Markedsmuligheder for IT virksomheder i Tyskland

1. GrowBizProgram, Copenhagen May 8th
Germany Market Overview
Reinhold Säckl, Senior Management Consultant ICT

2. What are we doing?
• Help Danish companies to enter the German
market successfully
• Help established Danish companies to expand
their business in Germany
• Promote Denmark as an innovative business
partner
• Raise the profile of Denmark as an important
trading partner of Germany

3. The Trade Council of Denmark -
Accompanying enterprises across the border
Strategy Evaluation Decision & Investment
Project Management Assistance
Joint project Coordination
Business opportunity Market entry Project partner management and support of
analysis and market strategy identification with regional negotiations
research support and contact development with local
agency authorities
Location Consulting/Site Evaluation
Final site
Identification of project- Cost factor Site Site visit
decision
specific location factors analysis preselection organization
support
Support Services
Project-related Organization of Accompanying
financing and meetings with incentives
Identification of relevant Administrative
incentives legal advisors application and
tax and legal issues affairs support
consultancy and financial establishment
partners formalities

4. Example of services
Technology scouting Technology/R&D partner search
Incubator facilities
Trend spotting
Capital connection
Match-making R&D recruitment
R&D cooperation agreements Innovation inspiration tours
Access to R&D, Innovation and networks Network management
Mapping (i.e. funding/7FP) Medtech/Pharma/Biotech
Innovation workshops
Invention advisory board

5. Facts & Figures: Germany in Numbers
DK
BALTIC SEA
FLENSBURG
Form of Government – Federal Republic (16 states) NORTH SEA KIEL
ROSTOCK
Population 82 mio. SCHLESWIG-HOLSTEIN
MECKLENBURG- WESTERN
POMERANIA
SCHWERIN
The largest economic power in Europe HAMBURG
HAMBURG
GDP of € 2.5 billion BREMEN
BREMEN PL
BERLIN
NL LOWER SAXONY
Export-oriented Economy BERLIN
Decentralized Structures HANOVER POTSDAM
BRANDENBURG
Economic Power Centers MAGDEBURG
Large Manufacturing Base (Automobiles, Machinery) SAXONY-ANHALT
NORTH RHINE-WESTPHALIA
BE HALLE
LEIPZIG
DÜSSELDORF
SAXONY DRESDEN
A Typical German Company ERFURT
COLOGNE
Technology driven SME business FRANKFURT
THURINGIA
Privately Owend LUX HESSE CZ
WIESBADEN
MAINZ
RHINELAND PALATINATE NUREMBERG
SAARLAND
SAARBRÜCKEN
BAVARIA
F
STUTTGART
MUNICH
BADEN- WÜRTTEMBERG AUT
CH

6. The German Economy – The Headlines in 2011

7. The German Economy – Key Performance Indicators
GDP Growth YoY and Unemployment Rate in % (2010)
2011
2.9%
6.8%
Sources: German Federal Statistical Office, Eurostat, OECD, International Monetary Fund (IMF)

8. Germany as a Business Location
• Close to Denmark
• Leading and stabile Economy
• Secure Investment Environment
• German Speaking Countries
• Germany is looking at Denmark (IT for Renewable Energy Sector, School, Public
Services etc.)
• Long term relationships with customers and suppliers

9. Germany as a Business Location
The place to be for high-tech businesses: international top managers choose Germany
for quality and innovation
choose Germany as the best future sourcing location
right after China, the USA, and India.
14%
Future
Sourcing
say that quality is the main reason for the decision, pointing out
the country‘s global reputation for Made in Germany product
35% and manufacturing excellence.
Quality
choose Germany for its potential for
13% business, leaving USA and India behind.
Business
Note: The PwC 14th Annual Global CEO Survey asked 1,200 top managers and government officials about their corporate outlook and future
decisions. Source: Pricewaterhouse Coopers (PwC) 2011

10. Economic Power Centres
 Average population density: 231/km2
 40.3 million (48.9%) of the German population live in
4 metropolitan areas with more than 500 people/km2
 Major metropolitan regions:
2 Rhein / Ruhr Area
8 1
(Cologne, Düsseldorf, Dortmund, Essen): 5.7 million
i.e. Telecommunication industry
2 Berlin: 4.2 million
1 i.e. Internet, healthcare
9
3 Stuttgart: 2.6 million
i.e. Mechanical engineering
4 Hamburg: 2.6 million
> 500 people/km2 i.e. Logistics, media
6
> 200 people/km2 5 Munich: 1.9 million
i.e. Automotive, mechanical engineering etc
> 100 people/km2
7
> 50 people/km2 6 Frankfurt a. M.: 1.9 million
i.e. Finance & banking
3 ≤ 50 people/km2
7 Nuremberg: 1.0 million
i.e.Embedded systems
Cities
8 Hanover: 1.0 million
5 > 1,000,00 people
i.e. Automotive
> 500,000 people
9 Leipzig: 0.6 million
≤ 500,000 people i.e. Renewable energies, chemistry
Source: Atlas Deutschland 2010; Federal Statistical Office 2010

11. ICT Companies, Clusters & Competence Networks
Competence Network Federal State
Baden-Württemberg:
Baden-Württemberg
Connected
GEOkomm networks Brandenburg
IT Saar Saarland
IT4work Hessen
medRegio Lübeck Schleswig-Holstein
Mobilfunk NRW
Mobile Solution Group Bremen
REGINA e.V. NRW
Virtual Dimension Center Baden-Württemberg
We have associations for most
vertical IT sectors
National and federal
Source: BMWi – Kompetenznetze Deutschland (kompetenznetze.de), BITKOM/Roland Berger 2008, Bureau van Dijk 2008

