ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the May 2005 issue


Private Firms Expand Share of Computer Market


The Israeli computer market was worth $2.93 billion in 2004, which was also the first year to record significant growth in this market after three years of decline. In 2003 the local market was valued at $2.46 billion, down 8.5 percent compared with 2002, according to a recent report issued by Meta Group.

Jimmy Schwarzkopf, Meta's research director predicts that this year will witness further significant growth - of 12.5 percent - that the market will top the $3 billion mark for the first time since 2000 and will amount to some $3.3 billion.

The government, which accounted for the largest share of the pie in 2003 and 2004, is expected to reduce its computer expenses, while the sectors that will increase their computer expenditures considerably - according to Meta Group - are the banking sector and financial organizations (including insurance companies); telecom companies, which spent substantially more on computers in 2004, infrastructure and transportation companies, and the small business sector that operates from homes.

IBM Israel is the largest computer company in Israel, with HP right behind it and Ness Technologies in third place. Next in line are Matrix, Bynet and Team. IBM is also the leading company in the computer sales market in Israel - both in the desktop computer market and in the laptop market - and is followed by HP and Dell. In the other hardware market - Intel-based servers - HP is the market leader, followed by IBM, Dell and Sun Microsystems. In the Unix-based server category, HP is the leader again, having surpassed Sun, which was in first place last year but has dropped to second place this year. IBM is in third place.

The Israeli information storage market is led by CME Israel, followed by HP Israel, Network Appliance Israel, IBM, Hitachi Data Systems and Sun. Cisco Israel is the front-runner in communications equipment market, which is ranked for the first time this year, followed by Nortel, Motorola, Juniper Networks, InterSystems and Avaya. The communication network integration market is led by the Bynet Group, followed by Netcom Systems, Telrad and the Mittwoch Group. The added value services market, which includes special integration and outsourcing projects is headed up by Ness, followed by IBM, Matrix HP, Malam and Telrad. In the outsourcing market itself (which includes the outsourcing of pay slips), Ness is No. 1, followed by Malam, the Automation Company, EDS and IBM. In 2004 Ness pulled ahead at the expense of EDS and IBM, whose rankings slipped compared to last year.

The consulting market in 2004 was led by IBM, followed by Accenture and Matrix. This is quite a switch from 2003, when Matrix was in first place, followed by IBM and Netcom. In 2004 Netcom dropped to fourth place while IBM moved into first.

Matrix, which owns John Bryce Training currently leads the information technology training market, followed by Sela College, Ness' training division, High-Tech College and Emet Group.


Reprinted from the Israel High-Tech & Investment Report May 2005

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