Software and Services revenues drive IT market growth

Software and Services revenues drive IT market growth

• Top European Solution VARs grow at nearly 3 times the market average with combined turnover exceeding $22bn

European Resellers focusing on solution sales last year grew nearly 3 times faster than the market, achieving average growth rates of 11.81%. Overall the combined sales of Solution VARs (Value Added Resellers generating more than 50% of their revenues from solution sales) grew to $22.12 billion last year. These are amongst the findings of “Solution VARs in Europe –The Top 500”, the latest database report from IT Europa which is published today.

The report, which provides detailed business profiles of each of the top 500 European Solution VARs, also reveals that income from services represented on average 38% of total revenues, and that income from both consultancy services and project management exceeded traditional maintenance and repair revenues. Two German companies, Bechtle AG and AKCENT Computerpartner Deutschland AG, headed the European league-table, followed by SCC from the UK. New entrants into the top 20 included Affiniti, Torex Retail Plc, Becom Informationssysteme GmbH and Infor Global Soutions EMEA.

In terms of geography, Russia and Turkey had the most spectacular growth, averaging more than 50%. Of the larger markets, the UK, with an average growth rate of 15.4%, showed the strongest growth.

“These figures clearly demonstrate the value of focusing on the sales of solutions rather than products,” commented Alan Norman, Managing Director of IT Europa. “In addition to achieving higher growth rates, with a high proportion of their income coming from services and a further 24% from sales of their own software, these companies have decreased their dependence on sales of increasingly commoditised hardware and thus have greater control of their income and margins.”

Solution VARs are showing the way for the channel model of the future with 67% of their staff involved in support services, software development and solution delivery. They have evolved to support their customers in improving their business operations and procedures through using technology and software applications, rather than just being technology infrastructure providers.”

The Solution VARs in the report generate 54% of their income from the SME sector, (with 50 to 1000 employees) and 27% from the Enterprise sector (1000+). They also focus heavily on vertical market sectors with Retail, Finance and Automotive being the most popular.

Solution VARs in Europe – The Top 500 report, now in its eighth year, has been fully re-researched, spans 35 countries and represents the most detailed view of this key market sector. It has been compiled from detailed interviews by IT Europa’s own research team. The company profiles include sales breakdowns by company activity, which markets they operate in, and detailed information on staff numbers and development plans, along with contact details for the top executives of each company. The report is available from IT Europa at a cost of £1,495 for a single user licence and £5,980 for a multi-user licence.

About IT Europa
IT Europa is the leading provider of strategic business intelligence, news and analysis on the European IT marketplace and the primary channels that serve it. It publishes pan-European newsletters and database reports that provide accurate, authoritative, objective and up-to-date information and enable vendor and channel organisations to increase efficiency and gain competitive advantage.