Editorials

Neelie Kroes

This latest Truffle 100 report shows that Europe's software sector has had yet another exciting year.Most encouragingly, even in these times of economic uncertainty, the sector has clearly remained a reliable pillar underpinning Europe's economic growth. Not only has the market grown by about 10% year on year but,more importantly, vendors are planning to increase headcounts and R&D investments. These are exactly the right ingredients to sustain the industry's momentum in years to come. The importance of the industry, however, is not just economic: because innovation in software and ICT services also helps address Europe's societal challenges, creating amore equitable and sustainable future for citizens.

Still, a lot remains to be done to maximise the potential of Europe's software industry.We have great ideas, with products pouring out from both established players and the next generation. However we need to go further to help newcomers develop into high growth companies. In particular, we need to overcome the barriers which stand in the way of a European digital single market.

The European Commission is working hard to boost innovation. Our Digital Agenda for Europe, now one year old, aims to improve the environment for ICT investment in Europe.

The Agenda is an action plan to catalyse development, fuel demand and power supply-side investments in ICT. It will ensure roll-out of high speed broadband infrastructure, strengthen the digital singlemarket, encourage venture capital and other financial support, and promote more open standards and interoperability. It also seeks to develop the public markets where ICT can support policy challenges, like energy efficiency, health care and smart mobility.

Alongside that, Horizon 2020, the Commission's new research and innovation programme for 2014-2020, will make the framework for R&D and innovation support more flexible and integrated; and the Commission's proposed infrastructure fund, the "Connecting Europe Facility", will invest 9.2 billion euros in the deployment of broadband network and digital services infrastructure.

You can depend on me to domy share in creating the best environment for Europe's software industry to thrive. I hope we can count on the support and entrepreneurship of the Truffle 100's current and future members to achieve these goals.

Neelie Kroes
European Commissioner for the Digital Agenda

Bernard-Louis Roques

We are pleased to present the 6th edition of the Truffle 100 Europe,which once again highlights the impressive dynamism and exceptional resilience of the European software industry. Software vendors are able to bounce back quickly (with year-on-year growth of 14%) and generate profits (€3.7 billion last year),while investing heavily in R&D (€4.4 billion). With over 55,000 highly qualified R&D jobs, they constitute a strategic industry that is absolutely critical for employment & GDP growth in Europe. With cloud computing and "software as a service" (SAAS) bound to radically transformthe industry in the coming years, Europe's software vendors are on the verge of a major paradigm shift and deserve a lot more attention. On-going changes in business models mean that this is a highly critical period for vendors. European governments must accentuate supporting measures, so that more money is channelled into R&D and thousands of added-value jobs are created. The Truffle 100 reveals that software vendors are clamouring for the implementation of R&D tax incentives (with the effect of leveraging investment in R&D), a European Small Business Act (whereby a fraction of public procurement is systematically allocated to small businesses) and publiclyfunded R&D programmes with facilitated access and simplified procedures for SMEs. I am convinced that Europe's industrial future, economic growth and technological independence rely on its ability to develop a solid, sustainable software industry.

I wish to thank Commissioner Kroes, CXP and IDC for their commitment to and support for the Truffle 100.

Bernard-Louis Roques
General Partner & co-Founder, Truffle Capital

Franck Cohen

This latest edition of the Truffle 100 arrives in turbulent economic times where Europe has to overcome a strong crisis. In this volatile market, the ranking of the top 100 European software vendors underlines the dynamism of the software industry. It also demonstrates how important the software industry is to Europe's future to ensure sustainable growth in a highly competitive global economy.

In this ever-changing environment, innovation is crucial to remain competitive while technology is the foundation for sustainable growth. Today, software companies are the ones that drive innovation across all industries and their goal is to increase headcount and R&D investments in 2012.

To drive this innovation, software vendors count on public support through R&D tax breaks & public R&D programs. With that said, we strongly encourage the European Union to develop a software industry policy with pan-European R&D projects.

The demand for sustainable business solutions will continue to increase to reach the right balance between economic and environmental demands. Companies are always looking for a better user interface to transform and improve their end-to-end business processes in a sustainable fashion.

