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The Germany IT market size is estimated to grow by USD 31.1 billion, at a CAGR of 4.07% between 2023 and 2028 The market is experiencing significant growth, driven by several key factors. Firstly, Small and Medium-sized Enterprises (SMEs) in Germany are increasingly adopting IT solutions to enhance their operations and competitiveness. This trend is expected to continue, fueled by the availability of affordable and effective IT solutions. Secondly, enterprises in Germany are embracing cloud-based services, which offer cost savings, flexibility, and scalability. Cloud adoption is particularly prevalent in sectors such as finance, healthcare, and retail, where data security and compliance are paramount. Thirdly, the digital infrastructure in Germany is improving, with the government investing in high-speed broadband and 5G networks. This investment is expected to further boost the adoption of IT solutions and cloud services, creating new opportunities for businesses in the IT sector. In summary, the IT market in Germany is thriving, underpinned by the increasing adoption of IT solutions among SMEs, the growing preference for cloud-based services by enterprises, and the ongoing investment in digital infrastructure.
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The market is a vibrant and dynamic sector, home to numerous IT companies that cater to various subsectors, including IT services, hardware, and software. The digital agenda is a key driver of growth in this industry, with cybersecurity and ePrivacy regulation taking center stage. Artificial Intelligence (AI), automation, data analytics, and cloud computing services are some of the IT services in high demand. The IT industry in Germany is a significant contributor to the economy, with a skilled IT workforce providing consultation services to small and medium enterprises (SMEs) and large corporations. Social media networking sites have become essential tools for businesses, leading to increased demand for database management and library services. Hospitals, banks, shops, and other establishments rely on IT hardware and software to streamline operations and enhance customer experience. However, with the increasing use of technology comes the risk of security threats. IT employees are tasked with ensuring the safety of digital assets, making cybersecurity a top priority. Third party IT professionals play a crucial role in providing specialized services, such as AI and automation, to businesses that may not have the resources to develop in-house expertise. The market continues to evolve, with innovation and adaptation being the keys to success.
The increased adoption of IT solutions among SMEs in Germany is notably driving market growth. SMEs are the backbone of the German economy and represent more than 99% of all companies in the country. These companies range from sole proprietorships to companies with hundreds of employees and export their products and services around the world. German medium-sized companies are known for introducing and actively promoting innovation at the product and process levels. They invest in IT to stay up to date with the latest technology. Small and medium-sized businesses in Germany are making extensive use of technologies such as cloud computing, big data, and the Internet of Things (IoT) to improve operational efficiency and find new ways to generate revenue. The goals behind investing in these technologies include reducing IT infrastructure costs, extracting accurate business insights from enterprise data, and improving production efficiency and business processes. Digitization is one of the key priorities for German medium-sized companies. Many companies are replacing manual processes with digital workflows using software and IT services companies.
Moreover, other companies are taking a holistic approach and looking to digitize the entire value chain, including the procurement, production, and delivery of products and services. Automotive groups such as Volkswagen, for example, have set up several self-managed production facilities to automate individual steps of the manufacturing process. German SMEs are increasingly deploying ERP solutions and CRM software to improve customer engagement and retention. These companies are reducing operating costs by investing in communication platforms to facilitate online and real-time collaboration, and by using social media platforms to promote their products and services. Many such factors drive the growth of the Germany-IT market during the forecast period.
Government support for AI is identified as the key trend in the Germany-IT market. Despite the general adoption of AI among German companies, the federal government encourages companies to consider all application areas for AI-based solutions. According to a 2018 study commissioned by the Federal Ministry for Economic Affairs and Energy, AI is expected to boost the country's manufacturing output by more than USD 34.35 billion by 2023. The federal government has announced that in its 2020 budget, it will provide USD 572.5 million to boost its AI strategy beyond 2020.
