New Market Report Now Available: Israel Information Technology Report Q3 2013

IT spending is expected to reach ILS23.18bn in 2013, with relatively stronger growth in software and services, compared to hardware as the market matures. Although hardware sales are in relative decline, the release of Microsoft Windows 8 in October 2012, and associated innovation from vendors that has deepened the tablet market and seen hybrids appear on the market, offers scope for growth. Nonetheless the market will increasingly be driven by software and services in key sectors such as government, defence and financial services - resulting in IT services accounting for 36.4% of the overall market spending by 2017.

Headline Expenditure Projections

Computer Hardware Sales: ILS9.83bn in 2012 to ILS9.81bn in 2013, down 0.2% in local currency terms. The slowdown is primarily the result of macroeconomic factors, but Israeli businesses are investing more to facilitate expansion and development and sales growth should strengthen from 2014.

Full Report Details at
- http://www.fastmr.com/prod/617056_israel_information_technology_report_q3_2013.aspx?afid=303

Software Sales: ILS5.14bn in 2012 to ILS5.25bn in 2013, an increase of 2.1% y-o-y. Device and data proliferation will drive spending on customer relationship management (CRM), databases and business intelligence.

IT Services Sales: We expect IT services sales will outperform the rest of the IT market, increasing from ILS7.95bn in 2012 to ILS8.12bn in 2013. Stable sectors such as government and defence offer continued revenue opportunities, while growth will be derived from cyber and data security, cloud computing and outsourcing.

Key Trends & Developments

* The IT market in Israel continues to be held back by the wider economic environment, underpinning our view of weak IT market sales growth in 2013. Despite a domestic slowdown and global economic headwinds, a significant number of opportunities remain. The launch of Windows 8 operating system and an expected increase in tablet sales will offset some of the economic slowdown in the retail hardware market, as will the development of multi-use hybrid notebooks by Windows vendors in 2013 and 2014.
* The IT services market will also fare better than either software or hardware, with sales driven by cloud computing, outsourcing and security. As a wider range of cloud computing products are released, and increased competition between vendors lowers prices, uptake will increase among enterprises and government. Particular areas of opportunity for cloud computing include banking and retailing as organisations in those fields looking to save money on hardware investments. Businesses will not only seek to make cost savings, but will look to boost efficiency and increase flexibility of response to customer needs.

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