Editorials

Bernard-Louis Roques

General Partner
& co-Founder,
Truffle Capital

It's that time of year again, when we produce the Truffle 100, search and share the data, an opportunity to reconnect with the stakeholders of the industry. I guess the Truffle 100 has found its place in the European business environment and brings its contribution to the software ecosystem.

You are more than 100,000 to use this free research as a tool, a barometer, a source of data to increase your knowledge and enrich your vision of the European software market. Truffle Capital, CXP and IDC are happy to provide you this service, with the support of the European commission and ESSEC Business School.

With €44 billion in aggregated revenues, 67,000 R&D jobs, 5.2% growth and €7 billion invested into research, the software vendors have become a major component of the European economy and the most important contributor to its innovation.

On the eve of major paradigm changes driven by mobility, cloud computing, applications, they are going through challenging but thrilling transformations. We're experiencing one of the most exiting chapters of the industry's history, and remain reasonably optimistic, betting on the proven resilience and innovative agility outlined year after year in all the Truffle 100 search

Laurent Calot

CEO,
CXP Group

We have entered the digital age and there is no turning back. Although not all businesses have made the transition yet, there is now real awareness, shared by everyone, of digital considerations. In sectors such as distribution and finance and in the B2C sector, digital technologies are already revolutionising the way in which businesses interact with their customers. Digitalisation is transforming the value chains of businesses, their business models and their ecosystems. Adopting and making optimum use of technologies, such as cloud computing, mobile technologies, analytics or the Internet of Things, make new business objectives possible. Digitalisation throws the doors wide open to innovation and new projects.

To meet these potentially huge challenges, the software industry is adapting; the European Truffle listing is proof of this. The new solutions offered integrate SMAC (Social, Mobile, Analytics, Cloud) technologies to meet the demand of business users who now require customer-oriented, web-designed tools, access to mobile applications, agile management tools, visual and easy-to-interpret dashboards, and analysis functions capable of deriving value from increasingly large and less structured sets of data. Software publishers have realised that cloud infrastructures and SaaS applications now represent the strongest market driver (with growth rates of between 30% and 40%) and are revising their business models to base their growth on recurring turnover. Finally, software vendors, integrators, service companies and cloud brokers are working to provide a high value-added, business-oriented "service" dimension which will make the difference, boost the competitiveness of businesses and accelerate their modernisation.

Bo Lykkegaard

Associate Vice
President, European
Software Research,
IDC

2014 was a year of solid growth overall for Europe's software industry. It was also a year of change, as an increasing proportion of top 100 vendors made significant bets on new cloud businesses to complement their traditional software businesses. IDC estimates that just under half of the top 100 software providers have built or acquires significant cloud offerings today. For those vendors, cloud has moved beyond the trial-and-error state into mainstream business. The ones that have moved first are typically vendors of horizontal business applications, such as marketing, CRM, Human Capital Management, accounting, etc. Three top vendors, SAP, Dassault, and Sage, have each made significant advances in cloud computing.

The question that arise is then: What about the vendors that have not yet made a significant bet in cloud. IDC research shows that different software areas have different level of cloud maturity and hence different urgency of business model transformation. Many industry-specific packaged software applications are replacing custom software or manual processes. They are not at a level of standardization to warrant a software-as-a-service approach. However, IDC believes that by 2020 cloud computing will cover the majority of IT workloads, even in large enterprises. Consequently, all software vendors in Europe must consider the cloud computing model at some point in their planning horizon.

The transition to cloud and major disruptive computing trends, such as mobile applications, real-time analytics, and internet of things, is complex and costly and carries a risk of cannibalizing existing revenue streams from software licenses and maintenance contracts. However, staying abreast of disruptive technology developments is vital for the longer-term sustainability of the European software industry and strong linked to R&D investments and access to capital. For those making the leap, the future holds promises and growth opportunities.

Karl-Heinz Streibich

Chief Executive Officer,
Software AG

Digitization is changing everything. It is impacting every industry and opening huge new business opportunities for any enterprise that reacts quickly enough with an imaginative and innovative digital strategy. It is having a positive impact on the lives of billions of citizens worldwide through better managing health services to streamlining the use of global resources.

