2003 - and the big IT recovery
The revenue windfall the country's major IT firms have been expecting from the anticipated demand for products and services brought about by accession to the European Union will finally start to pay off in 2003, triggering a sector recovery. Big tech firms have been hard hit by the overall recession for the past two years as prospective customers have kept plans to upgrade their IT systems on hold.
But analysts now forecast revenue growth of 8%-15% in 2003 compared with last year's 5%-8% growth rate. Total sales for the IT sector in 2003 should reach €3.94 billion compared with €3.53 billion in 2002 and about €3.19 billion in 2001, said Marek Paczuski, an analyst at CA IB Securities in Warsaw, citing figures provided by tech research firm IDC.
Primarily, companies in the public administration sector will drive up IT revenue as they start spending funds on upgrading or replacing their systems, especially for EU-related projects, such as a centralised system for border patrol guards and a central drivers registry, which need to be completed by June 2004, the country's expected accession date. Such EU-related projects will range from €1.25 million-€24.4 million (zł. 50 million-zł. 100 million), estimates Tomasz Bardziłowski, an IT analyst at Credit Suisse First Boston in Warsaw. The central drivers registry alone is estimated to be worth about €24.4 million (zł. 100 million), he said.
"In terms of the computerisation of the country, Poland is well behind not only the EU, but also some neighbouring countries like the Czech Republic and Hungary," said Benita Mikołajewicz, an IT analyst at ING Barings in London. "In order to prepare for the rising competition after our EU entrance, companies should start to be more aware of IT infrastructure."
The largest stock exchange-listed IT firms - Prokom, ComputerLand and Softbank - will stay on top, reaping the abundant harvest from EU projects. They are also strong contenders for the two huge contracts for central IT systems offered by PKO BP and insurer PZU. The PKO contract is said to be worth about €499 million (zł. 2 billion), and the PZU contract €299 million (zł. 1.2 billion). Although the initial stages of the bidding processes have begun, neither contract will likely start to be fulfilled until the second half of the year.
This year, however, the IT majors will not reap any financial benefits from the tech-related offset deals that will be generated by the government's recent €3.5 billion deal with American defence contractor Lockheed Martin for the purchase of 48 jet-fighter aircraft. Revenue from any offset project investments for IT companies, such as ComputerLand, which has already signed a letter of intent for a joint venture with Lockheed, won't likely affect their bottom lines until 2004, 2005 or 2006.
"At this stage, there are no estimates of an increase in value related to the IT market from the offset deals, and these deals will not take affect for a few years," Bardziłowski said.
But analysts now forecast revenue growth of 8%-15% in 2003 compared with last year's 5%-8% growth rate. Total sales for the IT sector in 2003 should reach €3.94 billion compared with €3.53 billion in 2002 and about €3.19 billion in 2001, said Marek Paczuski, an analyst at CA IB Securities in Warsaw, citing figures provided by tech research firm IDC.
Primarily, companies in the public administration sector will drive up IT revenue as they start spending funds on upgrading or replacing their systems, especially for EU-related projects, such as a centralised system for border patrol guards and a central drivers registry, which need to be completed by June 2004, the country's expected accession date. Such EU-related projects will range from €1.25 million-€24.4 million (zł. 50 million-zł. 100 million), estimates Tomasz Bardziłowski, an IT analyst at Credit Suisse First Boston in Warsaw. The central drivers registry alone is estimated to be worth about €24.4 million (zł. 100 million), he said.
"In terms of the computerisation of the country, Poland is well behind not only the EU, but also some neighbouring countries like the Czech Republic and Hungary," said Benita Mikołajewicz, an IT analyst at ING Barings in London. "In order to prepare for the rising competition after our EU entrance, companies should start to be more aware of IT infrastructure."
The largest stock exchange-listed IT firms - Prokom, ComputerLand and Softbank - will stay on top, reaping the abundant harvest from EU projects. They are also strong contenders for the two huge contracts for central IT systems offered by PKO BP and insurer PZU. The PKO contract is said to be worth about €499 million (zł. 2 billion), and the PZU contract €299 million (zł. 1.2 billion). Although the initial stages of the bidding processes have begun, neither contract will likely start to be fulfilled until the second half of the year.
This year, however, the IT majors will not reap any financial benefits from the tech-related offset deals that will be generated by the government's recent €3.5 billion deal with American defence contractor Lockheed Martin for the purchase of 48 jet-fighter aircraft. Revenue from any offset project investments for IT companies, such as ComputerLand, which has already signed a letter of intent for a joint venture with Lockheed, won't likely affect their bottom lines until 2004, 2005 or 2006.
"At this stage, there are no estimates of an increase in value related to the IT market from the offset deals, and these deals will not take affect for a few years," Bardziłowski said.