In light of customer expectations that are constantly changing, our industry has to manage a significant paradigm shift. The appetite for technology is astonishing because technology together with connectivity empowers people to connect across the globe, share their views and ideas, and do business differently. This is the era of social media where users of online social and business communities are collaborating across company boundaries at amazing speeds via digital environments using their smart phones. This allows them to be more efficient, more productive, and make the right decisions in less time. This paradigm shift also includes a new way to consume software with cloud computing and On Demand solutions.

SAP is again at the forefront of this major shift in the IT sector, away from commoditized hardware and toward renewed investment in differentiating IT: business software that drives efficiency, agility and growth.

SAP business software, unwired by mobile apps and fueled by in-memory and advanced analytics, is reshaping the business IT world with innovation that drives value and growth for customers, partners, and entire markets. With state-of-the-art technologies that offer speed, mobility, and insights - SAP allows customers to truly put their Business in the Moment. From the boardroom to front lines of global markets across all industries, SAP helps companies better understand and more quickly act upon customer demands, unexpected events and new opportunities.

We are lucky to be part of the software industry where the rules of the game are constantly changing thus allowing for constant growth opportunities.

Franck Cohen
President of Europe, Middle East & Africa at SAP

Karl-Heinz Streibich

This latest edition of the Truffle 100 is being published in times of economic uncertainty with many economies failing to return to sustainable growth after the worst global recession in many decades. While the depth and duration of the current economic turbulence cannot be foreseen, there is one significant, positive aspect. That is, that the European software industrywill once again prove to be an economic stimulus in terms of growth, of increased high-value employment and as a driver of innovation across all industries.

The Truffle 100 - 2011 supports this conclusion. The annual growth rate of Europe's top 100 software companies in 2010 was more than five times that of the total European Union economy. This continues the resilience the European software industry demonstrated during the last recession. Secondly the software industry will increase Research and Development investments and employment over the coming year.

This is a cause for much optimism. The commitment of the European software industry to growth and to driving innovation throughout the economy fully demonstrates the contribution it can make to building a stronger Europe.

The Truffle report also highlights the industry-wide call for public-private partnerships to further drive expansion through joint R&D programs and lighthouse projects. In Germany we have established such partnerships in the Software Cluster and the House of IT. These have been important steps in strengthening the software industry in Germany.

I can fully endorse this call at a European level.

Karl-Heinz Streibich
CEO, Software AG

Laurent Calot

Although Europe is going through a period of major economic turbulence, the software industry has shown itself to be a reliable, federating asset. After monitoring trends in the software sector for almost 40 years and having collaborated with Truffle Capital since the first edition of the Truffle 100, we are still impressed by the industry's eternally renewed dynamism and inventiveness year after year.

Laurent Calot
CEO, CXP Group

Bo Lykkegaard

In 2010 and 2011, we saw the European software industry undergo continuing globalization and specialization. These two aspects are closely interconnected for European ISVs, since a high degree of specialization is needed for global competitiveness. We have seen ISVs divest unrelated software businesses and/or acquire well-matched companies to deepen their functional capabilities. HP's acquisition of UK-based Autonomy is a loss to the European software industry but major acquisitions in the other direction have also happened, such as Sweden-based Hexagon's $2.1-billion acquisition of US-based Intergraph and SAP's $5.8 billion acquisition of Sybase in 2010. We find that European ISVs have particular strengths in horizontal business applications, engineering applications, and industry-specific applications and we believe that these areas will continue to be strongholds for Europe's software industry.

Bo Lykkegaard
Program Director - European Enterprise Applications, IDC

Figures

• Software revenues 30.9 bn€ (up from 27.1 bn€ last year)

  Total revenues for the Truffle 100 are 49.4 bn€

  63 % of revenues come from the top 25 vendors(79% last year)

   

  % Revenues	2009	2010
  SAP	40 %	31 %
  TOP 3	50 %	40 %
  TOP 5	56 %	44 %
  TOP 10	65 %	52 %
  TOP 50	91 %	84 %

  
  

  

  49 vendors have revenues > 100 m€
  they account for 89.2 % of Truffle 100 revenues

  

  85 vendors have revenues > 50 m€
  they account for 97.8 % of Truffle 100 revenues

  

  All Truffle 100 have revenues > 25 m€

  
  
• World-class national champions

  Vendor	Country	Revenues (m€)	% of Truffle 100
  SAP	DE	12 337	39.8 %
  Dassault Systemes	FR	1 564	5.0 %
  Sage	UK	1 543	5.0 %
  Software AG	DE	919	3.0 %
  DATEV	DE	685	2.2 %

