Croatia Information Technology Report 2012
Overview
Croatian IT spending is estimated by BMI at around US$1.1bn in 2012, up from US$1.0bn in 2011, when the IT market was expected to record modest single-digit growth. BMI expects a market CAGR of 6% for 2012-2016.
Croatia's IT market is expected to report growth of 6% in 2012. IT spending remained constrained in H111 due to the financial crisis but an improvement was expected in the seCond half of the year.
Government spending on ICT will continue in areas such as healthcare, e-taxation and the justice system, supported by EU programmes, as the country undergoes EU accession.
The short-term economic outlook remains difficult, but BMI expects IT spending per capita to expand from US$242 in 2012 to US$311 in 2016, thanks to modernisation and continued convergence with the EU. With the state still owning a wide range of companies across sectors such as transport, telecoms, oil and gas, media and insurance, the prospects for more rapid IT market growth are directly correlated to the success of economic reform.
Industry Developments
In 2011, Croatia had completed technical EU accession talks and anticipated signing a formal accession treaty before the end of the year. Despite severe fiscal pressures, the Croatian government has continued to invest in IT as part of its drive to improve the competitiveness of Croatia's economy and to narrow the gap with EU countries.
Recent EU-funded or part-funded informatisation projects have been in areas ranging from ports to courts. Projects rolled out despite the economic situation included a major healthcare IT system upgrade, as well as new VAT payment and prosecutorial case-tracking systems. The Croatian government's HRK55mn upgrade of the national primary care IT system was scheduled to be completed by the end of 2010.
Another key area for modernisation is e-government, where the National Office for e-Croatia is coordinating government efforts with technical support and financial assistance from the EU. Among other modernising government agencies, the Tax Administration of the Finance Ministry modernised its VAT system with assistance from EU funds. The project was the second completed in this area.
Competitive Landscape
HP ranked as the leading PC vendor in the Croatian market in 2010, with a market share of around onethird. HP was dominant in both the notebook and the desktop segments of the PC market. HP has said that Croatia accounts for less than 0.2% of its global sales. Local rival M San Grupa posted a 6% increase in notebook volume sales in 2010 but forecast that overall PC market sales would be flat or even report a single-digit decline in 2011.
In 2011, SAP maintained its leadership position in the Croatian business software market ahead of challengers such Microsoft, IN2, Laus CC and Oracle. European ERP specialist SAP has been in Croatia since 1995 and currently has more than 50 local clients including oil and gas manufacturer INA, drug manufacturer Pliva and food company Podravka.
The Croatian IT services market remains diffused, with the top 10 companies accounting for about 60% of sector revenues and global vendors taking less than half. Leading players such as Siemens SIS and King ICT are thought to have single-digit market shares. IBM has enjoyed success in the public sector, with wins from the Finance Ministry and the Office of the Chief State Prosecutor.
Computer Sales
BMI forecasts that Croatia's PC market (including notebooks and accessories) will be worth US$460mn in 2012, with modest single-digit growth compared with 2011. In 2011 growth was expected to return to positive annualised growth territory but the weak economy continued to affect demand after the market contracted sharply in 2009.
Croatia is a more mature market than its neighbour Serbia, and the largest market in the Adriatic region. With household PC penetration at around 65%, Croatia still retains considerable untapped potential.
Software
The Croatian software market is forecast by BMI at US$184mn in 2012 and is expected to grow at a CAGR of 7.7% over the 2012-2016 forecast period. Software spending is expected to grow again in 2012, after the economic slowdown continued to create challenging trading conditions for vendors in 2011.
The domestic software market is still expected to grow around 35% to US$248mn by 2016, driven in part by government and EU-subsidised IT projects. Sales were expected to return to modest singledigit growth in 2011, with faster growth in 2012. The most important verticals include manufacturing and wholesale, with basic modules such as supply chain management remaining the most popular.
Services
Croatia's IT services market is projected at US$325mn in 2012 according to BMI estimates and is expected to be the fastest growing IT market segment over the forecast period. Telecoms, banking and government together account for as much as 60% of Croatian IT spending. However, financial IT spending was reported by vendors as flat overall in 2011.
IT services account for less than 30% of all IT spending in Croatia's hardware-dominated market presently and the market is relatively undeveloped. However, there are a number of potential drivers including privatisation and modernisation in many industry sectors, new competitive pressures that prompt companies to look for efficiencies and EU support for reform.
E-Readiness
Croatian government statistics reveal a disparity in the level of e-readiness in household and business sectors.
Croatian IT spending is estimated by BMI at around US$1.1bn in 2012, up from US$1.0bn in 2011, when the IT market was expected to record modest single-digit growth. BMI expects a market CAGR of 6% for 2012-2016.
Croatia's IT market is expected to report growth of 6% in 2012. IT spending remained constrained in H111 due to the financial crisis but an improvement was expected in the seCond half of the year.
Government spending on ICT will continue in areas such as healthcare, e-taxation and the justice system, supported by EU programmes, as the country undergoes EU accession.
