The ITC market in Europe was worth €1.6 trillion in the year to the end of March 2019, with total net profit of €160 billion and a workforce of 6 million. Breaking the total down into broad categories we see:
- Telecom service was the largest in terms of revenues (€539 billion) and second in headcount (1.6 million), but last in terms of net profit (€30.1 billion). The sector is led by national (ex publicly-owned) suppliers such as Vodafone, Deutsche Telekom, France Telecom, BT, Telefonica,Telecom Italia, etc.) and is going through its own ‘digital transformation’ with the introduction of NFV virtualisation internally and the introduction of 5G networks for customers.
- IT service was the second largest category in terms of revenues (€483 billion) and net profit (€48 billion) and top in terms of employment (3.1 million). While there are a few indigenous large suppliers (Atos, SAP, Cap Gemini for instance), the market leaders are US suppliers Accenture and IBM. Despite its dominance as a subject, cloud services (IaaS and PaaS) only accounted for 5% of revenues in the year.
- Hardware was the third largest category both in terms of revenues ($292 billion) and net profit (€33 billion), but fourth in terms of employment (631k). The leading suppliers were Samsung, Apple, HP, Dell, Lenovo, Cisco in the year. You have to go all the way down to eighth place to find the first European supplier (Nokia) and eleventh for the second (Ericsson). Despite all the ‘hooha’ of president Trumps trade war, Huawei was only the tenth largest hardware supplier in Europe (but vitally important for the introduction of 5G networks by telecoms companies).
- Software was the smallest category in terms of revenue (€253 billion) and third in terms of employment (728 million); however it was first in terms of net profit (€49 billion). The largest suppliers were Microsoft, Oracle and IBM. The largest European suppliers were SAP (fourth) and Dassault (tenth).
As new nationalism begins to affect the flow of ITC products and adoption of services worldwide, Europe is being hampered by its past openness to trade, which has helped US suppliers dominate in innovation, software and patents and Asian (especially Chinese) ones in terms of manufacturing and production. If this worrying trend needs to be countered my advice to the EU is to group the indigenous telecom suppliers together to create a bloc that can succeed in the era of algorithms, autonomous vehicles, IoT and robotics and to sponsor as many software companies as it can, where the barriers to entry are lowest for success on the world stage. We need our indigenous suppliers to be more successful to prevent the increase in digital surveillance and overt influencing of our political, social and economic lives by foreign governments through connections forged through their ITC suppliers.
I hope you find this useful – I have stats for European countries, Asia Pacific and the Americas if you need them of course. Just contact me if you need them.
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