Boston, MA -- (SBWIRE) -- 02/15/2013 -- Market Overview

BMI View: French IT spending is expected to reach US$49.3bn in 2013, up 5%, with BMI downwardly revising our forecast due to our expectation that further fiscal consolidation will constrain public sector demand. In 2012, French IT services vendors reported continued opportunities in the French market, with the most robust sector being IT services, where virtualisation and cloud computing offer opportunities. Newly elected President Francois Hollande's faces a struggle to return France to economic growth and much will depend on a resolution to the eurozone crisis. Longer-term demand drivers include increasing operational efficiency, coordinating global supply chain and modernising logistics and warehouse functions.

Headline Expenditure Projections

Computer Hardware Sales: US$10.4bn in 2012 to US$10.9bn in 2013, +1% in US dollar terms. Growth forecast in US dollar terms downwardly revised due to macroeconomic factors and analyst modification.

Software Sales: US$14.1bn in 2012 to US$14.8bn in 2013, +5% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification, but faster growth is expected in hosted software services.

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IT Services Sales: US$22.6bn in 2012 to US$23.7bn in 2013, +5% 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 74.9 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 2013 the French computer hardware market is expected to report slightly higher single-digit growth, following the marked deceleration in 2012. Migrations to Microsoft's Windows 8 operating system could provide a boost, with a wave of releases of new generation devices. As the French economy faces budgetary pressures in 2013, enterprises will remain cautious about capital spending, but there could be a boost from computer hardware tenders previously delayed by the economic situation. A new wave of Windows 8 devices, and lower-cost ultrabooks, could help stimulate new cycles of hardware upgrades, even if the exact dimensions of the boost are unclear.
- The French government's National Investment Programme should provide a boost to the market. In 2012 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$7bn.

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