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German ICT Market - Opportunities and Challenges

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Information about German ICT Market - Opportunities and Challenges
Business & Mgmt

Published on March 6, 2014

Author: JuergenKappenmann

Source: slideshare.net

Description

Presentation on current status of the German ICT market. The slides provide data and statistics on trends and opportunities for domestic and foreign companies interested in doing business there.
Second part deals with possible strategies to enter the German market and what challenges are to be expected.
The slides are part of a lecture held at a technology and entrepreneurship conference in Belgrade, Serbia.
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2nd ICT Net Conference “Technology and Entrepreneurship” Overview of International Markets Challenges and Opportunities in German, French and Dutch markets: The German IT Market Jürgen Kappenmann, Consultant Esslingen, Belgrade Falkensteiner Hotel, Beograd, 30th Oct., 2013 1

INTRO Opportunities and Challenges in the German IT Market Creating Opportunities and Tackling Challenges in the German IT Market Opportunities The German IT Market: Challenges and Opportunities Challenges 2 Strategy

GERMAN IT MARKET KEY FIGURES  ICT Market Volume  € 151,9 billion turnover in 2012 Source: BITKOM The German IT Market: Challenges and Opportunities 3

GERMAN IT MARKET KEY FIGURES  ICT Market Segments: IT, Telecommunication, CE Source: BITKOM The German IT Market: Challenges and Opportunities 4

GERMAN IT MARKET KEY FIGURES  ICT Market Segments Source: BITKOM The German IT Market: Challenges and Opportunities 5

GERMAN IT MARKET KEY FIGURES  Market Growth by Segments Source: BITKOM The German IT Market: Challenges and Opportunities 6

GERMAN IT MARKET KEY FIGURES  Employment  Overall 2012: 902.000 employees  Overall 2013: 917.000 employees (expected)  IT: 698.000 employees (76% of all ICT, plus 19.000)  Telecom: 206.000 employees  Consumer Electronics: 13.000 employees  Lack of IT Experts  2012: 43.000  2013: 39.000 (doubled since 2009)  16.000 in core ICT industry (13.800 in SW and IT services)  23.000 in other industries Source: BITKOM The German IT Market: Challenges and Opportunities 7

OPPORTUNITIES TRENDS Opportunities The German IT Market: Challenges and Opportunities Challenges 8 Strategy

OPPORTUNITIES TRENDS  High-Tech Strategy for Germany 2020  Objectives  CO2-neutral, energy-efficient and climate-adapted cities  Renewable biomaterials as an alternative to oil  Intelligent restructuring of energy supply  Treating diseases more effectively with personalized medicine  Better health through targeted prevention and an optimised diet  Living an independent life well into old age  Sustainable mobility  Web-based services for businesses  Industry 4.0  Secure identities The German IT Market: Challenges and Opportunities 9

OPPORTUNITIES TRENDS  High-Tech Strategy for Germany 2020  Fields of Action      Climate and Energy Health and Nutrition Mobility Security Communication  Key Technologies       ICT Services Micro System Technologies Automotive and Traffic Production Technologies … The German IT Market: Challenges and Opportunities 10

OPPORTUNITIES TREND: INDUSTRY 4.0  Core Idea The German IT Market: Challenges and Opportunities 11

OPPORTUNITIES TREND: INDUSTRY 4.0  Core Concept  Future Project of the High-Tech Strategy 2020 which promotes the computerization of traditional industries such as manufacturing (goal: Smart Factory)  Technology basis: cyber-physical systems and Internet of Things Combination of computational and software components with mechanical and electronic parts (embedded systems) which communicate via a wired or wireless data infrastructure (e.g. internet)  Applications  Medical devices, age-based assistance systems, IT traffic steering and logistic systems, inter-linked security and drive assistance for cars, industrial process steering and automation, infrastructure systems for communication The German IT Market: Challenges and Opportunities 12

OPPORTUNITIES TREND: SMART GRIDS & METERING  Core Concept  Study of German Federal Ministry of Economics & Technology  Oct. 2013: German smart metering concept successfully passes EU notification process  Objectives  By 2020 30% of power needs covered by renewable energy  Switch from „consumption-oriented generation“ to „generation-optimized consumption“  By 2022 two-thirds of all German households use smart meters  12 million households use smart meters with access to smart grids (Smart Meter Gateways)  Applications  energy supply management systems, smart houses The German IT Market: Challenges and Opportunities 13

