1. consim European ICT Market and Successful Entry into these Markets Claus Traeger consim – Consulting for International Channel Marketing AL Invest Business Meetings – e-PME SIMO 2006 Madrid, Spain – November 7 th to 12 th

2. consim www.consim.de2 Market

3. consim www.consim.de3 World ICT Market by region Source: EITO 2006 / IDC 1,9 bi €

4. consim www.consim.de4 World ICT market growth by region Source: EITO 2006 / IDC

5. consim www.consim.de5 European ICT Market by country Source: EITO 2006 / IDC 660 bill €

6. consim www.consim.de6 EU* ICT market growth (1997 - 2007) Source: EITO 2006 / IDC(* excluding Cyprus and Malta)

7. consim www.consim.de7 European* ICT Market by product Value = € 659 bi HW (25%)  SW (75%) IT (47%)  TC (53%) 3.2% of GDP Source: EITO 2006 / IDC (*includes EU, N, CH, RO, BG)

8. consim www.consim.de8 WE ICT market growth by segment Source: EITO 2005 / IDC

9. consim www.consim.de9 European IT Market by country 312 bill € Source: EITO 2006 / IDC

10. consim www.consim.de10 European IT Market annual Growth, by country Source: EITO 2006 / IDC

11. consim www.consim.de11 European TC Market by country 348 bill € Source: EITO 2006 / IDC

12. consim www.consim.de12 European TC Market annual Growth, by country Source: EITO 2006 / IDC

13. consim www.consim.de13 Vertical ICT Markets in Europe Source: EITO 2006

14. consim www.consim.de14 Trends in Europe (SW) SW Growth: 5,5% (05) and 5,8% (06) Application solutions: ERP: upgrades, +efficiency manufacturing, finance, retail/wholesale, business services CRM, SCM: upgrades, new investments Gov., transport, utilities, healthcare, education, bus serv. SCM, SRM, PLM: +adoption in manufacturing CRM: in verticals – banking and insurance Industry specific applications: usable and attractive solutions finance and healthcare Regulatory compliance: manufacturing, healthcare and finance

15. consim www.consim.de15 Trends in Europe (SW) (cont.) System Software: Infrastructure: security, storage, resource mgt. Optimization and simplification of IT Infrastructure Business Intelligence: growth but saturation Software Tools: Web-enabling Open Source: important for flexibility and cost IT Services – growth rate 4,7%(05) and 5%(06) Outsourcing and Management Services More in Northern Europe than Central and Southern Europe Buyers: const-conscious Offshore competition: Eastern Europe

16. consim www.consim.de16 Spain (ICT Sector) Economic Growth: 3,4% (05) and 3,2% (06) Highest in the EU-Zone Benefit: IT spending ITC Growth: 6,6 (05) and 4,0 (05) IT Growth: 6,8% (05) and 6,7 (06) HW: recovery (PC, Laptop, Printers) SW: Sys. Infrastructure, Application Development, Deployment sw. Positive  Application SW: CRM, ERP, SCM, PLM IT Services: Outsourcing (competition) TC Growth: 6,5% (05) and 2,7% (06) Fixed tel. , DSL , Mobile tel. , G3/UMTS

17. consim www.consim.de17 Number of ICT companies in Germany by revenue Source: Statistisches Bundesamt, IfM, BITKOM 84,7% 11,3% 3,9% 0,2% % Co. Year 2000

18. consim www.consim.de18 Market share of ICT SME in Germany Source: Statistisches Bundesamt, IfM, BITKOM WZ 30 – Office technology, Hardware WZ 32 – Telecommunications WZ 72 – Databases, IT Services, Software

19. consim www.consim.de19 Number of ICT companies in Germany by number of employees Source: BVIT, Bonn Turnover by Employee: ± € 115.000 / year # of companies = 50.000 > 90% of the companies are SME

20. consim www.consim.de20 Internationalization of SME companies

21. consim www.consim.de21 SMESME Forms of Internationalization Direct Branch Company acquisition Indirect “Big Players” (e.g. IBM, SAP, MS) Local Partner ++-- 100% control Act like in home market Bigger margin Cost Human Resources Gain the market long cycle Good entry Image Low cost Have the opportunity Dependence Existing channels Will Low cost Lower Margin Distance to the costumer

22. consim www.consim.de22 Partnership Local partner: Local presence Market knowledge Clients Portfolio of Products/Solutions/Services Products: Complementary Competitors Another segment Other market segments (Eastern Europe, Magreb) Other technologies (Java, Web Services, Linux, SOA)

23. consim www.consim.de23 Conditions Conditions: Have Products/Services/Solutions Quality, International, Material Preparation for international markets: Investment of resources: Human and Financial Internal organization of the company Experience with indirect sales Reference clients Higher probability to succeed: Niche market / Focus Market knowledge: Characteristics of the market Competitors Competitive advantage

24. consim www.consim.de24 European Mentality in Business (1/2) Serious, formal Long time thinking  Long run partnership EU Markets = Mature Markets Patience; Gain confidence through competence Do what was agreed: in time! will be expected! Send and answer post E-mail, fax, post Everybody ‘speaks’ English / ‘Portuñol’

25. consim www.consim.de25 European Mentality in Business (2/2) Which are the most important factors for an European Company to choose a Business Partner: (Reseach done by an English business magazine among Managers in several European countries) 1. Reliability / Trust 2. References 3. Price 4. Technology

26. consim www.consim.de26 Presentation Presentation of your Product / Services: Know your partner’s intention ‘Personalize’ the Presentation (tec, sales,mgt, ceo) ‘Elevator Speech’: what is the product / service what for it is used | what problem it solves goal market | advantages for the end user

27. consim www.consim.de27 Successful Meetings & Good Business! Thank You! Claus Traeger consim Consulting for International Channel Marketing ctraeger@consim.de www.consim.de

28. consim www.consim.de28 consim – Consulting for International Channel Marketing Activities Find partners in Europe/L.A. according to companies’ needs For groups and/or individual companies Companies preparation for international markets Internationalization of the company Speeches, courses, coaching, monitoring For individual and/or group of companies Marketing support needed to enter the European markets Event participation (fairs, congress) Public Relations Publicity Market Research Additional support needed (legal, location, financing, etc.)

29. consim www.consim.de29 W.Europe Economic Background Gross Domestic Product (GDP): W.Europe = € 9.224 billion Germany = € 2.045 billion Source: Eurostat

30. consim www.consim.de30 General situation and Trends in the ICT sector in Europe Demands of ICT Economic Environment Trust of companies and investors Companies performance Trends in ICT Return on Investment (ROI) Subjects of costs and efficiency Optimization of existing infrastructure Returns on passed investments Source: EITO 2003 / IDC – update October

31. consim www.consim.de31 Negative aspects of the development Delay in investments in basic industries Unused Capacity Selective Demands ROI, ‘is the new technology really necessary’  business focus Price war

32. consim www.consim.de32 Positive aspects of the development IT in small and medium size enterprises (SME) Integration of internal systems Integration of external systems Outsourcing: Fix costs Variable costs ‘Core competence’ Security eEurope 2005 National Governs E-Health E-Education Basel II Agreement E-Business: Web interface of existing applications

33. consim www.consim.de33 Long run Trends Off-Shore services Price pressure Virtualization Pool of decentralized resources Performance, economy of scale, reliability, existing capacity Integration of applications Convergence of IT e TC Internet: Contend Management and paid content Mobile computing and Wireless Mobile solutions (WiFi, Bluetooth)