KeysFin:The Romanian software industry to achieve over 8 billion Euros this year

The software industry in Romania will grow by approximately 12.5% in 2020, reaching a turnover of approximately 8.2 billion euros, according to estimates by KeysFin specialists. However, growth is slower than in 2019, when the sector had a turnover of 7.3 billion euros, almost 20% more than in 2018 and over 69% compared to 2015.

The software industry in Romania remains at the top of key industries for the country’s economy, with the share of the entire IT&C sector in gross domestic product being 6.1% in 2019 and 7.1% in the first half of 2020.

“We believe that innovation should is the basis of Romania’s sustainable development, and the software industry is the mainstay of local innovation. That is why we have reached the fourth consecutive edition of the study dedicated to the software industry in Romania, probably one of the most complex and detailed analyzes dedicated to local IT, through which we always identify market trends and analyze the most important business indicators. Thus, for 2020, it is already clear to us that, paradoxically, the pandemic represented an opportunity for those companies that came up with digitization solutions suitable for the needs of many industries, obtaining results beyond expectations” said Roxana Popescu, Managing Director of KeysFin, one from the most important providers of business information solutions in Romania.

In 2019, more than 24,000 software companies were active in Romania, 6.2% more than in 2018 and 38.9% more than in 2015, of which: 22,600 micro, 1,100 small companies, 328 companies medium and 20 large companies. The largest share of turnover was generated by medium-sized companies, with 37.4% of the total, followed by corporations with 25.7%, small companies with 19.8% and micro-enterprises with 17.1%. In fact, the software industry is otherwise one of the most balanced local industries in terms of distribution of turnover by type of company, the difference of maximum 20 percentage points between categories being relatively minor compared to other key sectors in our country.

The largest Romanian software company in Romania is still ORACLE ROMANIA, with a turnover of over 200 million euros (2.7% of the total).

The ranking is completed by IBM ROMANIA (over 197 million euros – 2.6% of the total), ERICSSON TELECOMMUNICATIONS ROMANIA (over 161.3 million euros, 2.2% of the total), BITDEFENDER (approximately 140.5 million euros) and ENDAVA ROMANIA (approximately 135.5 million euros).

The 10 largest companies in the industry accumulated a turnover of approximately 1.3 billion euros, representing 17.6% of the total. And in terms of profitability, the results are positive: net profit increased by 27.3% compared to 2018 and by over 110% compared to 2015, reaching over 1 billion euros in 2019. Moreover, out of the 24,000 companies analyzed , 16,000 (67%) were profitable, approximately 6,000 (25%) were at a loss, and the rest had a zero result in 2019. Also, the number of insolvencies decreased by over 25% compared to 2018, to 56 insolvencies in 2019. On the first place in the top of the most profitable players in the field is in 2019 SAP ROMANIA, with a net profit of 36.4 million euros, but lower than in 2018 when it was over 40 million (in the national currency the decrease was below 8. The 5 most profitable companies had in 2019 a cumulative net profit of 104.2 million euros, respectively 9.7% of the total.

OVER 130,000 ROMANIANS WORK IN SOFTWARE

Number number of employees in the software industry has increased by 43.3% in the last 5 years, to 130 thousand in 20 19. However, according to Eurostat data this year, Romania ranks first in the EU in the shortage of employees in this field, the need being estimated at several tens of thousands of specialists, according to professional associations. Of course, the race to attract IT employees, and especially the best ones, has led to an increase in the average cost per employee by almost 45% in the last 5 years and by 9% compared to 2018, to 25,500 euros in 2019. However however, Romanian IT specialists also have excellent productivity: productivity per employee has increased by over 18% in the last 5 years and over 11% compared to 2018, reaching an average level of 56,200 euros / employee in 2019.

In the top of the most large local employers in software are ORACLE ROMANIA, on the first place, with 3,400 employees in 2019, being followed by IBM ROMANIA, with 3,300 employees, ENDAVA ROMANIA, with 2,600 employees, ERICSSON TELECOMMUNICATIONS ROMANIA, with 2,600 of employees, and ATOS IT SOLUTIONS AND SERVICES, with 2,200 employees.

In total, the top 5 local employers accounted for 10.8% of the total local workforce in the software market. As for the distribution of employers according to the company’s turnover, experts noted that the highest concentration of labor was had by medium-sized companies, with 40% of the total, followed by multinationals with 24%.

Bucharest continues to attract the largest local software companies, the turnover of companies in this sector with headquarters in the Capital being 4.3 billion euros (58.7% of the total). Cluj County is in second place in terms of turnover, with 1.1 billion euros in 2019 (15.5% of the total), followed by Timiș, with 347.7 million euros (4.8 %), Iași, with 341.4 million euros (4.7%), and Brașov, with 185.3 million euros (2.5%). In total, the first 5 counties account for 86% of the turnover of the local software industry.

Photo credentials: Oracle Romania