At a national economic level the impact is startling. According to the World Economic Forum , a 10 percentage point increase in a country’s digitization index can result in a 0.75% rise in GDP and a 1.02% drop in unemployment. More tangibly, IDC forecasts that the worldwide market for Internet of Things solutions will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020. This is simply the largest growth phase in history.

The growth potential for the Industrial Internet should be music to European ears. It is imperative that Europe leverages its unequalled engineering heritage to spearhead the Industrial Internet. Europe must ensure that it makes an impact in this digital revolution that reflects and builds on its manufacturing economic might.

Digitization is changing everything. Europe has to be at the forefront of this change.

• Revenues

  44 €bn software revenues

  All Truffle have revenues > 41.7 €m

  
  

  % Revenues	2010	2011	2012	2013	2014
  SAP	31	38	39	39	39
  TOP 3	40	46	47	47	47
  TOP 5	44	53	53	53	53
  TOP 10	52	63	63	63	63
  TOP 50	84	90	90	90	91

  
  
  
  
• Profits
  
  
  
  

  	Profits
  	2008	2009	2010	2011	2012	2013	2014	% of revenues T 100
  SAP	51	46	31	52	48	52	51	39
  TOP 3	62	58	40	60	58	59	60	47
  TOP 5	67	66	44	66	65	67	68	53
  TOP 10	67	66	52	79	79	79	80	63
  TOP 50	92	91	84	96	95	97	97	91

  
  

  The bigger, the more profitable

  Profitability	% of revenues				Profits €M 2013
  	2010	2011	2012	2013	2014
  TOP 3	15.2	22.9	17.0	18.5	17.7	3804
  TOP 25			12.0	12.9	11.7	5301
  TOP 50	12.2	13.5	10.8	12.1	11.1	6174
  BOTTOM 50	10.6	5.2	4.6	2.6	3.2	201
  BOTTOM 25	13.4	6.9	6.8	7.9	2.3	40

  
  

  Profit rate

  
  

  Publicly traded

  
  
• Breakdown by country

  Top five countries in Europe represent 53% revenues

  
  
  

  Country	2011	2012	SW revenues (€M) 2013	2014	% of total	# SW companies
  Germany	18 145.7	20 328.6	21 046.4	22 139.7	49.8	17
  UK	5 497.3	5 994.6	5 406.8	5 524.1	12.4	19
  France	4 040.9	4 348.9	5 028.5	5 433.0	12.2	22
  Sweden	2 163.5	2 326.5	2 392.0	2 434.5	5.5	7
  Netherlands	2 187.9	2 236.2	2 103.7	2 223.9	5.0	7
  Poland	1 005.5	1 152.4	1 229.1	1 384.8	3.1	2
  Switzerland	1 110.8	1 208.2	1 174.6	1 319.9	3.0	5
  Norway	486.2	544.8	639.2	688.5	1.5	3
  Italy	516.5	557.3	625.8	687.0	1.5	3
  Belgium	530.1	594.9	580.2	596.8	1.3	1
  Finland	618.1	625.0	656.6	568.3	1.3	5
  Czech Republic	248.5	361.9	375.9	444.7	1.0	2
  Denmark	194.4	287.0	303.0	353.5	0.8	2
  Slovakia	149.1	256.4	301.4	328.8	0.7	1
  Austria	116.4	126.3	120.3	162.7	0.4	2
  Spain	176.7	198.4	189.2	129.2	0.3	2
  Total	37 187.7	41 147.7	42 172.6	44 419.3	100.%	100

  
  

  World-class national champions

  Vendor	Country	Revenues (€M)	% of T100
  SAP	DE	17 244	38.8
  Dassault Systemes	FR	2 079	4.7
  Sage	UK	1 540	3.5
  Hexagon	SE	1 442	3.2
  Wincor Nixdorf	DE	1 367	3.1