Further, the government plans to invest up to USD 3.44 billion by 2025 to implement this strategy. Germany is modernizing its AI competence centers at the regional level by establishing separate centers in each region and connecting them to a common network. With federal backing, many providers are opening their AI research centers in the country. Government efforts are supporting R&D to develop AI and promote AI adoption in German companies, which will drive the growth of the Germany-IT market during the forecast period.
The shortage of skilled IT professionals may impede market growth. German companies are currently facing a serious shortage of IT specialists. A lack of professional qualifications is reducing the number of vacancies for candidates. Professionals with the necessary qualifications, work experience, and skills are highly remunerated. Therefore, it is difficult for SMEs and public sector companies to recruit suitable candidates. The federal government plans to recruit staff from other parts of Europe to fill these vacancies and is taking steps to simplify immigration laws for foreigners seeking employment in the country.
Moreover, the number of job openings in the IT sector has increased, reaching more than 1.3 million in 2020. But most of the vacancies still remain vacant. The shortage of qualified IT professionals in the areas of cloud, AI, big data, and IoT can seriously hamper German companies' digital transformation efforts. This may adversely affect the Germany-IT market growth during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Germany-IT market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Broadcom Inc.- The company offers IT services such as networking and data centers.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the manufacturing segment will be significant during the forecast period. Manufacturing is one of the most important sources of revenue generation for the German economy. The country is home to some of the world's largest automotive and engineering companies. There are many small and medium-sized manufacturers in the country.
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The manufacturing segment showed a gradual increase in the market share of USD 27.80 billion in 2018. Manufacturing companies in Germany are adopting cloud-based software for enterprise applications, big data, and analytics applications. Using cloud-based solutions reduces data processing time for companies. This enables companies to build a data-driven operational environment. German companies are also working to develop execution systems with monitoring and control functions. Technology supports the planning, implementation, management, and investment of new technologies in manufacturing. Therefore, the use of manufacturing intelligence will enable industries to accurately infer mechanical and process engineering challenges and move to advanced data collection methods using sensors, actuators, equipment, production analytics, etc., thereby increasing efficiency. Such factors are expected to drive the growth of the segment during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is a significant contributor to the country's economy, encompassing various subsectors, including IT services, IT hardware, and the software sector. In the healthcare domain, IT solutions are transforming the industry with Health IT, integrating smart social business platforms, and virtual and augmented reality technologies. The digitalization of industries, such as prisons, hotels, airports, and train stations, is driving the demand for IT services and integrated systems. The IT software and service segment is thriving, with a focus on AI research and adoption. Germany's National AI Strategy aims to position the country as a global leader in AI technology. AI is being integrated into various industries, from manufacturing with Digital Factory concepts to software applications like libraries and computers.
Moreover, IT security is a critical concern, with the increasing reliance on internet access and internet penetration. The artificial intelligence market is witnessing significant growth, with software AI solutions being adopted across various sectors. Overall, the market is dynamic and diverse, catering to the evolving needs of businesses and industries. The market is a significant contributor to the country's economy, encompassing various subsectors including IT services and hardware. The IT services companies is thriving, with numerous companies specializing in IT consultation services, software development, and third-party IT professional services. In the IT hardware sector, German businesses invest in advanced hardware systems to support their digital transformation. The software subsector is another key player, with many organizations developing and implementing custom software solutions to streamline operations and enhance productivity. Overall, the German IT market is a dynamic and innovative industry, driven by the demand for digitalization and technological advancements.
Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.07% |
Market growth 2024-2028 |
USD 31.1 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.84 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
badenIT GmbH, Broadcom Inc., Capgemini Service SAS, Cisco Systems Inc., Dell Technologies Inc., Fortinet Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., HUNARI Arik and Hunneck GbR, Infosys Ltd., International Business Machines Corp., Juniper Networks Inc., Lenovo Group Ltd., nextevolution GmbH, Oracle Corp., Siemens AG, Tata Consultancy Services Ltd., Toshiba Corp., and VACE Systemtechnik GmbH |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Application
8 Customer Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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