The Swiss software industry masters the crisis year 2020
The latest Swiss Software Industry Survey (SSIS) conducted by the University of Bern on behalf of ICTswitzerland shows that Swiss software companies will get off lightly in the crisis year 2020 and can look to the future with confidence: in 2020, sales are expected to grow by a further 2.7%, while employee numbers will increase by 6%. While these figures are significantly lower than last year's figures - in 2019, the forecast revenue growth was 9.5% and the increase in the number of employees was 11.6% - the situation promises to recover in 2021 with revenue growth of 10.2% and an increase in the workforce of 11.6%.
The SSIS is the largest study of the Swiss software industry and provides forward-looking statements on revenue and employee growth. This year's study focused on the impact of COVID-19 and the importance of software reuse for Swiss software companies. The results were presented on the occasion of the CNO panels published in Bern on October 26, 2020.
The main results of the SSIS 2020
The SSIS 2020 states moderate growth overall with prospects for improvement: Profitability (EBIT margin) fell by 2.2 percentage points year-on-year to 6% in 2019. At the same time, Swiss software companies were able to increase revenue per employee to around CHF 245,000. Looking ahead to 2020, the software industry expects low revenue growth of 2.7% (2019: 9.5%) and employee growth of just 6% (2019: 11.9%). For 2021, a recovery is in sight with a forecast revenue growth of 10.2% and employee growth of 11.6%.
Swiss software industry successful abroad
2020 formed a successful year for foreign business: In 2020, the Swiss software industry generated around 21% of its sales abroad. After an interim decline in 2018 to around 14%, this represents a return to the export ratio of 2017. Germany remains by far the most important export market with a share of total sales abroad of around 55%, followed by the other European countries. The export share to non-European countries remains relatively low at 14.6%.
Investing in home office infrastructure in the wake of the COVID 19 pandemic.
Swiss software companies have not been spared from COVID-19 and the associated restrictions. Overall, however, the Swiss software industry was well prepared for the lockdown. Only 10.2% of the companies surveyed had to make major investments in the company-wide basic infrastructure for home office work (e.g. communication and collaboration software or VPN). However, 86.7% of the companies surveyed had to make larger investments to equip employees' home offices (e.g. in notebooks, monitors or headphones).
More flexible working models as a result of the COVID 19 pandemic
A majority of the Swiss software companies surveyed expect that the experience with COVID-19 and the associated restrictions will lead to the introduction of more flexible working models. In addition, a third of the companies surveyed want to empower their employees even more. Only 4% of the companies want to reduce their dependence on freelancers and sourcing service providers.
Revenue sources during the COVID-19 pandemic.
Providers and resellers of standard and cloud solutions as well as providers of customization services for third-party solutions experienced a slight upswing thanks to the pandemic. However, the majority of the industry suffered from the postponement of existing orders and the difficulty in acquiring new customers and new orders.
Swiss software industry wants to reuse more software
Increasing productivity through software reuse is of strategic importance: Reusing software and software knowledge to create new software is of great importance to Swiss software companies: 73.2% of the companies surveyed systematically store knowledge from past projects for reuse, 67.6% consider reuse to be critical to success, and for 50.3% it is even among their declared strategic goals.
Source and further information: ICT Switzerland
