Growth Verticals
l Manufacturing: Largest IT consumer with 25% of all IT spend from manufacturing and engineering. Accounts for largest number of companies and is largest employer. This includes the German automotive industry—which is the world’s third largest producer of automobiles.

l Financial Services: Frankfurt vying to be the financial capital of Europe. Currently houses more than 330 banks including the German Central Bank and the European Central Bank. Also houses the fourth largest stock exchange in the world after New York, Tokyo and London. Overall, Banks and Insurance companies account for 12% of German IT spend. Recent spate of consolidation in the industry makes it more amenable to outsourcing.

SWOT
l Strengths: Is the largest European market for information and communication technologies accounting for about 23% marketshare in W. Europe; large IT skill shortage estimated at 25% gap between demand and supply; cost driven push toward outsourcing

l Weaknesses: Very export dependent economy hit hard by the Asian market crises of 1998 and the current downturn. Slowing GDP growth and double digit unemployment in the erstwhile East Germany. Very regulated market especially in relation to labor laws. Knowledge of local language very important.

l Opportunities: A very healthy financial services sector more open to outsourcing than its American counterpart. Manufacturing sector slowing but strong. Growing Ecom market. Can provide access to other German speaking European markets like Austria and Switzerland.

l Threats: Downturn, slowing GDP and growing unemployment has led to a subdued but growing resistance to outsourcing. Over investment in Telecom and the long delayed 3G experiment has hit what was otherwise a robust sector.

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