BMI View: Hungarian information technology (IT) spending is expected to show moderate growth in 2013, reaching HUF683bn, up from HUF636bn in total spending in 2012. Despite this projected growth, trading conditions remain challenging for IT vendors as household demand, business investment and government investment in IT products and services are restrained by deleveraging. Meanwhile, despite pent-up demand, the rapidly deteriorating crisis in the eurozone presents significant headwinds to business investment.
Computer Hardware Sales: HUF261bn in 2012 to HUF274bn in 2013, an increase of 5%. We expect a gradual contraction of the hardware market, as compared with relative increases to software and services. It also indicates signs of continued business caution in corporate and small and medium-sized enterprise (SME) segments.
Software Sales: HUF159bn in 2012 to HUF174bn in 2013, an increase of 9%. Large enterprises still account for about half of the spending on enterprise application solutions (EAS) in Hungary.
IT Services Sales: HUF216bn in 2012 to HUF236bn in 2013, an increase of 9%. The IT services market is set to expand as Hungarian organisations upgrade IT systems and expand outsourcing and cloud computing services to gain or maintain competitive advantage.
- Many IT spending segments are expected to remain relatively weak in 2013. Key IT verticals such as telecoms and finance have been hit by government crisis taxes. Retail is another segment that has been hit. Should the forint depreciate significantly further, consumers and private enterprises would be subject to considerable pressure, which in turn would depress spending.
- Telecoms operators reported solid growth in mobile broadband subscriptions in 2011 and this trend should help support sales of mobile connectivity devices such as tablets, which are bundled with service contracts. Credit is still tight throughout the economy, however, and businesses remain cautious given the particular debt problems affecting the Hungarian economy.
- Government IT spending will remain severely constrained by the fiscal situation, with the Fidesz-led administration committed to reining in spending in the face of fiscal constraints. However, the cloud computing opportunity is likely to spur continued development of the relatively small Hungarian datacentre market. The government typically runs its own datacentres, such as the one that was opened in Gyor, Western Hungary, which serves the Hungarian education system.