Market OverviewThe total size of the Serbia IT market in 2010 is estimated by BMI at around US$791mn, up fromUS$740mn in 2009. BMI expects a market compound annual growth rate (CAGR) of 11% for 2010-2014, as the market grows at a rate above the regional average. The IT market is expected to return topositive growth, but BMI expects demand to remain constrained going into H110 by reduced access tocredit and negative economic expectations.There should still be opportunities in 2010, however. The privatisation of Telekom Serbia should drivenew investment in the telecoms sector, while the roll-out of an ambitious plan to modernise healthcareshould provide opportunities.The government's stated agenda of privatisations would, if implemented, be an important driver ofspending in sectors such as banking, telecoms and utilities. Vendors will also target Serbia's 318,745small enterprises, many of which are still looking to deploy basic IT infrastructure. Industry DevelopmentsThe current Serbian government, which was elected in July 2008, has an agenda of strengthening Serbia'sIT development through attracting new investment into the sector, skills initiatives and speeding up theapplication of IT. The government has also associated itself with an agenda of faster reform andprivatisation. This has the potential to drive IT spending in key sectors such as bankingIn 2009, the government announced that the privatisation of Telekom Serbia would be postponed until2010 due to the financial crisis. The company's privatisation is of great significance to Serbia's ICTdevelopment, as it should allow faster modernisation of Serbia's telecoms and IT infrastructure. Higherpenetration on a number of ICT indicators could be driven by more competition and lower prices.Meanwhile, a major project to develop a modern healthcare system in Serbia is likely to provideopportunities for IT vendors going forward. The Serbia Health project, which has received World Bankfunding, is designed to drive improvements in hospital care and increase efficiency of delivery. IT iscentral to a number of components to be financed by the project. Competitive LandscapeThe largest computer seller in Serbia is local IT giant ComTrade, with the top multinational brands beingHP, Lenovo, Dell, Toshiba and Fujitsu Siemens. The Serbian computer market remains highly pricesensitive,with many consumers preferring to buy 'white boxes' assembled from Far Eastern components.Multinational vendors have strengthened their position in the Serbia brand PC market in the past fewyears, however.Microsoft dominates the operating system Software segment with around 90% of the market. However,the company projected flat turnover growth of US$45mn in its 2010 fiscal year (ending June 30 2010)due to the economic crisis. The company hoped to receive a boost from the October 2009 launch of itsnew operating system, Windows 7.The IT services opportunity is a draw for vendor investment in the country. IBM opened its Serbia officein 2006, signalling its intention to target opportunities beyond hardware sales in this market. IBM hadpreviously worked with various partners in Serbia, but a direct presence gave the company more clout inbidding for tenders and developing solutions tailored for the Serbian market. Computer SalesBMI projects that Serbia's PC market (including notebooks and accessories) will be worth US$436mn in2010, compared with US$405mn in 2009 but US$405mn in 2008. A 2010-2014 Serbia computer marketCAGR of 11% is forecast, with computer sales including notebooks and accessories reachingUS$6786mn by 2014.With only around 40% of households having a computer according to government figures, the marketlooks set to be dominated by hardware sales for some time to come. In H109, volume sales suffered adouble-digit percentage decline, according to vendors, with negative growth in both desktop andnotebook categories. In H109, an average of around 800 computers were sold a day, down from around1,000 a da

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Serbia Information Technology Report 2010
Published on November 2009
Report Summary
Market Overview
The total size of the Serbia IT market in 2010 is estimated by BMI at around US$791mn, up from
US$740mn in 2009. BMI expects a market compound annual growth rate (CAGR) of 11% for 2010-
2014, as the market grows at a rate above the regional average. The IT market is expected to return to
positive growth, but BMI expects demand to remain constrained going into H110 by reduced access to
credit and negative economic expectations.
There should still be opportunities in 2010, however. The privatisation of Telekom Serbia should drive
new investment in the telecoms sector, while the roll-out of an ambitious plan to modernise healthcare
should provide opportunities.
The government's stated agenda of privatisations would, if implemented, be an important driver of
spending in sectors such as banking, telecoms and utilities. Vendors will also target Serbia's 318,745
small enterprises, many of which are still looking to deploy basic IT infrastructure.
Industry Developments
The current Serbian government, which was elected in July 2008, has an agenda of strengthening Serbia's
IT development through attracting new investment into the sector, skills initiatives and speeding up the
application of IT. The government has also associated itself with an agenda of faster reform and
privatisation. This has the potential to drive IT spending in key sectors such as banking
In 2009, the government announced that the privatisation of Telekom Serbia would be postponed until
2010 due to the financial crisis. The company's privatisation is of great significance to Serbia's ICT
development, as it should allow faster modernisation of Serbia's telecoms and IT infrastructure. Higher
penetration on a number of ICT indicators could be driven by more competition and lower prices.
Meanwhile, a major project to develop a modern healthcare system in Serbia is likely to provide
opportunities for IT vendors going forward. The Serbia Health project, which has received World Bank
funding, is designed to drive improvements in hospital care and increase efficiency of delivery. IT is
central to a number of components to be financed by the project.
