Market Overview

Poland is expected to maintain its status as one of the Central and Eastern Europe (CEE) region’s fastestgrowing IT markets over the 2010-2014 forecast period, thanks largely to EU funding for information and communication technology (ICT) and information society-related initiatives. However, the current global economic headwinds will mean slower growth during BMI’s five-year forecast period compared with the pre-economic crisis 2006-2008 trend level.

The size of the IT market is estimated to increase to around US$9.2bn in 2014. IT spending per capita of around US$175 is considerably below the level of, say, the Czech Republic. Poland accounts for less than 2% of EU IT spending and also lags behind fellow EU newcomers Hungary and Slovakia on per capita IT spending. There are also broad disparities in PC penetration between urban and rural areas. The IT market is expected to grow at a compound annual growth rate (CAGR) of 7% between 2010 and 2014, with IT services driving growth for the sector as a whole. Enterprise IT spending should pick up in 2010, with an improvement in the external trading environment triggering upgrade cycles postponed from 2009. Business and consumer investment will remain vulnerable, however, to any sign of weakness in the eurozone or global economic recovery.

Industry Developments

Poland’s National IT Infrastructure Plan for 2007-2013 was formally adopted by the government in 2008, following a public sector IT spending slowdown in preceding years. In 2009, EU funding drove a series of projects, with the IT component to be worth nearly EUR1bn. According to the National IT Infrastructure Plan, some 75% of funds spent on government IT projects over the next five years is expected to come from the EU.

BMI forecasts that wireless internet access will grow rapidly. Poland’s broadband operators are also encouraging xDSL and cable-based broadband take-up by offering new innovative services, such as IPTV, video on demand and VoIP in double- and triple-play packages. Such services will encourage subscriptions and drive spending on computers and other household electronics products.

Competitive Landscape

In December 2009, however, PC giant Dell announced that it would sell its Poland plant to Taiwanese original equipment manufacturer giant Foxconn, which will continue to make Dell computers there. The deal is an example of how Dell has moved away from its original strategy of building PCs to order at its own factories. In September 2009, the European Commission had approved a regional aid packaged of EUR54.5mn for Dell Poland to support the establishment of a new manufacturing facility.

In 2010, Microsoft hopes that sales of its Windows 7 operating system, launched in October 2009, will boost its sales in the Polish market. In the summer of 2009, Microsoft continued to lay the groundwork for the new operating system launch and released the enterprise version of the software in August. Going forward, IT service providers will focus on providing specialised vertical solutions, particularly for key segments such as financial services and telecoms. In 2009, Comarch, a global provider of software and services for the telecoms industry, completed a major project for leading telecoms company Polkomtel. The solution was to facilitate billing of mobile virtual network operators (MVNOs) and content providers.

Computer Sales

Poland’s computer hardware sales are projected at US$2.5bn in 2010 and are forecast to reach around US$3.5bn in 2014. In 2009, sales contracted by a double-digit factor. Demand fell through a combination of reduced consumer and business confidence, and a recovery in 2010 will depend on confidence in a sustained economic recovery. PC penetration reached around 50% in 2008 and BMI projects that it could reach 70% by 2013. Falling prices of both desktops and notebooks have been a major growth driver for the hardware market, along with EU aid and overall economic recovery. Research has revealed that Poles are starting to purchase more high-end computers.

Software

The Polish software market is projected to be worth US$1.6bn in 2010 and is likely to grow to US$2.1bn by 2014, giving a CAGR of 7%. The launch of the Windows 7 operating system has the potential to impact positively on sales in 2010. Rising computer penetration in the enterprise sector has driven continued growth of software demand, despite software piracy issues. The procurement of basic software packages such as enterprise resource planning (ERP) still accounts for about half of enterprise software spending, particularly in the manufacturing sector. However, vendors are increasingly focused on more specialised applications, such as customer relationship management (CRM) and business intelligence, where faster growth is possible.

IT Services

IT services spending, projected at US$2.5bn in 2010, is the fastest growing sector of the IT market and is expected to rise to US$3.6bn by 2014. In 2010, vendors are expected to benefit from IT projects tendered across sectors ranging from universities to banks and financial institutions, from utilities to the public sector.

With a larger installed IT base, acceptance of the need for IT services is spreading through many organisations. While systems integration as well as hardware and software support and installation still collectively account for more than one-half of total IT spending, outsourcing has become the fastestgrowing segment.

E-Readiness

The internet market continues to be constrained by high telephone charges and relatively low levels of computer penetration. Moreover, there are wide regional disparities, with internet penetration about twice as high in urban as in rural areas.

A recent Forrester survey revealed that, while overall online banking uptake and PC availability remained low, Polish internet consumers already matched southern Europeans in online shopping. Poland even outperformed Spain, with 30% of online consumers having previously purchased something online, compared with just 29% in Spain.

How broadband will develop in the longer term will greatly depend on the Polish regulator’s success at forcing Telekomunikacja Polska (TPSA) into a functional split, as well as its continued liberalisation of the market. The regulator believes that the split will happen in 2010 or 2011, but there are high risks that it could be delayed longer than this. How wireless technologies are deployed to the rural regions will also be a major factor in the proliferation of broadband.