The IT market in Montenegro grew 42.2% to reach $79.01 million in U.S. dollars in 2007, according to a recent study (and the first ever done for the country) by research company IDC. Measured in local currency, year-on-year growth was 30.4%. Montenegro’s IT market spending surged, although from a low base year, due largely to a high number of government and telecommunications purchases and expanding household demand. Foreign direct investments concentrated on real estate in order to accelerate tourism. The banking sector also played a significant role in 2007.

“Digitalization of the government administration of Montenegro, begun in 2007 and planned for a five-year period, is a notable driving force for the local IT market, both directly and indirectly,” says Atila Madai, IDC Country Manager for both Montenegro and Serbia. “Growth in the number of ADSL users, now accounting for a third of the total population – as well as numerous VoIP licenses issued and the expansion of fixed wireless Internet – will decrease prices on the market and increase availability of Internet connection. Those factors, as well as Montenegro being at the top among European economies in transition with a large inflow of foreign capital, boosted the market in 2007.”

The software segment was the most dynamic in 2007, rising 90.2% in value for 11.3% share of the total Montenegrin IT market. IT hardware, however, continued to be the biggest segment, capturing 78.2% of the total market. IT services accounted for the remaining 10.4% of total IT spending in the country.

“The share of hardware in overall IT spending in the country reflects the fact that Montenegro is still in the basic infrastructure-building phase of IT development,” states Madai.

IDC expects IT spending in Montenegro to increase at a compound annual growth rate of 13.8% during the five-year forecast period to reach $150.51 million in 2012.

IDC’s Montenegro IT Market 2008-2012 Forecast and 2007 Vendor Shares (IDC #ESQ12Q) presents the IT market in Montenegro and forecasts total IT expenditures by technology through 2012. The study contains market size, vendor market shares, and growth projections for hardware, packaged software, and IT services provision. It analyzes market trends and provides valuable insight into the main drivers of individual market segments.