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Slovenia Information Technology Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8433 Description Market OverviewSlovenian IT spending is projected to sharply decelerate in 2009, as consumers and businesses retrenchdue to tighter credit conditions and the unfavourable external economic environment. Some projects havebeen put on hold due to the economic uncertainty. The current economic crisis has led some companies toreview IT budgets or look to defer systems updates, but others see IT as a means of achieving greaterefficiencies in difficult times. The trading environment will remain challenging in H209. Tight credit conditions will continue to impacton credit available to households for IT purchases. Meanwhile, household saturation is also beingapproached, with PC penetration at around 71% of households according to a recent survey. Despite thesenegative trends, there will continue to be opportunities in various sectors, and BMI expects that retailsales will pick up again towards the end of the year. Slovenian IT spending is projected by BMI to advance from US$1.1bn in 2009 to nearly US$1.4bn in2013. Rising GDP/capita over the next few years should ensure continued growth, along with governmentand EU funded information and communication technology (ICT) initiatives. Slovenia became a memberof the eurozone on January 1 2007, and the direct and indirect effects of EU membership will continue todrive IT development. Industry Developments Across the public sector, tenders continued to be issued in 2009, despite the bad economy. Among recenttenders was one for sales, marketing and business intelligence software from Radiotelevizija Slovenia.Another was for software programming and consultancy services from the Ministry of Labour, Familyand Social Affairs. Health is one priority area. In 2009 the Health Insurance Institute of Slovenia announced that it would rollout a new electronic health insurance card system across the country. The new system will use anelectronic health insurance that will eventually be carried by every Slovenian citizen and presented at thepoint of healthcare delivery. In 2008 Slovenia implemented a number of IT projects, making use of both local and EU funds. Sloveniais determined to consolidate its status as one of the most advanced of the 2005 EU intake. EU funding forits Competitiveness and Innovations programme for the period 2007-2013 includes substantial sums tosupport ICT policies. There are also additional sums for entrepreneurship and innovation, which can haveIT applications. Competitive Landscape IBM won a major local contract in 2009 when the Health Insurance Institute of Slovenia announced thatit would roll out a new nationwide electronic health insurance card system based on IBM technology. IBM will provide hardware, software and services for the project, which was commissioned following thesuccessful completion of a pilot project. Overall, international brands appear to have consolidated their position in the PC market, with HP theleading brand overall, followed by Dell, Lenovo, and Fujitsu-Siemens. HP leads in the server segment,followed by IBM. 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 computers (including notebooks and accessories) are projected at US$473mn in 2009,down from US$486mn in 2008. Growth is now expected to dip into negative growth territory this yeardue to a weak private consumption outlook, tighter credit conditions and the impact of the recession onSlovenian businesses. In Q109, the market achieved single-digit shipments growth, in contrast to the sharp declines in regionalneighbours such as Serbia and Croatia. However, there was downward pressure on prices because of theeconomic downturn and the popularity of lower priced notebooks and netbooks, which drove volumesales. BMI expects that spending in the run-up to the Christmas period will help to drive sales higher inQ409. Software The software market in Slovenia is projected at US$222mn in 2009, with a marked decelerationcompared with 2008. The current economic crisis has led some companies to review IT budgets or look todefer systems updates, but others see IT as a means of achieving greater efficiencies in difficult times.Business software vendors will look to pitch efficiency gains, as margins pressure encourages companiesto focus on reducing costs. Slovenia is a relatively mature software market for the region and the relative saturation (79%) of thelarge-enterprise market in terms of basic enterprise resource planning (ERP) applications shouldencourage vendors to look to other products to maintain growth, or else to focus more on verticalspecialisms. Although large and very large enterprises still constitute around half of the spending onenterprise application solutions (EAS) in Slovenia, more than 64% of new installations are reported tocome from small and medium-sized businesses. IT Services The Slovenian IT services market is projected to grow to around US$306mn in 2009, with only lowsingle-digit growth compared with the previous year. However, the market is expected to revive, anda 7% 2009-2013 compound annual growth rate (CAGR) is projected, with support and maintenanceaccounting for more than 25% of these revenues. In 2009, despite the economic downturn, IT services companies are expected to continue to benefit fromIT projects tendered across various sectors ranging from the public sector to banks, education, retailand financial institutions. In the long term, the IT services market is set to expand, however, as Slovenianorganisations upgrade IT systems to gain or maintain competitive advantage following EU accession. E-Readiness The Slovenian government statistics body (SORS) recently released new data about ICT adoption byenterprises. The statistics, from Q108, comprise a fascinating picture of the utilisation of ICT byenterprises of various sizes, and of attitudes towards IT spending. The overall picture suggests room for further market development, particularly among smaller andmedium companies, but also a need for continuing education by vendors. Internet access is now nearlyubiquitous, at 97% among companies with 10 employees or more, up 1% from the same period of theprevious year. Broadband access has 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% oflarge companies enable online ordering on their website, and only 5% enable online payment. Thecorresponding figures for small and medium companies are even lower. In the case of having an intranet, there is a clear gap between larger companies and smaller ones. 75% oflarger companies had an intranet, compared with just 40% of medium companies (50-250 employees) and26% of small companies. Intranet usage was highest in computer-related business and lowest in theconstruction and hotel sectors. In the financial sector, access to internet was 100%, as was e-government usage. 35% of enterprises in thefinancial sector believed that the implementation of ICT projects in the past year had significantlyimproved work routine and the development of new products and services, considerably higher than theaverage for all sectors. Table of Contents
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