The short-term economic outlook remains difficult, but BMI expects IT spending per capita to expand from US$242 in 2012 to US$311 in 2016, thanks to modernisation and continued convergence with the EU. With the state still owning a wide range of companies across sectors such as transport, telecoms, oil and gas, media and insurance, the prospects for more rapid IT market growth are directly correlated to the success of economic reform.
Industry Developments
In 2011, Croatia had completed technical EU accession talks and anticipated signing a formal accession treaty before the end of the year. Despite severe fiscal pressures, the Croatian government has continued to invest in IT as part of its drive to improve the competitiveness of Croatia's economy and to narrow the gap with EU countries.
Recent EU-funded or part-funded informatisation projects have been in areas ranging from ports to courts. Projects rolled out despite the economic situation included a major healthcare IT system upgrade, as well as new VAT payment and prosecutorial case-tracking systems. The Croatian government's HRK55mn upgrade of the national primary care IT system was scheduled to be completed by the end of 2010.
Another key area for modernisation is e-government, where the National Office for e-Croatia is coordinating government efforts with technical support and financial assistance from the EU. Among other modernising government agencies, the Tax Administration of the Finance Ministry modernised its VAT system with assistance from EU funds. The project was the second completed in this area.
Competitive Landscape
HP ranked as the leading PC vendor in the Croatian market in 2010, with a market share of around onethird. HP was dominant in both the notebook and the desktop segments of the PC market. HP has said that Croatia accounts for less than 0.2% of its global sales. Local rival M San Grupa posted a 6% increase in notebook volume sales in 2010 but forecast that overall PC market sales would be flat or even report a single-digit decline in 2011.
In 2011, SAP maintained its leadership position in the Croatian business software market ahead of challengers such Microsoft, IN2, Laus CC and Oracle. European ERP specialist SAP has been in Croatia since 1995 and currently has more than 50 local clients including oil and gas manufacturer INA, drug manufacturer Pliva and food company Podravka.
The Croatian IT services market remains diffused, with the top 10 companies accounting for about 60% of sector revenues and global vendors taking less than half. Leading players such as Siemens SIS and King ICT are thought to have single-digit market shares. IBM has enjoyed success in the public sector, with wins from the Finance Ministry and the Office of the Chief State Prosecutor.
Computer Sales
BMI forecasts that Croatia's PC market (including notebooks and accessories) will be worth US$460mn in 2012, with modest single-digit growth compared with 2011. In 2011 growth was expected to return to positive annualised growth territory but the weak economy continued to affect demand after the market contracted sharply in 2009.
Croatia is a more mature market than its neighbour Serbia, and the largest market in the Adriatic region. With household PC penetration at around 65%, Croatia still retains considerable untapped potential.
Software
The Croatian software market is forecast by BMI at US$184mn in 2012 and is expected to grow at a CAGR of 7.7% over the 2012-2016 forecast period. Software spending is expected to grow again in 2012, after the economic slowdown continued to create challenging trading conditions for vendors in 2011.
The domestic software market is still expected to grow around 35% to US$248mn by 2016, driven in part by government and EU-subsidised IT projects. Sales were expected to return to modest singledigit growth in 2011, with faster growth in 2012. The most important verticals include manufacturing and wholesale, with basic modules such as supply chain management remaining the most popular.
Services
Croatia's IT services market is projected at US$325mn in 2012 according to BMI estimates and is expected to be the fastest growing IT market segment over the forecast period. Telecoms, banking and government together account for as much as 60% of Croatian IT spending. However, financial IT spending was reported by vendors as flat overall in 2011.
IT services account for less than 30% of all IT spending in Croatia's hardware-dominated market presently and the market is relatively undeveloped. However, there are a number of potential drivers including privatisation and modernisation in many industry sectors, new competitive pressures that prompt companies to look for efficiencies and EU support for reform.
E-Readiness
Croatian government statistics reveal a disparity in the level of e-readiness in household and business sectors.
Contents
Executive SummaryCompetitive Landscape
Computer Sales
Software
Services
Table: Croatian IT Use
SWOT Analysis
Croatian IT Sector SWOT
Croatian Telecoms Industry SWOT
Croatian Political SWOT
Croatian Economic SWOT
Croatian Business Environment SWOT
IT Business Environment Ratings
Table: Regional IT Business Environment Ratings
Europe IT Markets Overview
Market Overview
Hardware
Software
Services
End-User Analysis
Industry Developments
Industry Forecast Scenario
Table: Croatia's IT Industry - Historical Data & Forecasts (US$mn Unless Otherwise Stated)
Internet
Table: Telecoms Sector – Internet – Historical Data & Forecasts,2009-2016
Macroeconomic Forecast
Table: Croatia – GDP By Expenditure
Competitive Landscape
Hardware
Software
IT Services
Company Profiles
Microsoft Croatia
Oracle
M San Group (M San Grupa)
HG Spot
Combis
Country Snapshot: Croatia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2010 (US$)
Table: Average Annual Wages, 2000-2010
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
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