UK demonstrates software leadership

The UK plays home to companies that are among the best in Europe when it comes to demonstrating their innovation and leadership in the software space, according to research published by PricewaterhouseCoopers (PwC).

Home-grown software firms account for 15 per cent of the top 100 software companies in Europe, claims the EuroSoftware100 report, which was compiled thanks to input from representatives of software associations including the Business Application Software Developers Association (BASDA).

With worldwide revenue of €13.3 billion (£11.4 billion) or 2.5 per cent of the overall revenue generated by the entire top 100, the research found these UK companies created significantly more wealth than their Western European counterparts.

“Following significant UK presence in the top 100, the UK’s strength lies in the number of smaller companies ranked in the top 200,” said Jass Sarai, PwC’s head of software and IT services.

Sarai added that 33 UK businesses were ranked on the extended list, producing a total global revenue of €26 billion (£22.3 billion) or four per cent of the €617 billion produced by the top 200 companies in total.

Sage topped the UK chart, with Misys and Logica in second and third place respectively with a combined revenue of €1.5 billion (£1.3 billion). However, due to the dominance of SAP, the top three German companies created €8.9bn (£7.4 billion) in 2008. SAP followed by Sage came out top of the homegrown European software companies.

In 2008, the European market represented approximately 30 per cent of the overall worldwide software market, generating revenues of approximately €56 billion (£48.1 billion). And the German and French software companies that featured in the top spots generated €4.3b billion (£3.7 billion) and €1.2 billion (£1 billion) respectively.

Faced with a global recession, the research highlighted the fact that only one in five business-to-business deals ever get closed in the UK. “This worrying statistic should spur the UK software industry on to cement their lower cost sales strategy in these difficult times and remain a force to be reckoned with in Europe,” added Sarai.

Despite a strong UK and European showing, US and Japan dominated the listing, where US software suppliers for example, made up three quarters of companies in the top 20 listed and 30 per cent of the top 100, consolidating their position in the European market mainly through acquisitions.

Sarai concluded: “These are challenging times for the UK software industry. Those companies who seize the opportunities provided by technological shifts, which innovate and remain agile, will emerge stronger as the market reshapes itself.”

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