OPPORTUNITIES TRENDS  Cross-Innovation       Cloud Computing Smart Cities Electro Mobility Connected Car Smart Grids Energy Efficiency The German IT Market: Challenges and Opportunities 14

OPPORTUNITIES TRENDS  Open Source  IT Security  New dynamic: NSA scandal  Topics: data protection, industrial espionage, mobile security, e-payment  eBusiness, eCommerce  eGovernment The German IT Market: Challenges and Opportunities 15

OPPORTUNITIES TREND: MOBILE  Less PCs and Desktops, More Tablets  Tablets: (48% growth in 2013) Turnover billion EUR Turnover billion EUR Source: BITKOM The German IT Market: Challenges and Opportunities 16

OPPORTUNITIES TREND: MOBILE  Booming Smart Phone Market Turnover billion EUR Sales in million Source: BITKOM The German IT Market: Challenges and Opportunities 17

OPPORTUNITIES TREND: MOBILE  Mobile Phones as Permanent Companions  2011: 62%  2013: 75%, i.e. almost 50 Mio. Germans  14% of all Germans consider using Mobile Wallets  Continuing growth in mobile data services market (€ 9,1 billion, +5%) Source: BITKOM The German IT Market: Challenges and Opportunities 18

OPPORTUNITIES TREND: WEB  Companies with Websites (min. 10 employees): 82%  Companies with < 10 employees: 45% The German IT Market: Challenges and Opportunities 19

OPPORTUNITIES OUTSOURCING TRENDS  Covered Fields  Web, Entreprise 2.0, Mobile Development, Embedded, SaaS/Cloud  Results & Trends        Higher acceptance with SMEs Reasons: reduce costs, focus on core competencies, access to resources outside Germany, speed up time-to-market Critical: poor communication with vendor´s team, CM, cultural difference, PM Prefered: nearshore, small providers via fixed-price/time-and-material models, short and focused contracts Outsourcing processes are increasingly globalized Focus on long-term added value More business process outsourcing (BPO)  Serbia as a outsourcing location  see Challenges section Source: Europ. IT Outsourcing Intelligence Report 2011: Germany The German IT Market: Challenges and Opportunities 20

OPPORTUNITIES OUTSOURCING TRENDS  Outsourcing Industries Source: Europ. IT Outsourcing Intelligence Report 2011: Germany The German IT Market: Challenges and Opportunities 21

OPPORTUNITIES OUTSOURCING PROCESS SW or System Development Local (National) Sub-Supplier Development Steps International Sub-Supplier Guided Cooperation Responsible Demand: - Vertical & horizontal market knowledge - technical know-how Supply: - (Basic) vertical & horizontal market knowledge - technical know-how - project/quality management skills Starting point: SW testing Deepened Industry/technology know-how building - Development of • project management, • quality management and • process & maturity model skills Source: policultancy.eu The German IT Market: Challenges and Opportunities 22

CHALLENGES STATUS QUO Opportunities The German IT Market: Challenges and Opportunities Challenges 23 Strategy

CHALLENGES ITBD ROAD SHOW Berlin Hessen / RPF Bavaria BadenWürttemberg The German IT Market: Challenges and Opportunities 24

CHALLENGES ITBD ROAD SHOW FINDINGS German stakeholders strongly interested in the Serbian market but have limited / no experience and knowledge Currently order books are full but… pressure and need to internationalize From a German perspective the Serbian market is interesting but limited in size Market knowledge and intelligence on both sides is low need for development of joint B2B models, events, joint platforms etc. demand and supply mappings to be developed, usage of “ICT at a Glance” Entrance to German market is often connected to confidence-building measures like success stories with German clients, language skills, involvement of German experts ... The German IT Market: Challenges and Opportunities 25

CHALLENGES STATUS QUO  Key Features  Visibility of Serbian IT industry  Hardly known as an IT location, no rep offices in Germany  Publication ICT at a Glance only comprehensive market study  Limited (industry-specific) experience & language  Expectations  SW development like in Germany but with less costs  Quality Management  Process of cooperation key to success  Trust building  It always depends on single company: no specific legal, tax etc. barriers The German IT Market: Challenges and Opportunities 26

OPPORTUNITIES TRENDS Opportunities The German IT Market: Challenges and Opportunities Challenges 27 Strategy

