BMI View: We forecast total Israeli IT market spending will increase at a CAGR of 4.5 % throughout 2016-2020 to a total of ILS 27.7 bn. This is a slightly downgraded outlook in Q416 as a result of a weaker economic outlook. However, o ur core scenario remains in place, and we maintain that perform ance will strengthen from 2017. This is particularly so in the hardware segment , where a combination of product cycles and shekel depreciation resulted in a marked growth slowdown throughout 2014-2016. S oftware and IT services are forecast to outperform through the strong growth in the cloud computing services and IoT services markets .
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IT hardware sales will expand from ILS6.29bn in 2016 to ILS6.66bn in 2020, corresponding to a compound annual growth rate (CAGR) of 1.4%. Volume growth potential is limited by maturity, and smartphones could cannibalise replacement spending, but our core scenario is for shekel appreciation to support the market throughout the medium term.
Software sales will increase from ILS5.92bn in 2016 to ILS7.05bn in 2020, a CAGR of 4.4%. Cloud availability expected to deepen the market, but the positive impact will be tempered by the extent to which cloud competition results in price erosion.
IT services will the outperforming segment of the sector, and is forecast to grow from ILS11.01bn in 2016 to ILS13.94bn in 2020, at a CAGR of 6.1%. Demand for cloud computing, Internet of Things (IoT) and outsourcing services expected to be robust.
|Software And Services To Outperform|
|Spending Growth By Segment (2013-2019)|
|f = BMI forecast. Source: BMI|
The Israel Information Technology Report features BMI Research's market assessment and independent forecasts covering personal computers and software; semi-conductors, memory chips, integrated circuits and general components; the internet and IT solutions. It analyses analyses regulatory changes (licensing, customs and intellectual property protection) and competitive landscapes comparing IT companies by products, sales, market share, investments, projects and expansion strategies.
BMI's Israel Information Technology Report provides industry professionals and strategists, corporate analysts, IT associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the IT industry in Israel.
- Benchmark BMI's independent IT Industry forecasts for Israel to test other views - a key input for successful budgetary and strategic business planning in the Israeli IT market.
- Target business opportunities and risks in Israel's IT sector through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Israel.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering IT, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the IT sector and within the broader telecommunications, political, economic and business environment.
BMI Industry Forecast
Historic data series (2010-2013) and forecasts to end-2019 for all key industry and economic indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
- IT Sector: Industry value (USDmn); IT sector contribution to GDP (%); value of hardware, software and services industry (USDmn); PC, peripherals and software imports and exports (USDmn); PC, peripherals and software sales (USDmn); number of PCs (‘000); PCs per 100 inhabitants; internet users (‘000); internet users per 100 inhabitants; broadband subscribers (‘000); broadband subscribers per 100 inhabitants.
- Economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).
Information Technology Risk Reward Index
BMI’s Risk Reward Indices provide technology manufacturers, service providers, and IT vendors/leasing agents looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Country Market Overview
Structure, size and value of the industry sectors including hardware, software and services; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments and government authority.
BMI Macroeconomic Forecast
BMI forecasts for all headline macroeconomic indicators to end-2019 including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Full analysis of the competitive landscape within the hardware, software and services sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Cross-border analysis of country markets in the region, commenting on IT penetration (PC and internet) and market growth drivers (IT market size and IT market compound growth).
The information Technology Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.