Boston, MA -- (SBWIRE) -- 08/21/2012 -- Market Overview

BMI View: French IT spending is expected to reach US$44.8bn in 2012, up 1%, with BMI downwardly revising its forecast after the PC market reported a double-digit contraction in 2011. French spending on IT products and services is projected to report flat or negative growth in 2012, with virtualisation and cloud computing offering opportunities. Newly elected President Francois Hollande's focus on growth could stimulate additional public sector demand but much will depend on a resolution to the eurozone crisis. Longer-term demand drivers include increasing operational efficiency, coordinating global supply chains and modernising logistics and warehouse functions.

Headline Expenditure Projections

Computer hardware sales: US$8.5bn in 2011 to US$8.6bn in 2012, +1% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors and analyst modification following a sharp contraction in Q411.

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Software sales: US$13.4bn in 2011 to US$14.3bn in 2012, +6% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but faster growth is expected in hosted software services.

IT Services sales: US$20.7bn in 2011 to US$21.9bn in 2012, +6% in US dollar terms. Forecast in US dollar terms downwardly revised due to macroeconomic factors, with one potential demand driver being organisations looking for help to utilise efficiencies from cloud computing Risk/Reward Ratings: France's score was 74.2 out of 100.0. France ranks fourth in our latest Europe RRR table, behind the UK, Germany and Sweden, but ahead of CEE markets such as Poland, Russia and the Czech Republic.

Key Trends & Developments

- In 2012 the French computer hardware market is expected to record flat or low single-digit growth, following a sharp market deceleration in 2011.Besides the economic situation, the growing popularity of tablets and smartphones was another factor to impact on sales of traditional form factor such notebooks. Consumers who increasingly prize mobility were purchasing these alternative connectivity devices and postponing upgrades of their PCs
- The French government's National Investment Programme should provide a boost to the market. In 2011 the French market for cloud computing was estimated at around US$2bn, equivalent to around 5% of the total value of the IT services market. By 2016, it is forecast that the market opportunity could be worth around US$9bn.

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