STRATEGY KEY ELEMENTS  Define your Strategy: Do it properly  Key Elements for Success  Focus  Specialization  Quality & Cooperation  Contracting  Market Screening  Presentation  Profile, references, methodologies… The German IT Market: Challenges and Opportunities 28

STRATEGY FOCUS The German IT Market: Challenges and Opportunities 29

STRATEGY FOCUS: CLUSTERS & ASSOCIATIONS  Cluster Platforms & Regional Clusters          Bavarian ICT Cluster Bwcon Cyberforum Karlsruhe ICT & Digital Business Association Berlin – Brandenburg (SIBB) ICT NRW IT-Mitteldeutschland Software-Cluster „Rhein-Main-Cluster“ Softwarezentrum Böblingen/Sindelfingen Open Source Cluster Berlin The German IT Market: Challenges and Opportunities 30

STRATEGY MARKET SCREENING - Gaming - Open Source - Media -… - eGovernment - Creative Industries - Open Source - Media -… - Business SW & Applications - ERP - Cloud -… - Energy Efficiciency - Solar Energy - IT HW -… Southwest: - Automotive - Embedded - eHealth - Creative Industries - Smart Energy - Smart Grids - Open Source -… The German IT Market: Challenges and Opportunities - Medical - eHealth - Automotive - BioTech -… 31

STRATEGY MARKET SCREENING  Core ICT Industry – Which IT Companies Are Hiring:        75% SW Development 24% IT Consulting 23% Marketing and Sales 20% System Administrators & Application Support 8% Project Management 7% IT Security Experts IT SMEs (1-50 million tunrover)  2012: 14.500 (80% out of 18.000)  94% search for SW developers  50% of companies confirm lack of IT experts, same # expect no change in near future Source: BITKOM The German IT Market: Challenges and Opportunities 32

STRATEGY MARKET SCREENING  For Which Fields Are IT Companies Searching Source: BITKOM The German IT Market: Challenges and Opportunities 33

STRATEGY MARKET SCREENING  Demand for IT Experts by IT Companies Source: BITKOM The German IT Market: Challenges and Opportunities 34

STRATEGY MARKET SCREENING  Demand for IT Experts by Non-IT Companies Source: BITKOM The German IT Market: Challenges and Opportunities 35

STRATEGY MARKET SCREENING  Labour Costs  General  ICT industry full-time employment: € 59.000 (gross)  Positions  SW developer: € 5.000/month (average wage)  SW developer start (gross): € 31.000-44.000/y. (av. € 40.300)  SW developer experienced (gross): € 39.000-56.800/y. (av. € 52.000)  Computer scientist start: € 45.000/y. (gross)  Geographic  Hessen/BW/BAY/HAM: high  Eastern States: low The German IT Market: Challenges and Opportunities 36

STRATEGY MARKET SCREENING  German Investments in Serbia (2010/11) Comapny Industry Investment in Mio. € Bosch Clean-Tech Automotive Supplies Pharmaceuticals 71,0 1,0 Continental Automotive 8,0 Dräxlmaier-2 Automotive 10,0 Dunkermotoren Electronics 1,0 Eko-Theman Group Food (Processing) 2,5 Fresenius Medical Care Medical 24,0 Grammer System Automotive Supplies 5,2 Gruner Electronics/Electrics 4,0 IGB Bauerhin Automotive Supplies 4,0 Leoni Automotive Supplies 7,4 Meggle Food (Processing) 4,0 Metro Retail 21,0 Mühlbauer IT 4,0 Norma Group Manufacturing 11,2 Siemens Electrics 20,0 Vossloh-Schwabe Panasonik Electrics 2,0 Source: AHK BG The German IT Market: Challenges and Opportunities 37

STRATEGY BROKERAGE  EU-Wide  KET Brokerage: http://www.b2match.eu/kets2014/pages/home  IT Fairs  CeBIT, Embedded World…  see event calendar on cluster and association websites  Clusters & Associations  For specific events see cluster websites  EEN  Business Cooperation Database  Brokerage  … The German IT Market: Challenges and Opportunities 38

Pitanja & Hvala na pažnji Jürgen Kappenmann, Ass. iur., M.A. Consultant Esslingen, Belgrade +381-69-197 47 30 juergen.kappenmann@karer.com Skype: juergen.kappenmann The German IT Market: Challenges and Opportunities 39

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