Competitive Landscape
The largest computer seller in Serbia is local IT giant ComTrade, with the top multinational brands being
HP, Lenovo, Dell, Toshiba and Fujitsu Siemens. The Serbian computer market remains highly pricesensitive,
with many consumers preferring to buy 'white boxes' assembled from Far Eastern components.
Multinational vendors have strengthened their position in the Serbia brand PC market in the past few
years, however.
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Microsoft dominates the operating system
Software
segment with around 90% of the market. However,
the company projected flat turnover growth of US$45mn in its 2010 fiscal year (ending June 30 2010)
due to the economic crisis. The company hoped to receive a boost from the October 2009 launch of its
new operating system, Windows 7.
The IT services opportunity is a draw for vendor investment in the country. IBM opened its Serbia office
in 2006, signalling its intention to target opportunities beyond hardware sales in this market. IBM had
previously worked with various partners in Serbia, but a direct presence gave the company more clout in
bidding for tenders and developing solutions tailored for the Serbian market.
Computer Sales
BMI projects that Serbia's PC market (including notebooks and accessories) will be worth US$436mn in
2010, compared with US$405mn in 2009 but US$405mn in 2008. A 2010-2014 Serbia computer market
CAGR of 11% is forecast, with computer sales including notebooks and accessories reaching
US$6786mn by 2014.
With only around 40% of households having a computer according to government figures, the market
looks set to be dominated by hardware sales for some time to come. In H109, volume sales suffered a
double-digit percentage decline, according to vendors, with negative growth in both desktop and
notebook categories. In H109, an average of around 800 computers were sold a day, down from around
1,000 a day in 2009, with desktops still accounting for around 70% of sales.
Software
The Serbian addressable software market is projected by BMI at US$86mn in 2010 and is expected to
grow at a CAGR of 14% over the 2010-2014 forecast period. Serbia lags far behind most regional
neighbours in software deployment, but there is a growing awareness among enterprises of the potential
benefits of utilising IT.
Small and medium-sized enterprises (SMEs) will be an important target for vendors due to their generally
low level of informatisation, which adds up to a big potential market for basic enterprise resource
planning (ERP) and enterprise resource management (ERM) applications. Larger companies will continue
to offer important opportunities, however, as the Serbian government has pledged to accelerate
privatisation of key state enterprises. Further market growth will depend on the government's efforts in
combating piracy, which is still around 76% (although down from 90% a few years ago).
Services
The Serbian IT services market was expected to be worth around US$154mn in 2010 according to BMI
estimates, accounting for around 19% of all IT spending in Serbia. IT services CAGR for the sector for
the 2010-2014 period is forecast at around 13%, with the market opportunity reaching US$295mn by
2014.
Government ICT initiatives and EU funding should continue to provide opportunities, as the banking and
government sectors, in particular, invest in IT that will enable them to compete in a changing
environment.
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Table of Content
Executive Summary ...........................5
SWOTS .......8
Serbia IT Sector SWOT . 8
Serbia Telecommunications Industry SWOT ... 9
Serbia Political SWOT 10
Serbia Economic SWOT ................................ 10
Serbia Business Environment SWOT ............ 11
Central and Eastern Europe IT Markets Overview ...........12
IT Penetration ............. 12
Market Growth And Drivers ......................... 13
Sectors And Verticals .. 14
IT Business Environment Ratings ...17
Central and Eastern Europe IT Business Environment Ratings .................. 17
Table: Regional IT Business Environment Ratings ................................ 19
Serbia Market Overview ...................20
Government Authority . 20
EU Authority ............... 20
History And Market Structure ....................... 20
Hardware .................... 21
Software ...................... 22
Services ....................... 23
Industry Developments ................................. 24
Industry Forecast Scenario ..............27
Table: Serbia's IT Sector - Historical Data And Forecasts (US$mn Unless Otherwise Stated) 29
Internet ....................... 30
Table: Serbia Internet Historical Data & Forecasts .............................. 30
Macroeconomic Forecast ............................. 32
Table: Serbia - Economic Activity, 2006 ' 2013 .. 34
Competitive Landscape ...................35
Hardware .................... 35
Vendors ....................... 35
Channels ..................... 35
Software ...................... 35
Operating Systems ...... 35
Enterprise Software .... 36
IT Services .................. 36
Regional Players ......... 37
Company Profiles .............................38
Microsoft ..................... 38
ComTrade ................... 40
IBM Serbia .................. 41
HP ............................... 42
Country Snapshot: Serbia Demographic Data .................43
Section 1: Population .. 43
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Table: Demographic Indicators, 2005-2030 . 43
Table: Rural/Urban Breakdown, 2005-2030 44
Section 2: Education And Healthcare ........... 44
Table: Education, 2000/01 ............................ 44
Table: Vital Statistics, 2005-2030 ................. 44
Section 3: Labour Market And Spending Power .. 45
Table: Employment Indicators, 2001-2006 ... 45
Table: Average Annual Manufacturing Wages, 2000-2012 ................... 45
BMI Methodology .............................46
IT Ratings ' Methodology 46
Ratings Overview ........ 46
Table: IT Business Environment Indicators .. 47
Weighting .................... 48
Table: Weighting Of Components ................. 48
How We Generate Our Industry Forecasts ... 48
IT Industry .................. 49
Sources ....................... 49
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