The Swedish IT market is the largest in the Nordic region and despite economic headwinds it is projected to grow at a compound annual growth rate (CAGR) of 5% over 2011-2015. The addressable domestic market for IT products and services is forecast by BMI to reach US$16.0bn in 2011 and US$19.7bn by 2015.
The IT market should achieve solid growth in 2011, as the market stabilises after the economic crisis. In early 2011, vendors reported improved demand for outsourcing and project services. Swedish IT spending is projected to increase in 2011 with a boost from computer for schools purchases, a new national digital agenda and growing interest in cloud computing.
Industry Developments
In early 2011, the government was consulting on the development of the Swedish Digital Agenda. The new agenda, like the consultations, is expected to be broad and cover areas ranging from the use of IT in healthcare to widening digital participation and using IT to generate jobs.
Swedish computer purchases are expected to grow to about 550,000 units by 2012, according to vendors' projections. The increased rate of procurement is being driven by a transition towards the provision of a computer for every student in Swedish schools.
Competitive Landscape
In 2010, Swedish enterprise resource planning (ERP) market leader Jeeves reported an upturn in demand with 109 new customers for its Jeeves Universal platform. Jeeves also reported a rebound in large-sized contracts with a value of at least EUR100,000. Among recent wins in Jeeves' domestic market in March 2011 was a tender from Ingemar Johansson AB, one of Sweden's largest privately owned producers of processed meat.
IT services vendors also announced better results in 2010. Capgemini's Sogeti Sweden subsidiary reported strong growth of 19% in December. European IT services provider Logica noted a pick-up in its professional services business and revenues growth in Sweden in H210.
A key focus for vendors is demand to utilise cloud computing efficiencies. In 2010, a number of Swedish market players, including telecoms company TeliaSonera, rolled out cloud computing services for local business customers. Meanwhile, City Network, a Scandinavian provider of hosting services, launched a cloud computing service aimed at the European market.
Computer Sales
BMI forecasts Sweden's addressable computer hardware market to be worth US$3.4bn in 2011, up from US$3.3bn in 2010. Total PC revenues, including notebooks, desktops and accessories, are estimated at US$2.7bn and are expected to rise to US$3.4bn by 2015 at a CAGR of 6%.
In 2011, Swedish PC sales are expected to receive a boost from school computer purchases, while business sales should also grow, building on a stabilisation of the enterprise market in 2010 after global economic headwinds affected demand the previous year.
Software
In 2011, Sweden's market software sales are projected by BMI at US$5.1bn, and, despite the uncertain economic conditions, revenues are expected to rise to US$5.9bn in 2015. The software CAGR for 2011- 2015 should be in the region of 4%. Drivers of software spending by Swedish companies include increasing the efficiency of global supply chains and logistics functions.
Cloud computing services such as software-as-a-service (SaaS) are likely to be used more in Sweden over BMI's forecast period. Among the early adopters in the market is the hotel chain Scandic.
Services
Sweden's IT services spending is forecast to reach nearly US$7.5bn in 2011, up from US$7.2bn in 2010.
The economic crisis and political uncertainty had an impact in 2009, with projects put on hold, but demand stabilised in 2010. The sector's CAGR is projected at 5% over the forecast period as the market reaches US$9.5bn by 2015.
Demand for IT services such as systems integration (SI) and consulting made a moderate recovery in 2010 after the economic crisis meant reduced spending in some key IT services verticals that had previously driven IT spending. In 2011, there should more spending by sectors such as financial services, retail and telecoms.
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