In the past three years, the Italian Information Technology market has suffered considerably from the international economic recession and this situation has also had negative effects on the computer services sector.  In 2005, revenues of the computer services sector are valued at $11.505 billion, representing a decrease of approximately 0.5 percent in Euro currency over 2004.  Nonetheless, several signs of recovery are appearing and prospects are improved: the sector is forecast to register positive growth over the next three years, supported by investments from medium and large-sized Italian enterprises wishing to streamline their operations.

The decrease in growth was mainly due to clients trying to reduce the number of new projects in order to contain costs and to vendors competitively down-pricing in order to retain their customer base.  However, while there was a fall in demand for design and application development services and for training services, and very limited growth for consulting services and system integration, a good performance was registered for outsourcing services, and in particular for "selective" outsourcing services (such as applications management, desktop and network management). Together with the growing segments of Business Process Outsourcing and Business Transformation Outsourcing, they are expected to gain momentum and to be increasingly utilized as tools to promote efficient and cost-effective business operations.

Internet-related services to support intranet/extranet and e-business solutions also performed well, as did integration of Web and e-commerce solutions with ERP, supply chain management and customer relationship management solutions. Integrated ICT security is finally being perceived as a core business requirement, and ICT security spending is turning increasingly important for Italian enterprises.

Companies in vertical markets, particularly in banking, manufacturing, media, professional services, and health care, are expected to continue to invest in computer services.  Public Administration is a large investor in information technology and will continue to represent a key end-user as the Italian government attempts to advance Italy’s information society.  

The computer services market is heavily fragmented among over 56,000 operating companies.  The 15 largest companies hold approximately 80 percent of the business, while the remaining 20 percent is divided among a plethora of small companies, often very specialized by vertical market segments and serving the needs of SMEs.  The U.S. dominates the market and most major American computer services companies have opened Italian subsidiaries...(continues)

Please note:
This Industry Sector Profile is also part of the more comprehensive
ITALY COUNTRY COMMERCIAL GUIDE 2006.