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Sep 17, 2007 14:54 EEST
September 17 (SeeNews) - Croatia's IT services market surged by almost 40% on the year to some $310 million (223.4 million euro) in 2006, boosted by robust economic growth, government spending in the sector and foreign investments, market intelligence and advisory company IDC Adriatics said on Monday.
"The steep growth was fuelled by the dynamic economy, increased IT investment by the government, banks, and telecoms providers, European Union and World Bank funding of IT services contracts, as well as by a new wave of IT spending by domestic enterprises that had previously neglected IT investments," IDC Adriatitc said in a statement.
IDC Adriatics added that it expected that the market would slow down over the next five years, to an average annual growth rate of around 10%.
"In the medium term, transparency and the need for competitiveness related to the country’s accession to the EU will be the main driving forces for IT services spending in the corporate and government sectors," Boris Zitnik, IDC Adriatics managing director said in the statement. "The extremely fast expansion we saw in 2005 and 2006 will inevitably slow in the coming years, though, as the market approaches saturation," he added.
According to IDC, the top three IT services provider in terms of revenue in Croatia in 2006 were IBM, Combis, and Apis IT. Together they captured almost a quarter of the market.
At almost 25%, the combined customisation category had the largest share of the IT services market in 2006, IDC Adriatics said. It was the fastest growing segment in 2006, expanding by almost two thirds over 2005. Hardware and software support and installation accounted for 24% to the total, and the systems integration category made up more than 23%. IT outsourcing contributed for almost 19% of the IT services market and was the second fastest growing segment last year with 63% year-on-year growth.
The government sector was the largest vertical market for IT services in Croatia in 2006. Its spending accounted for more than 22% of the overall market. The financial sector spent grabbed 21% while the telecommunications sector had 15.6% share of total IT services investment last year.
IDC Adriatics (www.idccroatia.hr) is the Croatian unit of U.S.-based IDC.
($= 0.7208 euro)
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