background ......................................................................................................................................................................................................... 23
Hardware ............................................................................................................................................................................................................ 24
Software .............................................................................................................................................................................................................. 26
Services ............................................................................................................................................................................................................... 27
Industry Developments ....................................................................................................................................................................................... 29
E-Government ..................................................................................................................................................................................................... 29
Industry Forecast Scenario ........................................................................................................................... 32
Table: Turkish IT Sector, 2007-2015 (US$mn Unless Otherwise Stated) ............................................................................................................ 35
Country Context .................................................................................................................................................................................................. 36
Table: Rural/Urban Breakdown, 2005-2030f ..................................................................................................................................................... 36
Table: Consumer Expenditure, 2000-2012 (US$) ............................................................................................................................................... 37
Internet ............................................................................................................................................................................................................... 38
Table: Internet Sector, 2008-2015 ...................................................................................................................................................................... 38
Macroeconomic Forecast ................................................................................................................................................................................... 40
Table: Turkey – Economic Activity ..................................................................................................................................................................... 42
Competitive Landscape ................................................................................................................................ 43
Hardware ............................................................................................................................................................................................................ 43
Software And Services ........................................................................................................................................................................................ 44
Internet Competitive Landscape ......................................................................................................................................................................... 47
Company Profiles .......................................................................................................................................... 48
IBM Turkey ......................................................................................................................................................................................................... 48
Oracle Turkey ..................................................................................................................................................................................................... 49
Meteksan IT Group ............................................................................................................................................................................................. 50
Koç Sistem .......................................................................................................................................................................................................... 51
Country Snapshot: Turkey Demographic Data ........................................................................................... 52
Section 1: Population .......................................................................................................................................................................................... 52
Table: Demographic Indicators, 2005-2030 ....................................................................................................................................................... 52
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 53
Section 2: Education And Healthcare ................................................................................................................................................................. 53
Table: Education, 2002-2005 ............................................................................................................................................................................. 53
Table: Vital Statistics, 2005-2030 ....................................................................................................................................................................... 53
Section 3: Labour Market And Spending Power ................................................................................................................................................. 54
Table: Employment Indicators, 2001-2006 ......................................................................................................................................................... 54
Table: Consumer Expenditure, 2000-2012 (US$) ............................................................................................................................................... 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




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