The Software & IT Services Market in Austria in 2021

Recently, PAC published its Software & IT Services – InSight Analysis – Austria analysis of the software & IT services (SITS) market in Austria in 2021. This blog post summarizes the main aspects.

Overall, the country's general economic structure is reflected by the SITS market: the highest IT-related spending can be found in the manufacturing industry (31% of the total SITS market), closely followed by the public sector (16%), banking (12%), and the services & consumer sector (12%). IT services account for the largest share of the Austrian market.

In 2021, the Austrian economy essentially recovered to pre-pandemic levels, and the SITS market showed positive growth compared to the previous year. The COVID-19 pandemic has accelerated digital transformation across all verticals. Topics such as new working models and the digital workplace are trending.

Cloud computing in particular seems to be accelerating in Austria. Traditionally, Austrian companies used to be rather cloud-averse, but they have started to move from on-premises solutions to the public cloud. AWS in particular has been able to increase its market share in software and cloud platforms (especially in manufacturing).

Overall, the Austrian market for software & cloud platforms is dominated by international providers, but some domestic companies hold large market shares - IBM, Microsoft, SAP, and Salesforce as well as industry specialists Knapp and CGM Clinical Österreich, which belongs to CompuGroup Medical. The IT services market in Austria, on the other hand, is very heterogeneous and dominated by small and medium-sized providers serving companies of the same size. However, in terms of market share, international companies are again the leaders (IBM, DXC, Accenture, Atos, T-Systems, SAP), but in recent years many local providers have strengthened their position in specific niche segments and have successfully competed with the big players (SCC, Bacher Systems, ACP, Kapsch BusinessCom, S&T, A1 Telekom Austria).

It is also interesting to note that on the whole, Indian companies are less strongly present in Austria than in other German-speaking countries (e.g., Switzerland).

The latest figures from PAC suggest that the overall IT market will grow at solid single-digit rates over the next 5 years, mainly driven by cloud solutions. However, challenges and threats - rising commodity prices and geopolitical tensions - might slow down this growth in the short term. Manufacturing in particular could be hit hard, as its production depends on energy and suppliers.