At 2.8% growth in 2016, digital in France is progressing half as fast as in the United States

by bold-lichterman

With a growth of 2.8% observed this year in France, the revenues of digital companies slightly exceed the forecasts of experts, and show an increase greater than that observed in 2015, according to the results of the study “2016 Review and 2017 Outlook»Produced by Syntec Numérique in partnership with IDC.

The main driver of the digital sector, software publishers generated revenue growth of 3.5%. As a reminder, the software publishers sector is very concentrated, since the 7% of the most important players generate 70% of the turnover of the 250 main players in the sector, according to the top 250 French software publishers, also produced by the Syntec Numérique.

syntec-balance2016-2With these performances, France is aligned with the European average, but nevertheless remains less dynamic than the United States where digital revenues have grown by 5.3% (as in Asia-Pacific). France is also below the world level, with an average growth of 4.6%, says Syntec.

42% of companies believe their business is improving

First observation of the study, after a peak observed in the first quarter of the year, the proportion of companies which believe that their activity is improving decreases slightly in the third quarter, and reached 42%.

syntec-balance2016-4While the situation has been relatively stable for software publishers for several months (40% of them believe that their situation is improving), Digital Services Companies (ESN) have known better for several quarters. Technology consulting companies are also seeing their situation improve, but above all stabilize, after an alternation of contrasting quarters.

IT spending on the rise

When asked about the question, digital companies say their priorities lie in reducing their costs, as well as improving their business processes, by 70%. Just over 6 in 10 companies are also focusing on entering new markets.

More in detail, 64% of IT professionals have made it a priority to improve the security of their infrastructures, and 62% to improve service to users. Note that 58% of them plan to deploy a private cloud, up 12% compared to last year. Another observation is that 84% of CIOs expect their IT spending to increase this year, compared to 80% at the start of the year.

The role of business departments in digitization

If the technical aspect is the driving force in any digital transformation project, the business departments are also strongly involved in these projects. As proof, nearly a third of investments in digital projects are made by these business departments. Two-thirds of them expect to see the phenomenon worsen in 2017.

In terms of the distribution of roles between business professionals and technicians, if CIOs are primarily involved in the purely technical aspects of projects (software selection, maintenance), they also have a major role to play in the management of digital transformation. The business departments intervene more on the budgetary aspects of projects. It should be noted that in more than half of the cases, it is the IT professionals who initiate digital projects.

syntec-balance2016-3

To meet the need to transform, companies do not hesitate to turn to digital start-ups and SMEs. 62% of companies have in fact planned to enter into a technological partnership with start-ups, and 60% of them state that they have implemented a purchasing policy that favors SMEs in the sector.

In 2017, the digital sector should grow by 3%, still driven by the dynamism of software publishers, according to expert estimates. However, these growth forecasts should be taken with caution, as the consequences of events such as Brexit or the presidential elections in France on the performance of the sector are difficult to anticipate.

READ also: 7% of French software publishers capture 70% of the sector’s turnover

** Methodology: survey carried out by Syntec Numérique, in partnership with IDC, during the month of October 2016. 200 managers of SMEs / ETIs responded to the survey, as well as 50 managers of large companies, and 50 managers of DSI. Respondents represent 75% of the French market. The results are coupled with those of a survey carried out during the month of September, among 100 French managers (DSI, HRD, DAF, CEO, etc.).