Major M&A transactions

2014

• Advent International acquired Unit4
• Autodesk acquired Delcam
• Automic acquired Orsyp
• COR&FJA changed name to msg life AG
• Dassault Systemes acquired Accelrys
• Dassault Systemes acquired Quintiq
• Dassault Systemes acquired SimPack
• Hexagon acquired Devex
• Hexagon acquired iLab Sistemas
• Hexagon acquired Mintec
• Hexagon acquired North West Geomatics
• Hexagon acquired Vero Software
• KKR reduced ownership of Visma from 76% to 31.3%, HgCapital increased from 16% to 31.3%, and Cinven acquired 31.3%.
• Lexmark acquired ReadSoft
• Misys acquired Custom Credit Systems
• Misys acquired IND Group
• Northgate Information Solutions sold off its Public Services division to Cinven
• Opera Software acquired AdColony
• Sage acquired PayChoice
• SAP acquired Concur
• SAP acquired Fieldglass
• SAP acquired SeeWhy
• Schneider Electric acquired Invensys
• Software AG acquired JackBe
• Software AG sells off IDS Scheer Consulting to The Scheer Group
• Sopra Group acquired the COR&FJA Banking Solutions
• Sopra Group acquired Steria
• Wincor Nixdorf acquired Datec Retail Systems

2015

• Apax acquired Exact
• Asseco Group acquired Exictos SGPS
• AVG Technologies acquired Norman Safeground
• Bridgepoint acquired eFront
• Cegedim sold off CRM solutions to IMS Health
• Compugroup Medical acquired Medicitalia
• Dassault Systèmes acquired Modelon
• GAD merged with Fiducia and changed name to Fiducia & GAD
• Gemalto acquired Safenet
• Hexagon acquired Ecosys
• Hexagon acquired Q-DAS
• IFS acquired VisionWaves
• InfoVista acquired Ipanema Technologies
• Keysight Technologies acquired Anite
• Lexmark acquired Kofax
• Microfocus acquired Attachmate
• Permira acquired TeamViewer from GFI Software
• Qlik acquired Vizubi and NPrinting
• Unit4 acquired Three Rivers Systems
• Visma acquired e-conomic
• Vista Partner acquired Advanced Computer Software
• Wincor Nixdorf acquired services business from Brink
• Wolters Kluwer acquired Effacts Legal Management Software
• Wolters Kluwer acquired SureTax