• Fierce global competition

  

• Growth

  … 14 % growth
  

  Revenues growth year on year:+14 %

  
  
  
  
• Strong exposition to capital markets
   

  Public or non-public	#	Software Revenues (€M)	% of Truffle 100	R&D Spend (€M)	% of Truffle 100
  Publicly traded	65	26 176	84.5 %	3 803	85.8 %
  Private	35	4 810	15.5 %	630	14.2 %
  Total	100	30 985	100 %	4 433	100 %

  
  
• Profits
  
  

  Profits on the rise

  5.8 bn€ aggregated net profits,
  up from 3.7 bn€ last year

  Profits bn€	2006	2007	2008	2009	2010
  	2.8	3.2	3.6	3.7	5.8

  
  

  	% of revenues	% of profits
  	Truffle 100	2010	2009	2008	2007
  SAP	40%	31%	46%	51%	60%
  TOP 3	50%	40%	58%	62%	73%
  TOP 5	55%	44%	66%	67%	75%
  TOP 10	36%	52%	66%	67%	75%
  TOP 50	90%	84%	91%	92%	95%

  Big vendors more profitable
  Small vendors catching up

  
  

  Profitability m€	2010	% of revenues	2009
  TOP 3	2.386	15.2 %	16.0 %
  TOP 50	4.952	12.2 %	10.7 %
  BOTTOM 50	0.940	10.6 %	6.8 %
  BOTTOM 25	0.228	13.4 %	8.6 %

• Breakdown by country
  
  

  Breakdown by country

  Countries	Software revenues (€ millions)	% of total	# Software companies
  Germany	15 578	50.3%	16
  UK	5 752	18.6%	24
  France	3 482	11.2%	18
  Netherlands	1 093	3.5%	7
  Sweden	977	3.2%	4
  Norway	436	1.4%	5
  Finland	661	2.1%	2
  Italy	522	1.7%	8
  Switzerland	881	2.8%	7
  Belgium	511	1.6%	1
  Poland	562	1.8%	4
  Denmark	185	0.6%	1
  Czech Republic	166	0.5%	1
  Spain	117	0.4%	1
  Austria	62	0.2%	1

~ 4.4 bn€ invested in R&D

55 000 R&D jobs

Major M&A transactions

R&D investments trend for 2012 ?

Headcount in 2012

Expected growth rate for 2012 ?

Main technological trends for 2012 ?

Measures: Tax breaks and SBA needed

What measures should be adopted to serve the cause of european software industry?
(multiple answers possible)

