European software shows good growth in delicate economic circumstances

Despite difficult times, Europe’s software industry grew by 14 per cent in 2010, according to European private equity firm Truffle Capital’s sixth edition of its Truffle 100 ranking. The league table of the top 100 European software companies was drawn up with the support of Neelie Kroes, European Commissioner for the Digital Agenda.

"This latest edition of the Truffle 100 Europe reveals the software industry’s dynamism in a particularly difficult economic climate,” said Truffle CEO Bernard-Louis Roques. “The software industry is a reliable bet for innovation, economic growth and the creation of highly qualified jobs.”

But even though the industry is still managing to grow - with a 14 per cent year-on-year increase, it faces more challenges than ever. Cloud computing, Software as a Service and mobile computing are revolutionising the business models in the industry and competitive pressure from US companies with larger financial resources has never been greater.

“In this volatile market, the ranking of the top 100 European software vendors underlines the dynamism of the software industry and demonstrates how important the software industry is to Europe’s future to ensure sustainable growth in a highly competitive global economy,” said Franck Cohen, President of EMEA at the German software company SAP.  “In today’s ever-changing environment, innovation is crucial to remain competitive while technology is the foundation for sustainable growth.”

Bo Lykkegaard, Programme Director - European Enterprise Applications,  at the marketing research company IDC, which helped carry out the survey said, "In 2010 and 2011, we saw the European software industry undergo continuing globalisation and specialisation. These two aspects are closely interconnected for European software companies, since a high degree of specialisation is needed for global competitiveness. We have seen companies divest unrelated software businesses and/or acquire well-matched companies to deepen their functional capabilities.”

While HP's acquisition of UK-based Autonomy is a loss to the European software industry, major acquisitions have happened in the other direction, such as Sweden-based Hexagon's $2.1-billion acquisition of US-based Intergraph and SAP's $5.8 billion acquisition of Sybase in 2010.

“We find that European companies have particular strengths in horizontal business applications, engineering applications, and industry-specific applications and we believe that these areas will continue to be strongholds for Europe’s software industry,” Lykkegaard said.

This sixth edition of the Truffle 100 Europe report shows that the number of R&D jobs again grew between 2009 and 2010, up from 54,180 in 2009 to 55,268 en 2009,  a 2 per cent increase.

The Truffle 100 Europe companies posted a mean increase in turnover of 14 per cent. SAP is still first; Dassault Systems takes SAGE’s second position in 2010; SAGE is now third; Software AG is still 4th; and DATEV, which was 14 in 2009, is now 5th in the ranking.

Further information: www.truffle.com.