Dutch software companies are outperforming the broader market, buoyed by the growing importance of software in everyday life and the advent of cloud computing. The result is that software companies have the wind in their sails: with the business sector making larger investments in efficiency and security, combined with a growing emphasis on cloud computing, the Dutch software industry is capturing new markets and seeing significant export potential. Indeed, the Netherlands is becoming an international hotspot for software companies, a conclusion ABN AMRO published today in an update on the software market.
Software paves the way for IT market sales growth
The IT sector is clearly outperforming the economy as a whole. ABN AMRO believes this outstanding performance can be attributed almost entirely to the software market. Software sales have seen a 4 per cent rise this year, and ABN AMRO expects that growth to continue in 2015. Compared with those of other countries, the Dutch software market is relatively small, one which ABN AMRO sees as a typical SME sector. And it’s precisely the smaller software companies which are seeing the highest growth in sales. Since many small, young software companies are cloud-based, their product and service offerings are more flexible and innovative than those of traditional firms. It’s clear that cloud computing is changing not only the way the IT market operates, but also the industry itself.
Cloud computing has captured 20 per cent of the IT market
Cloud computing is also showing strong sales growth. Estimated at 29 per cent, that growth has resulted in an increase from 16 to 20 per cent in the share now held by cloud services in the total software and services market. Although the market is growing quickly, ABN AMRO points out that most of the business sector still has to decide whether and how to implement cloud computing. Further, the impact of cloud computing on IT firms can vary widely. Often providers at the forefront of the industry, smaller software companies are now reaping the rewards of growth in this market.
More export opportunities for Dutch software
ABN AMRO sees promising growth potential for cloud computing in the coming years. New markets are opening up outside the Netherlands and in new business segments, including SMEs, thanks to the Software-as-a-Service (SaaS) business model, thus driving Dutch software exports. Between 2010 and 2014, exports doubled – from EUR 1.5 billion to EUR 3.1 billion. The share of export revenues totalled 7 per cent in 2013, and 13 per cent in 2014. Software makers, however, currently have a 20 per cent share. ABN AMRO expects this strong growth in Dutch software exports to continue in the coming years.