Germany - global issues
start to impact IT
By Alex Pullin and Alex Brownsell
In our last national survey of Germany a year ago,
the garden looked very rosy. Consumer buying,
telecoms and broadband had risen and a lot of
investment was being placed by German companies.
Since then it seems that, while the market is still
strong, the world economy has intervened to limit
potential. Resource issues have been rising, but the
powerhouse in the mid-market remains, and it still
is SAP’s home base...
t’s long been known as one of Europe’s strongest markets, but it certainly is
I
an interesting, not to mention curious, time to be looking at Germany and
its economics and business issues.
Financially, the situation with the rising euro is perhaps more troubling than Germany’s ICT market has been going up at an impressive rate, according to
previously; Germany seems to be one of the best placed countries to deal EITO figures. In 2004, it was measured at €63,816m; now in 2008 it is €72,600m.
with it, but while the dollar/euro rate seems to be deteriorating a lot faster The Economic Global Surveys Trends Survey, released at the end of last year,
than some expected so inflation has picked up to 3.5%. Consequently, the reported a general slowdown in European economies, going from 2.8% in
European Central Bank has been reluctant to cut rates. Yet while most markets 2006, to 2.6% in 2007 before being forecast to drop to 1.9% in 2008. Germany
remain nervous about possible fallouts, Germany continues to attain strong however, was one of the few countries emerging with some strong positives.
levels in exports particularly to Asia. Market labour reforms have helped create stronger employment growth,
The consequences stretch further as Germany’s position in Europe is improving consumer demand from a temporary setback caused by the rise in
affected by others. Spain in particular, is expected to suffer in spite of re- the VAT rate in Germany at the beginning of 2007.
elected Prime Minister, José Luis Rodríguez Zapatero’s recently announced In the IT market itself, the pattern is similar: Peter O’Neill, principal analyst
fiscal stimulus to help it though this period. Given that Spain has in recent at researcher Forrester’s Munich office believes that consolidation seems to
years accounted for a big chunk of euro-zone growth and close to half of all be the current name of the German game. “The German ICT market is über-
jobs created in the euro area, its slowdown will be widely felt. Germany will be mature, very slow to change and conservative. Growth is between 2% to 3%
able to remain strong through this period, but cannot be unaffected. per year, while the GDP is around 2.6%. German buyers are conservative. There
18 18 APR 2008
It0807 - 18-21_GERMANY_Ent.indd 18 2008-04-16 10:59
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