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Good times for German IT industry - Now is your time to enter the market

on Monday, 07 July 2014. Posted in Germany, Go-to-market

The IT market in Germany is on the rise. German IT companies could raise their sales in the first half of 2014 and are optimistic that this development will continue throughout the year.

BITKOM-Index-07-2014 ThumbGerman IT companies are very optimistic and content with their current economic situation. This is the result of the latest economic survey of BITKOM, the German Federal Association for Information Technology, Telecommunication and New Media.

The organization conducts this survey twice a year among German IT companies and mirrors the mood in its "BITKOM-index" which is calculated from the balance of the revenue expectations for the current half-year. This index climbed again by five points to 72 points and therefore reached its all-time high from 2011 again.

BITKOM-Index-07-2014

BITKOM-president Dieter Kempf puts it modestly by saying: "What we see here is quite pleasant", when he relates to the current economic activity in the German high-tech sector, presented in a press conference on July 1st.

Almost three fourths of the IT companies could raise their sales in the first six months of 2014. 13 percent declared decreasing revenues. Things went especially well for enterprises offering IT services or software: 84 respectively 81 percent of them could record increasing sales.

And overall the branch is confident that this positive development will continue throughout 2014. 81 percent of the German IT companies expect still raising revenues. This matches the prediction by BITKOM that expects a growth of the market by 1,7 percent to 153,4 billion Euro for 2014. The reason why this forecast is not as high as the positive mood in the industry might suggest is the wide spread within the different business areas of the branch: While some segments such as the before mentioned software and IT services are booming, the development of other segments like IT hardware stagnates or as in the case of telecommunications services is even declining. Because the latter alone constitutes almost one third of the whole IT market in Germany though, its situation weighs down the general growth of the industry to some extent.

But still, more than two thirds of the companies want to hire new employees in 2014. By the end of the year BITKOM expects a number of 927.000 people working in the German IT industry, 10.000 more than in 2013. So the IT market remains the second largest industrial employer in Germany behind mechanical engineering. The shortage of skilled IT staff is still a big issue though. Every second company declares that the lack of appropriate personnel is hindering the development of their business.

"If you are looking to enter the German IT market, time is now", says Bernd Hoeck, managing partner of the go-to-market think tank bloodsugarmagic. "To enter the market you should think about joint ventures and other forms of cooperation. Having a local German partner or installing your own team in Germany now is a must."

The go-to-market expert suggests three key issues that you should have in mind when entering a new market:

1. Use local advice and networks. Using local IT expertise will save you from many pitfalls and mistakes. In addition, using an existing network will accelerate your entry.

2. Speed and timing are key. As the numbers of BITKOM show, the mood on the market is on a new high. Don't wait too long to get on board!

3. Seed the market before you enter it. Get in touch with opinion leaders and local influencers first to make your company and product known und generate demand before your team hits the ground.

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