Overview

 (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 year 2020 marked the worldwide extension of the pandemic and the starting point of a major digital transformation in France. Although this sector experienced a -4.6% decline in revenue in 2020 it has been resilient in the face of the Covid-19 crisis and is projected to grow 4.8% in 2021. In fact, the pandemic created the necessity for the massive adoption of digital tools and has become one of the main drivers of economic recovery.  It is expected that the digital sector will grow 4.8% in 2021 as more and more companies realize the importance of digital transformation as France rebuilds its economy. As part of the Plan de Relance French Stimulus package, the government plans to spend $8.28 billion (€7 billion) on digital investments to support startups, infrastructure, and digital transformation. Growth in 2021 will be spurred by an increase in IT spending, digital transformation, migration to cloud, hybrid work policies, and an overall increase in workforce recruitment for this critical sector.

Source: Syntec Numerique 2020 review and 2021 Outlook

Leading Sub-Sectors

• Big Data (+ 23.4% growth expected in 2021)
• IoT (+ 21.6% growth expected in 2021)
• Cloud Computing (i.e. SaaS solutions) (+ 28.1% growth expected in 2021)
• Cybersecurity Solutions (+ 9.2% growth expected in 2021)
• Mobility
• E-Commerce
• 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 create demand for systems integration, especially regarding omnichannel commerce solutions and e-commerce. As 5G adoption continues to grow it 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 28%. 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 businesses investment, entry, and expansion, especially in France’s current market climate.

 The growing need for data storage and security for personal data has been further spurred by recent cyber-security concerns and strong data privacy regulations in France. France continues to prioritize personal data privacy, and in order for companies to conform to GDPR regulation, it is estimated to average over $30 million per unit among France’s 40 largest corporations. 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 a large impact on the approach of cloud providers and will neccessitate an updated approach by those affected by new regulations.

American tech companies are viewed as leaders in the sector with key players such as Microsoft, Apple, Dell, Adobe, IBM, Oracle and SAP having large market shares. However, in the past few years, the French and EU governments have begun to implement new digital policies that could significantly affect how American companies operate in these markets. New digital policies and regulations such as the Digital Markets Act and Digital Services Act could create a challenging environment in the French market, especially for large American platform providers.

Resource

• Nouvelle France Industrielle English
• Syntec Numérique (French software industry association)
• Commission Nationale de l’Informatique et des Libertés - CNIL

Contact: U.S. Embassy France - U.S. Commercial Service Trade Specialist

Philippe.Guerrier@trade.gov

Tel. : +33 (0)1 43 12 71 54