Stagnation in Czech IT Services Market

Stagnation in Czech IT Services Market

Although it is the most mature software and IT services (SITS) market in Eastern Europe, the Czech Republic remains notably behind the Western European average, with only EUR 164 spent on SITS (Software and IT Services) per capita, compared to EUR 534 per capita in Western Europe.

“At the moment, the Czech IT market is relatively active but with several small projects. This is of course partly due to the to lower IT budgets resulting from the ongoing cost cutting, but it is also due to continuously diminishing local decision making” comments Madalin Dobre, Senior Consultant at Pierre Audoin Consultants (PAC) Eastern Europe. Most of the large industry solutions implementations, ERP rollouts and outsourcing contracts are decided only at the level of the headquarters of the companies.

The software segment is dominated by maintenance of installed solutions, by point-functionality developments/upgrades and investments in tools for increasing internal efficiencies. The Czech market continues to feel a strong price pressure for system integration and custom-development due to lower demand; and there may be room for further decline.

“Despite the current situation, outsourcing segment is mostly pushed by regional contracts with few concrete opportunities at the local level. At the same time, new concepts (such as cloud computing and mobility) are being talked about, but there has not been any action yet” says Madalin Dobre, PAC Senior Consultant.

The public sector is also disappointing as several IT projects have been put on hold and the funding being received from the European Union is not being utilized. It remains to be seen how the market will behave from the second semester of 2012 to the end of 2013, as the EU funds period comes to an end.

Source: PAC
CATEGORY: Czech Republic

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