Software industry in Romania exceeds 8 billion euros

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By Andra Beltz
The software industry in Romania will grow by approximately 12.5% in 2020, reaching a turnover of approximately 8.2 billion euros, according to KeysFin specialists’ estimates.
However, growth is slower than in 2019, when the sector recorded a turnover of 7.3 billion euros, almost 20% higher than in 2018 and over 69% compared to 2015.
The software industry in Romania remains in the top of key industries for the country’s economy, the share of the entire IT&C sector in gross domestic product being 6.1% in 2019 and 7.1% in the first half of 2020.
“We believe that innovation should be the basis of Romania’s sustainable development, and the software industry is the mainstay of local innovation. That is why we have reached the fourth consecutive edition of the study dedicated to the software industry in Romania, probably one of the more complex and detailed analysis dedicated to local IT, through which we always identify market trends and analyze the most important business indicators, so that by 2020, it is already clear that, paradoxically, the pandemic companies that have come up with digitization solutions suitable for the needs of many industries, obtaining results beyond expectations “, said Roxana Popescu, Managing Director of KeysFin, one of the most important providers of business information solutions in Romania.
In 2019, more than 24,000 software companies were active in Romania, 6.2% more than in 2018 and 38.9% more than in 2015, of which: 22,600 micro, 1,100 small companies, 328 companies medium and 20 large companies. The largest share of turnover was generated by medium-sized companies, with 37.4% of the total, followed by corporations with 25.7%, small companies with 19.8% and micro-enterprises with 17.1%. In fact, the software industry is one of the most balanced local industries in terms of turnover distribution by type of company, the difference of maximum 20 percentage points between categories being relatively minor compared to other key sectors in our country.
The largest software company in Romania remains Oracle Romania SRL, with a turnover of over 200 million euros (2.7% of the total). The ranking is completed by IBM Romania (over 197 million euros – 2.6% of the total), Ericsson Telecommunications Romania SRL (over 161.3 million euros, 2.2% of the total), Bitdefender SRL (approximately 140.5 million and Endava Romania SRL (approximately 135.5 million.
The 10 largest companies in the industry accumulated a turnover of approximately 1.3 billion euros, representing 17.6% of the total. And in terms of profitability, the results are positive: net profit increased by 27.3% compared to 2018 and by over 110% compared to 2015, reaching over 1 billion euros in 2019. Moreover, of the 24,000 companies analyzed, 16,000 (67%) were profitable, approximately 6,000 (25%) were at a loss, and the rest had a zero result in 2019. Also, the number of insolvencies decreased by over 25% compared to 2018, to 56 of insolvencies in 2019.
On the first place in the top of the most profitable players in the field is in 2019 SAP Romania, with a net profit of 36.4 million euros, but lower than in 2018, when it exceeded 40 million euros (in currency national level, the decrease was below 8%). The most profitable 5 companies had in 2019 a cumulative net profit of 104.2 million euros, respectively 9.7% of the total.
According to the analysis, the number of employees in the software industry has increased by 43.3% in the last 5 years, to 130,000 in 2019. However, according to Eurostat data this year, Romania ranks first in the EU in the shortage of employees In this field, the need is estimated at tens of thousands of specialists, according to professional associations. Of course, the race to attract IT employees, and especially the best ones, has led to an increase in the average cost per employee by almost 45% in the last 5 years and by 9% compared to 2018, to 25,500 euros in 2019.
However, Romanian IT professionals also have excellent productivity: productivity per employee has increased by more than 18% in the last 5 years and over 11% compared to 2018, reaching an average level of 56,200 euros / employee in 2019.

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