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Poland
Of the ten new countries that joined the EU on May 1st this year, the largest is Poland, both in terms of geographic size and population. With a population of 39 million, Poland ranks eighth in Europe.
The so-called "shock therapy" program during the early 1990s has seen Poland transforming its economy into one of the most robust in Central Europe.
The Polish ICT Market
Previously, the IT and Telecommunications Industries (ICT), like all others, were hampered by being government owned, with the resultant censorship of the technology-infrastructure and resources. However, a policy of liberalization and privatisation has led to a trend away from government control and to more ownership by private companies.
While the dominating trend in the Polish ICT sector is an integration of computer and telecommunications technologies, Poland's ICT sectors have more or less followed the trends observed in Western Europe, although in some aspects they are approximately three years behind in terms of the latest technology. During the last five years Poland’s IT market has developed very rapidly and despite experiencing an economic slow-down, a current low GDP growth and high unemployment in the wider market, this is not so for the ICT sector, which has been performing far better than average.
It is estimated that the IT market in Poland has a total value of US$ 3 billion while the telecommunications market is estimated at US$ 9.4 billion, and is therefore the largest in the Polish economy. Interestingly, between 1997 and 2000 hardware sales fell from 62% to almost 43%, and sales of services and software increased from 38% in 1997 to more than 57% in 2000. This trend has continued.
The Polish market continues to witness strong growth in the field of IT infrastructure services. With organizations compiling vast amounts of data that must be secured, stored, and accessed, such services are becoming a must for both users and IT services providers. As a result, Poland is seeing an increasingly sophisticated IT infrastructure.
Financial Software
Since the early 90s the banking sector has transformed beyond recognition. This has meant that banks and other financial organizations have been faced with a mountain of issues, all of which needed solving at the same time. Hence financial software came of age.
As the network of commercial banks rapidly increased, so did the bi-products; in 2001 ATMs numbered eight times more than four years before and the number of issued bankcards rose by 27%. To be competitive, Polish banks continue to invest heavily in automation and IT. Modernisation is a must.
Storage Management
Storage Management has become a high priority for many IT professionals in Central and East Europe. The amount of data is increasing exponentially and many organizations are struggling to stay abreast of capacity. Moreover, EU and NATO expansion, privatization, and the rise of SMEs are opening new lines of communication that could generate massive influxes of data.
Communications
The use of the Internet is growing. By the end of 2003 penetration was about 23% and is expected to rise to 39.5% by the end of 2005. Much of this is being driven by government initiatives.
IDC are predicting a rise in e-commerce spending in Central and Eastern Europe. Total spending is projected to reach US$4.4 billion this year. Of this total, B2B will account for 90% and will continue to constitute the bulk of e-commerce spending over the next five years. In 2006, the total ecommerce market should reach US$17.6 billion.
The key e-commerce markets in the region are the Czech Republic, Hungary, and Poland, which together constitute 90% of the market’s total value.
The mobile telephony market has three major phone network operators in Poland: Centertel, belonging to TP S.A. capital group, Polkomtel S.A. and Polska Telefonia Cyfrowa S.A. These three mobile phone networks account for more than 14 million customers, which is already more than the users of fixed telephone lines. It is predicted that by the end of 2005, every other Pole will have his or her own mobile phone. The number of Poles with mobile phones in 2003 reached the 14.17 million mark, and is projected to be as many as 17 million by the end of 2005.
Source: Pyramid Research; Economist Intelligence Unit
Foreign Investment
Poland is looked upon very favourably as a country to invest in. In the region, only Russia attracts more investment. With Germany as its major trading partner, Poland’s position as the most popular investment location in Central Europe is set to continue for the next five years. There are many reasons for this:
- For many suppliers of enterprise software, Poland is one of the most valuable markets in Central and Eastern Europe. Indeed the market in Poland is more than 50% larger than the market in Hungary and the Czech Republic combined
- Global players like IBM, Oracle, Microsoft and SAP have a presence there helping to develop the IT market alongside Polish computer companies like Optimus, Prokom, ComputerLand, Softbank and ComArch, all of which are listed on the Warsaw Stock Exchange
- English and German are widely used and spoken
- Its Central European position and easy Baltic access
- First country in Central and Eastern Europe to change from a planned to a market economy
- Low labour costs and highly skilled workforce
- The government is keen to attract foreign investment.
Government initiatives
The government in Poland has been developing policies and plans for the implementation of e-government. ePoland is an action plan for the development of an Information Society in Poland for the years 2001 through 2006, and it follows the approach of the eEurope+ action plan. The goal is to allow civilians and businesses to have an efficient and friendly way to fulfil a number of tasks required by the government. Schools and all educational institutions are obliged to provide the right of access to the Internet. Just as in the rest of Europe, citizens are being encouraged to access the Public Information System and to complete forms and applications online.
Why Poland
Poland therefore is certainly worth considering by companies looking for a “new” market. In addition to the reasons already stated, here are a few more:
- Its favourable geographic location between Europe and Asia
- One of the largest potential markets in eastern Europe
- The many Tech Parks and clusters promoting technical education
- Strong scientific centres throughout the country
- The determination to use technology in all sectors of society
- An established trade-relationship with Asian countries, specifically China
- Reliable economic growth
- The success of foreign companies already there particularly in financial services and telecommunications.
Indeed, in many respects, Poland represents a classic ground floor opportunity.
SSP is continuing to help companies grapple with the challenges that confront software companies in today’s markets and further details on our search services, consulting and other services can be found at www.sspltd.com
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Ansynova are a German Software company specialising in communications systems for the MVS/OS 390 marketplace. They have developed two products:
