BMI View: We forecast total Israeli IT market spending will increase at a CAGR of 4.5% throughout2016-2020 to a total of ILS27.7bn. This is a slightly downgraded outlook in Q416 as a result of a weakereconomic outlook. However, our core scenario remains in place, and we maintain that performance willstrengthen from 2017. This is particularly so in the hardware segment, where a combination of productcycles and shekel depreciation resulted in a marked growth slowdown throughout 2014-2016. Software andIT services are forecast to outperform through the strong growth in the cloud computing services and IoTservices markets.
Latest Updates & Industry Developments
- IT hardware sales will expand from ILS6.29bn in 2016 to ILS6.66bn in 2020, corresponding to acompound annual growth rate (CAGR) of 1.4%. Volume growth potential is limited by maturity, andsmartphones could cannibalise replacement spending, but our core scenario is for shekel appreciation tosupport the market throughout the medium term.
- Software sales will increase from ILS5.92bn in 2016 to ILS7.05bn in 2020, a CAGR of 4.4%. Cloudavailability expected to deepen the market, but the positive impact will be tempered by the extent towhich cloud competition results in price erosion.
- IT services will the outperforming segment of the sector, and is forecast to grow from ILS11.01bn in2016 to ILS13.94bn in 2020, at a CAGR of 6.1%. Demand for cloud computing, Internet of Things (IoT)and outsourcing services expected to be robust.
Table Of Contents
Israel Information Technology Report Q4 2016 BMI Industry View 7 Latest Updates and Industry Developments 7 SWOT 9 Industry Forecast 11 Latest Updates 11 Structural Trends 11 Table: Enterprise Trends - GVA By Vertical (Israel 2015-2020) 15 Table: IT Industry - Historical Data And Forecasts (Israel 2013-2020) 15 Industry Risk/Reward Index 16 Industry Risk Reward Ratings 16 Table: Middle East And Africa IT Risk/Reward Index, Q4 2016 19 Market Overview 20 Recent Developments 20 Hardware 20 Software 25 Cloud Computing 28 IT Services 30 Industry Trends And Developments 34 IT Hardware Trade 34 Table: Middle East IT Hardware Trade, 2009-2014 34 Table: Israel IT Hardware Trade, 2010-2015 35 IT Industry Analysis 36 Table: Israel IT Hardware Industry, 2011-2014 38 Table: IT Software and Services Industry, 2011-2014 39 Regulatory Development 40 Table: IT Regulatory Authorities 40 Table: Government Initiatives 42 Competitive Landscape 43 Israel IT Companies 43 IT Vendors - EMEA, 2015 50 Table: Computer Hardware 50 Table: Software 50 Table: Cloud 51 Table: IT Services 52 Retailers 53 Table: Major Electronics Retailers 53 Table: Major Online Retailers 54 Regional Overview 55 Demographic Forecast 58 Table: Population Headline Indicators (Israel 1990-2025) 59 Table: Key Population Ratios (Israel 1990-2025) 60 Table: Urban/Rural Population and Life Expectancy (Israel 1990-2025) 60 Table: Population By Age Group (Israel 1990-2025) 61 Table: Population By Age Group % (Israel 1990-2025) 62 Methodology 63 Industry Forecast Methodology 63 Sources 65 Risk/Reward Index Methodology 65 Table: IT Risk/Reward Index Indicators 66 Table: Weighting Of Components 67