Capitalizing on the European Market

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Capitalizing on the European Market
Carmen Sebe, CEO / Avangate BV carmen.sebe_at_avang
ate.com
Software Industry Conference 17-19 July 2008
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Agenda

• Market overview why Europe?
  Europe a software market as big as the US
• What to consider when going to Europe Overcoming
  the entry barriers
• Some ideas on how to generate money from a
  foreign market

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(No Transcript)
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Market overviewGlobal Software Market

• In 2011, the Global Software Market is forecast
  to have a value of 271.8 billion, an increase of
  33.6 since 2006.

Global Software Market Value Forecast billion,
2006-2011 Source Datamonitor
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Market overviewGlobal Software Market
Segmentation

• Americas region accounts for 42.1 of the global
  market's value.
• European region generates 36 of the global
  market's revenue.

Share, by Value Source Datamonitor
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Market overviewEuropean Software Market

• In 2011, the European Software Market is forecast
  to have a value of 91.9 billion, an increase of
  25.4 since 2006.

European Software Market Value Forecast
billion, 2006-2011 Source Datamonitor
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Market overviewEurope by Country

• France is the most lucrative software market in
  Europe, accounting for 23.7 of the European
  market's value.
• United Kingdom generates an additional 22.2 of
  the regional market's value.

Share, by Value Source Datamonitor
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Software Piracy in Europe

• The software piracy record in Europe is mixed
• Austria, Finland have the lowest rates
  Worldwide, 26
• Average in EU 36
• Central and Eastern European rate 69
• Rates in Russia and Ukraine have experienced the
  largest decreases in the world, but still very
  high around 80
• High piracy regions are also high market growth
  regions - for example IT spending in Russia in
  the next five years is expected to grow between
  15 and 20 percent -

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eCommerce Opportunities in Europe

• Despite its late start Europe is now a mature
  eCommerce market and one of the biggest markets
  in the World.
• A mature market concentrated in Northern Europe
  (United Kingdom, Germany and the Scandinavian
  countries) where 60- 80 of Internet users are
  eShoppers.
• A growing market in France, Italy and in Spain
  with a ratio of eShoppers to Internet users the
  weakest (between 35-50 according to markets),
  but a very strong growth rate amongst new
  eShoppers which bodes for excellent potential for
  the short and long term.

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eCommerce Opportunities in Europe

• A budding market represented by Eastern Europe,
  with different levels of maturity according to
  the countries
• 2008 and 2009 years will be significant for the
  development of e-commerce in Europe

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Is Europe a good place to be?

• Opportunities
• Europe a market as big as US
• A software market accounting 91.9 billion
• Both mature markets and new markets
• IT spending for decreasing the software piracy
• High end market
• Favorable exchange rate /

• Entry barriers
• Language barriers
• Multiple currencies, eased by adoption of the
  Euro
• Differing tax and VAT regimes
• Uncertainty over and pending legislation on
  ecommerce taxation
• Cultural differences

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What do I need to sell in Europe? Product
Localization
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What do I need to sell in Europe? Customer
Support
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What do I need to sell in Europe? VSO
ConvertXtoDVD - Product Localization
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What do I need to sell in Europe?
VSO-Software.fr Website Localization
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What do I need to sell in Europe? VSO
ConvertXtoDVD - Product Localization
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What do I need to sell in Europe?
VSO-Software.fr Website Localization
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What do I need to sell in Europe?
VSO-Software.fr - Customer Support
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What do I need to sell in Europe?
VSO-Software.fr - FAQs
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What do I need to sell in Europe?
VSO-Software.fr - Tutorials
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What do I need to sell in Europe?
VSO-Software.fr - eMail
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What do I need to sell in Europe? Other things
to consider

• PRICING
• US for the US Euros for Europe
• Online to have an eCommerce provider that
  allows to set prices in different currencies
• Channel to have a price list in Euros

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What do I need to sell in Europe? Other things
to consider

• LEGAL
• VAT
• EU countries for direct sales
• The end user will pay their country VAT
• Should register in an EU country for VAT
  reimbursement
• Non -EU countries VAT does not applies.
• Trade mark
• Register in EU to protect the mark (should be
  used in a 5 years period of time)

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Start selling in Europe Make your product
available online

• What you have to consider
• Cultural differences
• eCommerce is available in Europe from 1998 since
  in the US is available since 11 August 1994
  (according to the University of North Carolina -
  the first retail Internet transaction probably
  took place then).
• More and different payment methods available
• Local online promotion

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Start selling in Europe Setting up a
Distribution Channel

• Your partner will
• Generate revenue for you
• Market your product and generate brand awareness
• Local support and help you with the localization
• What you have to do
• Generate an attractive partnership program
• Look for the right partner (or at least A
  partner)
• Support your partner actively

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Start selling in Europe Partnership Program

• Commercial conditions
• Partnership levels Reseller discounts
• Payment terms
• Partner Training Support
• Online
• Face to face
• Marketing coop-fund and joint marketing
  activities

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Start selling in Europe Look for Partners

• Where and how to look for partners
• Choose a country, if you have a reason to, or go
  generally
• Local IT events conferences, trade shows
• Referral from your business partners or clients
• Online sign up

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Start selling in Europe DrWeb.com - Partnership
Program
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Start selling in Europe DrWeb.com Look for
Partners
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Conclusions

• Going to Europe is not very expensive
• You can go by yourself, but it is more
  profitable and easy with a partner
• Balance your revenue
• Minimize the business risk
• More attractive for venture capital

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• Thank you!
• Questions?
• Carmen Sebe
• CEO Avangate B.V.
• carmen.sebe_at_avangate.com