France
Computer Services and Software (CSF, CSV)

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2019-10-13

Overview

  2016 2017 2018 2019 (Estimated)
Total Local Production 52,933 55,866 60,797 60,975
Total Exports 10,840 11,440 12,450 12,486
Total Imports 15,565 16,428 17,878 17,930
Imports from the US
 
8,422 8,888 9,672 9,700
Total Market Size 57,658 60,854 66,225 66,419
Exchange Rate 1 Euro USD 1.1069 USD 1.1297 USD 1.1810 USD 1.14

(total market size = (total local production + imports) - exports)
(Figures in USD millions; * indicates unofficial estimates.
Year to year figures adjusted for varying exchange rate.)
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
 
The Market place for Computer Services & Computer Software
Valued at $62 billion in 2018, France’s market for computer software and services grew by 4.1% in 2018 and stands as the third largest in Europe.  IT Consulting and Services represent $38 billion of this market. Market growth for 2019 is expected to reach 3.9%.  Two thousand firms in this sector produce 80% of revenue. There are currently 28,000 French firms employing 474,000 employees, all focused on software and services. From 2017 to 2018, 28,000 jobs were created in this industry.

The market is divided among the three following activities: Consulting & Services (61%); Software publishing (21%); and Technology Consulting Services (17%). In France, there are ten top information technology service firms that dominate the French market: Capgemini, ATOS, IBM, Sopra Steria, Orange, Accenture, CGI, Hewlett Packard, GFI and Econocom. In the computer services sector, the implementation of software as a Service (SaaS) products has largely influenced market growth. The market for these products is currently $3.14 billion and is expected to reach $3.26 billion in 2019. The SMACS (Social, Mobility, Analytics, Cloud & Security) experienced a 16% growth in 2018 to reach $13 billion, or 25% of total spending in the computer services and software sector.  Software publishing has grown by 5.3% to reach $13 billion. Top companies in the software publishing sector have experienced increased diversification and decreasing revenues. The weight in revenue of the top 10 French companies has decreased by 10% over the last ten years.

This trend of decreasing company weight in terms of total market revenue is obvious throughout the Software & Services market, which has become increasingly heterogeneous, especially with the entrance of newcomers from various sectors: telecommunications, temp agencies, computer hardware firms, defense firms, and network interrogators. The most rapid growth has occurred in the Cloud Market, as interested firms expand into Europe and enlarge their number of data centers. This market has recently witnessed the entrance of companies such as Amazon, which recently brought its first local cloud infrastructure to France, and that of Orange, known as “Flexible Engine.”

The cloud computing market in France grew by 23% between 2017 and 2018.  It stands as a dynamically structured high growth sector worth over $11.23 billion. This market is expected to continue growing rapidly in the future because of increased demand, which is largely driven by the distribution, eCommerce, industry, and service sectors. As cloud usage, whether public, private, or hybrid, is expanding into the French marketplace, concern over the safety of personal data is also growing. The implication is two-fold. It presents an opportunity for the cloud market to offer a more secure method for data storage, especially for SMEs (whose data storage may be less secure than larger enterprises). However, it also presents a challenge because companies will have to adjust to new regulations concerning data – with large financial repercussions if they fail doing so.

As of May 25, 2018, the General Data Protection Regulation (GDPR), which regulates the protection of EU personal data, has imposed specific obligations on processors, who may be held liable in the event of data breaches. This new regulation has been imposed throughout the EU and EEA region and applies to all European Union citizens, regardless of where the business is established. The GDPR has sweeping consequences for businesses, even in the areas of marketing and especially customer engagement. Failure to comply with new regulations can result in fines of up to 4% of a company’s global revenues or $24,6 million, whichever option is greater. To ensure compliance to the GDRP, it is suggested that companies appoint a data protection officer (DPO) or data controller. Even smaller businesses or those not processing large volumes of personal data, should at least appoint a primary point of contact for the protection of this data, whether that individual is internal, or the role is outsourced.
 
Leading Sub-Sectors

  • Big Data
  • Cloud Computing (i.e. SaaS solutions)
  • Mobility
  • Cybersecurity Solutions
  • eCommerce
  • Outsourcing / BPO
  • Social business
  • “Apps” software applications in smart phones
  • Facilities management and Third-Party Maintenance of Applications (TMA)
  • Facilities management of infrastructures
  • Externalized R&D
  • Integration of Information Processing Systems
  • Integration of smart phones and tablets into the existing IT infrastructure
  • Integration of social networks into the sales/marketing model
  • E-health/Tele-Health
  • Smart Grid/Smart Metering   

     

Opportunities
In the market as a whole, researchers expect growth in the following areas: document and process digitization; digital user services; data management and processing; information system sharing, and especially cloud computing. Increasingly widespread and affordable high-speed Internet (5G) access and wireless connectivity will maintain demand for systems integration, especially with regards to omnichannel commerce solutions and eCommerce in general, which benefits from its lower costs and increased mobile accessibility.  The coming to market of 5G will further boost the development of solutions in IoT and Artificial Intelligence.

While market growth of consumer software and services hovers around 4%, the cloud market keeps on expanding at a rate of 21%. The public cloud market, one of its fastest growing subsectors, grew by 49% over the same period. The cloud (and especially the public cloud) market is becoming an increasingly attractive commercial opportunity.  As a whole, high growth in the cloud market represents an opportunity for business investment, entry and expansion especially in France’s current market climate.

In France, the growing need for data storage and security for personal data has been further spurred by recent cyber-security concerns and GDPR implementation. Spending in order to conform to RGDP regulation reached $1.23 billion in 2018 and is anticipated to reach . While these developments present an opportunity for cloud providers to provide solutions and respond to increased demand, it is also important to keep in mind that these changes will have an large impact on the approach of cloud providers and will necessitate an updated approach by those affected by new regulations.
 
Web Resources

Contact:
U.S. Embassy - U.S. Commercial Service Commercial Specialist
Charles.Defranchi@trade.gov
Tel: +33 (0)1 43 12 71 63
Website: export.gov/france