A lot is still to be done

The Polish IT market includes almost 5,000 companies that sold (on their own or in a symbiosis with foreign IT tycoons) goods and services worth approx. EUR 4 billion in 2003.

The Polish IT market includes almost 5,000 companies that sold (on their own or in a symbiosis with foreign IT tycoons) goods and services worth approx. EUR 4 billion in 2003.

Two sales representatives of a shoe manufacturer went to an African country once, independently of each other. The first one sends a desperate message to the headquarters: "Nobody wears shoes here! We won't be able to sell anything." The other one, unaware of his colleague's estimate, reports enthusiastically: "Huge market. Send the first batch immediately. Nobody has shoes here!"

Although the situation of Polish IT sector may not be quite the same, it is still under-invested in relation to Poland's vast economic and population potential. Poland is undoubtedly the largest market among the accession countries. However, it still lags behind other new EU Member States as far as the expenses on information technologies are concerned. Poland allocates only approx. 2% of its GDP to purchases of IT goods and services. It translates into a little bit more than EUR 100 per capita per annum. In the Czech Republic the expenses are twice as high, and in Germany - seven times as high! With an intention to catch up with the European leaders, Poland has to increase its expenses on IT, which is to be facilitated by our presence in the united Europe.

From boom to crisis

As in other post-communist countries, the dynamic implementation of IT solutions in Poland began in the early 90s. There was a great demand for IT on a technological desert. Organizations focused first of all on hardware purchases. Even today, hardware purchases create almost 50% of the market value, which is a regularity in most Central and Eastern European countries. In recent years the demand for services has been growing in line with the trends on the international market. Services take up 25% of revenue of the Polish IT sector (based on EITO data for 2003).

The robust development of the IT market was hampered by the economic downturn at the beginning of the 21st century. Although, as analysts show, the IT market was developing still faster that the rest of the Polish economy at that time (the IT market value increased by 7% in 2002), the sector was affected by the general crisis. Due to bankruptcy and consolidation processes enforced by an unfavorable economic situation, a few large and well-known Polish IT brands disappeared.

The latest positive macroeconomic data indicate an upturn in Polish economy and make entrepreneurs look into the future with more optimism. The GDP growth estimated at 5% for the end of 2004 and surprisingly good news about growing industrial output and international trade balance herald an economic upturn. Quite moderate forecasts of the European Information Technology Observatory estimate that the value of the Polish IT market will amount to EUR 5 billion in 2005.

According to analysts, the main drivers include fast economic growth, increasing exports and IT projects in the government.

When analyzing the Polish IT market, one should consider the fact that two or three large contracts may greatly affect the sector's results in a given year. The growth rate of the IT market, which is still relatively small, is frequently set by the results of few key tender procedures. The value of the largest contracts in the financial industry (e.g. IT projects in the PZU insurance group or PKO BP, the largest retail bank), and government contracts (e.g. the construction of the Central Register of Vehicles and Drivers, CEPiK ) reaches a few hundred million EUR.

Nearer California than Berlin

There are very few renowned IT companies that have not yet commenced their operation in Poland. American corporations are specially well positioned on the Polish market, having been boldly investing here since the early 90s.

On the other hand, Western European IT companies were cautious about the Polish market. According to last year's Computerworld TOP 200 report that presents the ranking list of IT companies with the greatest revenues, Microcomputer ranks the highest among the European brands. The Germany-based retailer with a countrywide PC sales network ranked only 22 in Poland. The positions of Fujitsu Siemens Computers, the Japanese-German joint venture, and SAP, a tycoon in the enterprise software sector, were even lower.

Local companies established at the beginning of the transformation period in the late 80s have long dominated on the Polish market. One of them was , once the largest PC manufacturer in this region of Europe. Optimus and similar companies had a competitive edge over foreign IT corporations mainly due to low prices and quick responses to the customers' needs. Local branches of Western companies were long unable to compete with very effective Polish suppliers. Frankly speaking, some of them did not even try.

Nowadays, HP is the unquestionable leader of the Polish IT market. HP is leading the consumer market, on which HP printers belong to the most popular brand-name hardware in Poland, and the enterprise market. HP's merger with Compaq Computer in 2002 further contributed to the strengthening of the organization's position. The leader is followed by such foreign suppliers with the highest sales figures as: IBM, Microsoft, Intel, Cisco, Dell, and Oracle.

HP well exemplifies the distance between Poland and the developed Western European markets. HP is leading the Polish IT market with sales levels of approx. EUR 400 million, whereas on the adjacent German market the annual sales levels exceed EUR 5 billion. This is more than the value of the whole IT market in Poland! The disproportion is even more conspicuous if one considers the contribution of all accession countries to the common IT market in the EU. The ten new member states will contribute only approx. EUR 12 billion to the vast European Union IT market, whose value is estimated at almost EUR 290 billion!


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