We recently spoke to Israel Garcia, Managing Director of BDS, who shared his views on the growing importance of software in our strategy and the market trends we need to keep a close eye on…
Econocom Stories: Why should Econocom pay more attention to software?
Israel Garcia: Recent analyses show that hardware-focused value-added resellers (VARs) are likely to have a difficult year in 2024. Those focused on software are better placed to navigate this period. Software budgets have historically been more resilient and are increasingly moving towards subscription models, creating more predictable and recurring revenues. For example, the average annual growth rate for large software companies has been 18% over the last five years, with hardware coming in at just 4%. This clearly indicates that software offers a more dynamic growth opportunity.
E-S: What are the key figures for the software market in Europe?
Israel Garcia: According to Statista, the European software market is expected to reach revenues of 157.30 billion dollars in 2024, with an average annual growth rate of 5.84% until 2028. The enterprise software sector will dominate this market, accounting for 65.38 billion dollars in 2024. This underlines the growing demand for robust, integrated software solutions in European companies.
E-S: How do these trends compare with the devices market?
Israel Garcia: According to Statista, the devices market is expected to generate 129.60 billion dollars in 2024, growing at an AAGR of 2.78% to 2028. In comparison, the faster growth in the software sector underlines the strategic importance for Econocom of focusing on software.
E-S: Which macroeconomic factors are driving growth in the software market?
Israel Garcia: The main drivers include the increasing digitisation of businesses, the rise of e-commerce, and the growing importance of data analysis. In general, every company wants to innovate, and these days innovation is driven by software in any field.
E-S: What trends are you seeing in the European software market?
Israel Garcia: We’re seeing strong demand for user-friendly, efficient and customisable software, often cloud-based for greater flexibility and scalability. AI and machine learning technologies are also gaining in popularity. These technologies enable tasks to be automated, improve efficiency and enhance the customer experience. Open-source software is also becoming more common in Europe. It offers flexibility and cost-effectiveness.
E-S: How do these trends relate to Econocom’s new strategic plan and core businesses?
Israel Garcia: Our new strategic plan is based on the idea of creating end-to-end solutions in key areas such as the workplace, infrastructure and audiovisual. On the one hand, software is at the heart of these end-to-end solutions, bringing together hardware, services, users and information. On the other hand, businesses need a complete package of design, consultancy, deployment, operation and financing services to unleash the innovation and transformation potential of software. Econocom can provide this complete set of services, simplifying and accelerating innovation for our customers.
E-S: So what’s Econocom’s role in the software market?
Israel Garcia: Econocom plays three main roles in the software market. Firstly, we’re software resellers, which means that we supply a wide range of software products from various suppliers to meet our customers’ needs. These days over 200 million euros of our business volume comes from the resale of software. Secondly, we’re software integrators. We help our customers to design, deploy and configure the software solutions they choose. And thirdly (and most importantly) we’re experts in supporting our customers’ use of software to drive innovation and change. This means that we offer value-added services such as training, maintenance and operation of software solutions to help our customers excel in the areas of workplace, infrastructure and audiovisual. Investing in software means that we’re committed to strengthening our market position and offering increasingly relevant solutions to our customers.
E-S: Who are Econocom’s main partners in this market?
Israel Garcia: They are mainly software publishers who are pioneers in our strategic areas. Microsoft is a leader in all these areas and so is of course very important to us and represents a strategic alliance which we’ll continue to develop in the future. But there are also other pioneering companies in their respective market segments, such as Veeam in business continuity, ServiceNow in service management and governance, Nexthink in digital employee experience and VMWare in virtualisation. We also work with a wide range of alternative and niche players in the various segments in order to respond effectively to all our customers’ needs. These partners enable us to offer high-quality solutions which meet the expectations of our customers in various sectors and regions.