9th edition of the Panorama Top 250 of French software publishers
Last night, Syntec Numérique and EY presented the results of the ninth edition of the Top 250 French software publishers, this year’s industry benchmark survey of over 300 companies. The sector remains extremely dynamic and innovative in France, despite the recruitment difficulties that continue to affect it.
Software publishing, an industry in constant growth thanks to all its players
A decade of uninterrupted growth for the sector, a remarkable performance : sales generated in 2018 by the 319 publishers included in the panorama reached 16 billion euros (compared to 15 billion in the previous edition with 341 companies listed). A substantial sales figure, even if there has been a slight dip after years of marked growth.
International sales are a strategic challenge for French software publishers : the proportion of sales generated outside France is 54%, similar to last year’s figure. This stability marks the end of several years of steady growth in international sales. It is mainly due to the weaker performance of some of our national champions.
Growth momentum and an equity financing afllux conducive to the emergence of external growth operations: software publishers’ interest in external growth remains strong in 2018. Half of the panel say they are ready to consider an operation of this type in the coming months. What’s more, while software publishers are aware of the importance of their domestic market – 33% of them focus on France when identifying opportunities – they are not closing any doors. In fact, 50% of them are looking at opportunities both in France and abroad, 7 points more than in 2017.
Financing, a real challenge: Almost all publishers (91%) finance their development through self-financing. 62% also use bank debt and 31% private equity in France. Only 12% raise capital abroad. They are therefore firmly rooted in their local area and in local financing ecosystems.
SaaS and cloud offerings on the way to becoming market standards: French software publishers are continuing their transition to the Software as a Service model, with an ever-increasing number (49%) placing it at the top of their technological priorities. Regardless of company size, SaaS sales now account for 37% of French software sales, up from 32% in 2017, and even from 17% in 2014! This underlying trend is mainly illustrated by the current and future domination of subscription-based contracting.
Recruiting new talent: an imperative to sustain growth: in 2018, the workforce of French software publishers grew strongly: almost 14,800 jobs were created, representing growth of 8% for the panel as a whole and 7% among pure players. Since 2016, the number of employees at French software publishers has even risen by 16%, supporting their growth targets, and by 50% in companies set up less than 8 years ago. However, recruitment difficulties, which have been reported for several years, persist, particularly for developer profiles. For three quarters of software publishers, this shortage of talent is an obstacle to their development, despite the use of various loyalty-building tools (salaries, bonuses, positioning, etc.).
Innovation, the key success factor for French software publishers : the publishers surveyed invest heavily in R&D, and this trend has been growing for the past two years. 14% of sales generated by the sector are invested in R&D, compared with just 10% two years ago. Among pure players, this proportion rises to 18%. However, the associated workforce is stagnating, representing 17.7% of employees across the panel as a whole – 33% among pure players.
Cybersecurity and cyberattacks: With data protection at the heart of the news, publishers were asked about their hosting solutions. External hosting remains the preferred approach: 36% of editors host their data in a partner datacenter and 33% with a Cloud provider, while 26% do so in-house and 5% with the customer. In terms of cyberattacks, 52% of publishers also say they have already faced attempted intrusions into their systems, including 24% in 2018 alone, illustrating the importance of securing networks.
2019 trophy winners
Hosted by Florence Haxel, entrepreneur and digital transformation manager, the ceremony honored five publishers:
2019 SaaS Growth Trophy, awarded to Mirakl, publishers of marketplaces solutions.
2019 International Trophy, awarded to Algolia, a customizable search engine marketed in cloud mode.
2019 Innovation Trophy, awarded to Payfit, online payroll and human resources management software.
2019 Video Games Trophy, awarded to Voodoo, a French publisher of video games for iPhone and Android mobiles.
2019 Jury Prize, awarded to Shift technology, a company developing automatic fraud detection technologies for insurance companies.
Congratulations to all the winners, and see you next year!
Jean-Christophe Pernet, EY partner in charge of the study, comments: “Once again this year, the software publishing sector stands out for its dynamism. The growth recorded in 2018 on the panel of our panorama, although more moderate than the previous year, positions the sector among the most successful, capable of bringing out nuggets competing on the international scene and raising significant funds. As proof of this, the recently published Next40 index includes more than a third of software publishers.
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“Once again, our overview of French software publishers illustrates the dynamism of our industry. Our companies’ sales have now reached €16 billion, and we’re convinced that they still have strong growth potential. Whatever their size, business model or specific characteristics, Syntec Numérique is there to support them in their growth and help them face up to difficulties. Whether it’s the talent shortage affecting the sector, or the latest innovations, we want to offer publishers a unique framework for sharing best practices and meetings, and hope to contribute to their growth for many years to come!” says Gilles Mezari, co-president of Syntec Numérique’s Publishers College.
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