BMI View: Israel's vibrant ICT start-up community and highly skilled tech workers have continued to attract high levels of investment in 2015, following a record breaking year in 2014 . We expect this trend to continue, as global IT firms look to leverage innovative solutions emerging from Israel's start-up ecosystem to accelerate their transition towards high-growth software and services such as cloud computing and big data analytics.
Nevertheless , because of the comparatively high penetration of IT products and services, as well as its small population, Israel's IT market is expected to grow more slowly than most others in the region. Given it s geopolitical location and the uptick in violence in the region in 2014 and 2015 , we expect spending on cyber security to be a key driver of growth, contributing to software and services' increasing share of IT sales over the five years to 2019 .
Headline Expenditure Projections
Computer Hardware Sales: Forecast to reach ILS9.4bn in 2015, up from ILS9.225bn in 2014. We expect growth to accelerate in 2015, driven by the full launch of 4G mobile networks and ongoing upgrades to the Windows 8 and Windows 10 operating systems.
Software Sales: ILS6.414bn in 2015, up 9.3% year-on-year (y-o-y) from ILS5.867bn in 2014. Enterprise software spending will be the main growth driver as device and data proliferation will result in increased spending on customer relationship management (CRM), databases and business intelligence.
IT Services Sales: We expect IT services sales will continue to outperform the rest of the IT market, reaching ILS8.793bn in 2015, up from ILS8.263bn in 2014. Cyber security services will outperform in terms of growth, but it will be stable sectors such as government and defence that continue to account for the majority of spending.
Key Trends And Developments
Data from Israel's Office of the Chief Scientist (OCS) show that the high-tech sector declined as a proportion of GDP between 2007 and...
The Israel Information Technology Report features Business Monitor International (BMI)'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 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.