European software vendors ranking 2011

Rank	Company	Public ?	Country of HQ location	Software revenues 2010 (m€)	Total revenues 2010 (m€)	R&D employees 2010
1	SAP		DE	12 336.7	12 464.0	14 991
2	Dassault Systemes		FR	1 563.8	1 563.8	3 700
3	Sage		UK	1 542.9	1 688.4	*2 076
4	Software AG		DE	919.2	1 119.5	850
5	DATEV		DE	684.6	698.6	*1 250
6	Autonomy		UK	657.0	657.0	*563
7	Asseco		PL	516.4	808.5	*2 047
8	SWIFT		BE	511.1	538.0	*452
9	Wincor Nixdorf		DE	461.6	2 239.0	*372
10	Misys		UK	431.2	431.2	*1 102
11	Unit4		NL	421.7	421.7	1 150
12	Sopra Group / Axway		FR	354.7	1 169.9	1 000
13	Temenos Group		CH	338.2	338.2	*617
14	Swisslog		CH	324.9	444.3	*511
15	Micro Focus		UK	322.7	329.2	*300
16	Compugroup Holding		DE	312.4	312.4	*900
17	Murex		FR	310.0	310.0	255
18	Invensys		UK	279.2	2 897.1	1 328
19	NIS (Northgate Information Solutions)		UK	269.0	780.9	*760
20	IFS		SE	264.0	270.8	524
21	Acision		UK	260.4	434.1	486
22	Sophos		UK	259.4	259.4	*600
23	Fidessa		UK	228.8	305.7	*300
24	Exact		NL	228.2	228.2	456
25	Cegid		FR	218.0	249.6	537
26	Visma		NO	208.2	520.6	*720
27	Zucchetti		IT	205.0	237.0	*380
28	Reply		IT	202.8	384.2	*552
29	AVEVA Group		UK	187.2	187.2	248
30	SimCorp		DK	185.4	185.4	*283
31	Qliktech		SE	171.0	171.0	96
32	AVG Technologies		CZ	166.1	166.1	*150
33	Hexagon		SE	165.6	1 487.1	*1 300
34	Civica		UK	164.8	196.9	*310
35	Kofax		UK	162.9	258.5	457
36	Gemalto		NL	152.0	1 905.6	*1 470
37	Nemetschek		DE	149.3	149.7	484
38	RM		UK	147.9	443.0	*280
39	PSI		DE	143.5	158.7	*284
40	Torex		UK	137.6	217.5	*240
41	Linedata Services		FR	136.2	136.2	278
42	Digia		FI	130.8	130.8	*230
43	F-Secure Corp.		FI	130.1	130.1	339
44	GAD		DE	129.0	645.0	*255
45	Panda Security		SP	116.5	116.5	*212
46	Sword		FR	111.6	185.3	*182
47	Centric		NL	111.1	1 225.7	*140
48	IBS		SE	104.8	136.2	209
49	Affecto		FI	103.6	114.1	*142
50	Lumesse		UK	95.6	95.6	*160
51	IRIS Software		UK	93.2	93.2	*138
52	SDL International		UK	92.5	237.2	*311
53	BasWare		FI	90.7	103.1	239
54	GFI Informatique		FR	90.0	657.9	160
55	ACS (Advanced Computer Software)		UK	88.3	111.2	*170
56	Avanquest Software		FR	88.2	88.2	150
57	Avaloq		CH	86.7	86.7	*200
58	Opera Software		NO	86.5	86.5	*119
59	ESI Group		FR	84.2	84.2	240
60	Aditro		SE	83.8	167.0	*320
61	ORC Software		SE	83.1	102.3	*87
62	Wolters Kluwer (CCH & A3 Software)		NL	82.7	3 556.0	*365
63	Vizrt		NO	79.7	79.7	*117
64	ERI Bancaire		CH	79.5	79.5	*106
65	Comptel		FI	77.9	77.9	177
66	ISAGRI		FR	75.0	75.0	200
67	Cegedim		FR	74.0	74.0	150
68	Berger-Levrault		FR	74.0	95.0	205
69	Anite		UK	72.0	109.2	*117
70	LHS AG (part of Ericsson)		DE	71.6	71.6	*213
71	Aldata Solutions		FI	70.2	73.1	103
72	Kewill Systems		UK	69.9	69.9	*136
73	Gruppo Engineering		IT	69.8	738.3	324
74	Generix Group		FR	69.0	69.0	160
75	Mensch und Maschine		DE	67.9	195.6	*150
76	Personal & Informatik		DE	66.6	69.1	133
77	UC4		AT	62.0	62.0	*110
78	Mamut		NO	61.3	61.3	*100
79	ReadSoft		SE	60.5	64.8	*115
80	Tekla		FI	57.8	57.8	*92
81	SSP Holding		UK	57.4	82.0	*120
82	Lectra		FR	53.5	190.3	210
83	CSB-System		DE	52.0	52.0	*80
84	Elca		CH	51.3	55.5	65
85	AFAS ERP Software		NL	50.2	50.2	73
86	HR Access		FR	49.2	69.6	*150
87	proALPHA		DE	48.5	49.3	*120
88	Beta Systems Software		DE	47.6	47.6	113
89	Cordys		NL	47.2	47.2	*120
90	Smartstream		UK	46.4	62.9	*90
91	Comarch		PL	45.9	191.1	1 100
92	CAD It		IT	44.6	52.5	*122
93	Hogia Group		SE	44.2	44.2	*150
94	Groupe SAB		FR	44.2	44.2	320
95	Schleupen		DE	44.1	55.1	*70
96	Fiducial Informatique		FR	43.4	54.6	122
97	COR&FJA		DE	43.2	116.2	*150
98	Alterian		UK	43.1	43.1	*110
99	InfoVista		FR	43.0	43.0	77
100	Delcam		UK	42.7	42.7	*170

(*) R&D headcount 2010 estimated
Software revenues: software revenues + related services