European software vendors ranking 2015

Rank	Company	Country of HQ location	Public	Software +Services 2014 (m€)	Total revenues 2014 (m€)	R&D employees 2014
1	SAP	DE		17 243.9	17 560.0	18908
2	Dassault Systemes	FR		2 078.6	2 346.7	5562
3	Sage	UK		1 539.5	1 620.5	1169
4	Hexagon	SE		1 442.3	2 622.4	3430
5	Wincor Nixdorf	DE		1 367.0	2 471.0	750
6	Asseco Group	PL		1 193.3	1 487.6	3696
7	Software AG	DE		835.6	857.8	968
8	DATEV	DE		790.7	843.5	1355
9	Wolters Kluwer	NL		740.2	3 660.0	2222
10	Misys	UK		639.5	639.5	1100
11	Micro Focus	UK		627.9	627.9	897
12	SWIFT	BE		596.8	628.0	493
13	Unit4	NL		516.0	516.0	1380
14	Visma	NO		464.7	851.7	730
15	Cegedim	FR		460.6	911.5	959
16	Sopra Steria	FR		445.4	3 370.0	800
17	Qlik	SE		418.9	418.9	358
18	Avaloq	CH		411.6	411.6	300
19	Swisslog	CH		411.4	551.3	146
20	Northgate Information Solutions	UK		373.7	826.0	600
21	Fiducia & GAD	DE		369.3	458.4	220
22	Compugroup Holding	DE		368.8	515.1	1426
23	Murex	FR		368.0	368.0	386
24	Temenos	CH		352.6	352.6	441
25	Fidessa	UK		341.0	341.0	437
26	Gemalto	NL		333.9	2 465.0	1105
27	IFS	SE		333.4	333.4	333
28	ESET	SK		328.8	328.8	382
29	Zucchetti	IT		310.3	358.0	900
30	Schneider Electric	FR		304.1	1 713.0	565
31	Reply	IT		287.0	632.2	390
32	Sophos	UK		285.0	285.0	608
33	AVG Technologies	CZ		281.5	281.5	482
34	Centric	NL		275.2	494.5	146
35	Axway	FR		261.6	261.6	650
36	AVEVA Group	UK		258.8	258.8	562
37	Cegid	FR		243.0	266.6	546
38	Civica	UK		242.5	272.8	236
39	SimCorp	DK		241.1	241.1	448
40	Kofax (now part of Lexmark)	UK		222.0	222.0	413
41	Nemetschek Group	DE		218.3	218.5	605
42	Advanced Computer Software	UK		217.0	273.4	238
43	Comarch	PL		191.5	247.9	502
44	Exact	NL		188.1	188.1	454
45	Avast Software	CZ		163.3	163.3	230
46	PSI	DE		158.1	175.4	264
47	Linedata Services	FR		158.0	158.0	408
48	Haufe Group	DE		154.5	278.7	260
49	F-Secure Corp.	FI		153.8	153.8	134
50	SDL International	UK		142.1	322.9	255
51	Prodware	FR		139.0	174.4	274
52	RM	UK		134.5	248.0	109
53	Teamviewer	DE		119.9	119.9	120
54	Opera Software	NO		117.3	361.7	300
55	Affecto	FI		116.0	122.7	82
56	BasWare	FI		115.4	127.7	332
57	Sitecore	DK		112.4	112.4	190
58	ESI Group	FR		111.0	111.0	317
59	Anite	UK		108.9	146.9	205
60	Berger-Levrault	FR		107.0	122.8	239
61	Vizrt	NO		106.5	106.5	140
62	GFI Informatique	FR		106.3	804.0	238
63	Personal & Informatik	DE		102.9	105.5	135
64	msg life	DE		102.7	104.3	83
65	Avanquest Software	FR		101.6	101.6	103
66	Digia	FI		97.4	97.4	150
67	ISAGRI	FR		95.0	140.0	250
68	Automic	AT		92.7	92.7	119
69	Raet	NL		91.0	151.6	131
70	Gruppo Engineering	IT		89.7	817.3	285
71	Comptel	FI		85.7	85.7	126
72	Lumesse	UK		81.0	81.0	127
73	AFAS ERP Software	NL		79.6	79.6	95
74	Elca	CH		79.1	83.8	70
75	SmartFocus	UK		78.9	78.9	90
76	Buhl Data Service	DE		78.0	78.0	115
77	Panda Security	SP		75.2	75.2	200
78	IBS	SE		75.2	75.2	200
79	Kewill Systems	UK		74.3	74.3	100
80	Efront	FR		72.0	72.0	78
81	Seeburger	DE		70.0	70.0	120
82	ISIS Papyrus	AT		70.0	70.0	75
83	ERI Bancaire	CH		65.0	65.0	95
84	Lectra	FR		63.4	211.3	260
85	Aditro	SE		62.4	124.8	240
86	SSP Holding	UK		62.2	88.9	70
87	InfoVista	FR		61.0	61.0	118
88	proALPHA	DE		60.3	60.3	90
89	Cassiopae	FR		55.5	55.5	220
90	Hogia Group	SE		54.9	54.9	120
91	Talentia	FR		54.3	54.3	81
92	Meta4	SP		54.0	54.0	90
93	IRIS	UK		53.6	53.6	180
94	Schleupen	DE		53.5	61.5	110
95	Fiducial Informatique	FR		49.5	61.9	115
96	Generix Group	FR		49.4	49.4	48
97	Talend	FR		48.7	48.7	157
98	ENEA	SE		47.2	47.2	118
99	intershop Communications	DE		46.2	46.2	125
100	Thunderhead	UK		41.7	41.7	125