UK retain strong presence on European software stage
The inaugural listing of Europe’s top 100 software companies as compiled by representatives of the European Software Association, AFDEL, BASDA and PricewaterhouseCoopers was launched on 2nd of December 2008 in Brussels.
- PwC rank top 100 UK and European software companies
- European market dominated by US and Japan
- Sage top UK rankings
With worldwide revenue of €13.3bn (2.5 per cent of the overall revenue generated by the entire top 100), these UK companies created significantly more wealth than their Western European counterparts. The German and French software companies that featured in the EuroSoftware100 generated €4.3bn and €1.2bn respectively.
In 2008, the European market represented approximately 30 per cent of the overall worldwide software market generating revenues of approximately €56bn.
Top Ten UK Software Companies | |||
Rank | Company | In millions British pounds – total revenue | Revenue |
1 | Sage | 881 | 179 |
2 | Misys | 307 | 17 |
3 | Logica | 271 | 45 |
4 | Symbian | 175 | 5 |
5 | Autonomy Group* | 145 | 10 |
6 | Reuters | 130 | 23 |
7 | AVEVA | 113 | 7 |
8 | iSoft ** | 112 | 60 |
9 | Fidessa*** | 105 | 35 |
10 | SDL | 105 | 10 |
** Acquired IBA Health in August 07
*** Including Latent Zero as of May 07
Home-grown talent
Sage topped the UK chart, with Misys and Logica in second and third place. Their combined revenue totals €1.5bn. However, due to the dominance of SAP the top three German companies created €8.9bn (£7.4bn) in 2008. SAP followed by Sage came out top of the home-grown European software companies.
Jass Sarai, head of Software and IT Services, PricewaterhouseCoopers LLP, said:
"Following significant UK presence in the Top 100, the UK’s strength lies in the number of smaller companies ranked in the top 200. In fact 33 UK businesses were ranked on this extended list, producing a total global revenue of €26bn - four per cent of the €617bn produced by top 200 companies in total."
Inbound dominance
The three top US software vendors listed (who are also ranked in the top three of the world) generate more than €55bn worldwide, the equivalent of the entire European software market. US software suppliers make up 75 per cent of companies in the top 20 listed and 30 per cent of the top 100.
"As expected the US software vendors feature highly in the ranking and have considerably strengthened their position in the European market mainly through acquisitions’" added Jass.
Japan are another dominant inbound force making the most of the European marketplace, with those Japanese companies listed in the EuroSoftware100 forming 32 per cent of the total worldwide revenue.
UK software managing in the downturn
Following forty years of IT growth, sales and marketing for these UK software companies has been easy. However as Western Europe enter the recession the industry needs to start selling more with less.
"Only one in five business-to-business deals ever get closed in the UK. This worrying statistic should spur the UK software industry on to cement their lower cost sales strategy in these difficult times and remain a force to be reckoned with in Europe," he said.
Further consolidation is also expected in the downturn as larger, opportunistic companies acquire smaller companies, add value to the product and service capability, and offer software as a service.
Jass commented: "Many players have already taken advantage of the opportunities for consolidation and this relative saturation could curb the ambitions of some of the American vendors. However, the smaller software companies are likely to still find themselves the target of a merger approach enabling them to gain ground in Europe and the potential to emerge as bigger players in the marketplace."
"These are challenging times for the UK software industry. Those companies who seize the opportunities provided by technological shifts, which innovate and remain agile, will emerge stronger as the market reshapes itself," he concluded.
Eilert Hanoa, Vice Chairman of the European Software Association and CEO of Mamut, said: "It is with great pride that we launch this listing together with the other partners involved. It is essential that we work together to recognise our joint challenges and opportunities, the size of the European software market, its growth and its impact on the European economy."
Patrick Bertrand, President of the AFDEL and CEO of Cegid comments: "With EuroSoftware100, the industry and observers now have the data they lacked to highlight the strengths and weaknesses of the software industry in Europe. While the listing underscores North American market domination, our industry is still as creative as ever and those dominant positions are not unassailable in such an innovative sector. Training and the shortage of qualified personnel for our businesses is one of the industry’s major challenges, which we expect the authorities to take into account. But we have top quality R&D, a mature financial environment and a new generation of serial entrepreneurs. We therefore believe firmly in our ability to generate European champions in the next ten years that will be capable of shaking up the worldwide top 20."
Jairo Rojas, Director General of BASDA, said:"We are delighted to be part of this launch. Results from the survey highlight some key issues for our members in such challenging times. Our combined members are wellplaced to adapt, innovate and create opportunities within the changing business software landscape. We are collectively engaging with EU government to ensure that the EU software industry survives and thrives – keeping employment, encouraging new start-ups and assisting growth."
EuroSoftware100 Listing
For a complete list of EuroSoftware100 contact andrea.alter@fr.pwc.com or anna.r.white@uk.pwc.com or download from www.eurosoftware100.com
Top European software vendors methodology (Pierre Audoin Consulting (PAC))
The following countries are covered in the analysis of the Top European software vendors: Austria, Belgium, Denmark, Finland, Netherlands, Norway, Spain, Sweden, Portugal, Switzerland, Germany, Italy, France, UK, Luxemburg, Greece, Ireland, Liechtenstein, Malta and Iceland.
"Software revenue" is defined as: license maintenance and support revenue (excluding consulting and integration services). For SaaS and Open Software vendors, subscription revenues are included within software revenue.
PAC has conducted analysis of the European software industry since 1992. Both central and country-level databases, which include the revenue breakdown of various players according to PAC’s segmentation, are updated all year long through:
- Surveys of more than 1,000 software suppliers and diverse companies with software activity in Europe
- When appropriate PAC has relied on estimates according to worldwide/European /country revenue
- Market analysis and benchmarks
PAC cannot be held responsible for potential errors or omissions.
About PricewaterhouseCoopers
PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms in the network, each of which is a separate and independent legal entity.
About the European Software Association
Created in October 2005, the European Software Association is the voice of the European Independent Software Vendor (ISV) community. ISV members of the association work with EU policy makers and other European stakeholders to foster an environment that supports innovation and competitiveness within the European software industry, and that supports the needs of other European business communities.
About AFDEL
Created in October 2005, AFDEL is the French association of Software editors. With 160 members, AFDEL aims to represent the whole industry from big firms to SME’s (80%). This industry is crucial for economic growth but is too often discarded by public decision makers in France. AFDEL wants to bridge the gap. It also supports SME’s in their competition by sharing knowledge and experience between members.
About BASDA
BASDA is the Business Application Software Developers’ Association, a member-driven not-for-profit organisation where members benefit by sharing knowledge and expertise and working effectively as one voice to address strategic issues and evolving legal, political and technical influences that affect the business software industry.