12. The German ICT Market
ICT Industry Market Volume (2010)
800
705
700
600
Germany‘s ICT industry is ranked
Market Value (billions of Euro)
4th in worldwide comparison of
500
market volume
400
300
221
200
187
1
3
5 144 135
100
0
USA Japan China Germany UK
Note*: figures rounded
Source: EITO Report 2011
08.05.2012 – German ICT Market – Business Opportunities | 8

13. The German ICT Market
33.000 companies and 832,500 full time employees work directly in the ICT sector
Employees in the German ICT sector
(2010)
TC
• Another 650.000 ICT specialitst work in other
Hardware;
6.1%
industries , i.e. automotive, finance, etc.
• Within the ICT sector a total number of 18.600
TC
Services;
new highly qualified jobs were created in 2011
21.4%
• Most of the new workplaces were created in
medium-sized enterprises in the software an
IT-industry
• The software and IT-service sectors are one of
IT
Hardware; the job motors of the German Industry
2.8%
• Challenges 2012
Software Qualified People
and IT
Services; Salaries
69.7%
Source: BITKOM, 2011

14. The German IT Market
The most important IT trends and challenges 2012
Cloud Computing 51
IT Security 48
Embedded Systems 46
Broadband Internet Access 41
Location-based Services 38
Smart Grids 37
Virtualization 35
Softw are-based Products 29
Web-based Services and Trade 27
IT Systems in the Health Sector 26
Green IT 26
Smart Home 22
Government IT 17
Source: VDI, March 2011

15. IT Services – Cloud Computing
Cloud Computing Sales in
• 10% of total IT spending will go into Cloud
Germany (in EUR billion)
Computing technologies in 2015
9
• Cloud Services (turnover):
EUR 550 million in 2011 8 8.2
EUR 4.8 million in 2015 (+ 773 %) 7
• Cloud Infrastructures 6 6.5
EUR 400 million in 2011
5
EUR 2.6 billion in 2015 (+ 550 %)
4 4.5
• Cloud enabling services incl. consulting services
(turnover): 3
3.1
EUR 200 million in 2011 2
EUR 800 million in 2015 (+300%) 1.9
1
1.1
0
2010 2011 2012 2013 2014 2015

16. Telecommunications
The telecommunications sales volume in Germany is forecast to
consolidate at EUR 66.0 billion in 2012
Sales in the German Trends in the German
Telecommunications Market (in EUR bn) Telecommunications Market
80
Segment 2010 2011 2012
66.1 65.7 66.0
Mobile data services +18.2% +14.0% +10.0%
60
Fixed data services +0.9% +1.2% +1.2%
40 Mobile voice services -2.3% -6.5% -3.5%
Fixed voice services -8.0% -7.5% -7.5%
20
0
2010 2011 2012
Source: BITKOM, 2012

17. IT -Security
Sales of German IT Security Market by The market for IT security (products and services) is
Segments (in € million) growing due to steadily increasing risk potential
4500
4000
Network security
3500
493
Sales of German IT security reached
449 438
Equipment EUR 490 billion in 2012
3000 security
413 396
229
Information In international comparison German
119
2500 234
security users show a high need for security
385 361 205
107 Web security
233
359 181 203
2000 331
95
215
158 1 7 4
305
84 Data security
196
139 149
1500 5
127 181
168
Permission
1000 2114 management
1816
1548 Services
1317
1124
500
0
2008 2009 2010e 2011e 2012e
2008 2009 2010 2011 2012
Source: IDC, 2011

18. Doing business with Germans – cultural tendencies…
• Germans have a reputation for being thorough, exact and direct
• clear, direct communication, concise presentation important – come to the
point!
• Germans are direct in expressing views and opinions (no hidden language or
reading between the lines)
• English language skills
• Formal and business culture (language and dress code)
• Just in time…..
• Forward thinking / Anticipation of potential problems
• What is being said will be taken seriously, promises made are held and small
talk is withheld
• Germans are impressed with quality, reliability and reputation
=> show that you are prepared and confident (Market & Meeting Partner
Knowledge, Competition, Translations etc.
• They aim for long-term business relationships!

19. A successful market entry is down to preparation
• Blue vs Red Ocean
• Understand your target market AND your product!
- Value Proposition
- - Competitors
Who are current competitors?
Local or global players?
What are their positions, goals, strategies and USPs?
Who are their investors?
- How does your product/ service/ provide value compared to competitors?
- What is the value for the potential partner, reseller, distributor, direct
account?
- Customer Segmentation (Beachhead, Lighthouse, etc.)
- Channel Partner Modell
Profile and the criteria? (number of employees, national/
regional coverage? After sales support y/n?
• Bring it all together in a Go-To-Market Strategy!
• Be present in the market (local phone, address, contact details!)
• Be creative!

20. Recent project: Digital Case Management
• Company focused on Digital Case Management and Paperless Workflow
• 6 Ministries in DK
• Partner with Focus on Public Sector, good network, national coverage
• 15 potential companies have been identified
• ZERO interest!
• New strategy:
• Forget partners for now
• Find organizations on a science level consulting the Public Sector
• Meeting at Ministry Level
• Science Partner “Fraunhofer Institute” FRAUNHOFER
• Meeting at the Embassy in Berlin between
Jacob Heinzen, PS Ministry of Transportation DK
Cornelia Grothe, PS Ministry of Transportation GER + Head of CIO-Group
Ambassador, the client

21. Recent project: Digital Case Management
Outcome so far:
• Pilot at the Fraunhofer FOKUS Institut, focused on solutions for the Public Sector
• Pilot at the Ministry of Transportation

22. MAKE ONE OF DENMARK’S STRONGEST BRANDS
YOURS
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