Top 250 panorama of French software publishers. A resilient, high-performance sector, forecasting growth in excess of 10% by 2022

French software publishers reported a 10.5% increase in sales in 2022, despite the slowdown in economic growth that followed the recovery of 2021. Thanks to this exceptional performance, the 275 companies in the Top 250 panorama produced by Numeum and EY achieved sales of €21 billion, compared with €19 billion the previous year. This strong growth was driven by all the publishers on the panel, 91% of whom reported a better performance than in 2021. This notable increase is due to two factors: Dassault Systèmes, the panel leader, recorded sales growth of 0.7 billion euros, and at the same time, sustained growth of 9% for the rest of the panel. This dynamic performance was observed across all vendor sizes.

Innovation and upselling, new growth levers: despite an economic context marked by inflation that is taking a long-term hold, more than half of software publishers (54%) have not passed on the rise in energy and wage costs in their sales prices. The latter are relying on new growth levers such as innovation, with the proposal of new solutions (one of the three priorities for 61% of them), upselling (64%) and partnerships (40%).

A sustainable business model : 80% of software publishers surveyed recorded an operating profit in 2022. This percentage is close to that observed in the previous edition, illustrating the remarkable ability of software publishers to establish a sustainable, high value-added business model.

Software publishers are stepping up their CSR strategy : corporate social responsibility has become a priority issue for 75% of the publishers on the panel, and just as many have initiated a structured CSR approach (up 13 points on last year). To date, almost 30% of publishers have a CSR label or are in the process of obtaining one, and 44% have carried out a carbon audit.

While the level of internationalization remains relatively high and stable over the past 6 years at 58% of sales, it is dependent on company size. Software publishers with sales in excess of 100 million euros will continue to expand geographically, with 64% of sales generated outside France by 2022. The situation is more contrasted for companies with sales of less than 50 million euros: some are very early adopters of international development, while others are concentrating on the French market, with less than 30% of sales generated abroad on average.

External growth, a confirmed lever for development: despite the uncertainties surrounding the macro-economic environment, 53% of publishers plan to carry out an operation in the future, a figure unchanged from last year. Publishers are keen to expand their international footprint, with over 50% of the panel targeting foreign markets for their next acquisition.

Self-financing remains a key asset: it is the main source of financing for 91% of French software publishers (+2 points on last year). This is followed by debt (71%) and private equity in France (32%). In 5 years, private equity deals have changed significantly, with an increase in financing rounds over €100m: 13 rounds in 2022/2023 compared with 1 in 2017/2018.

The rise of SaaS: a historic threshold has been crossed, with more than half of publishing sales (56%) generated in SaaS mode for the first time, an increase of 7 points compared to 2021 (45%). While 54% of publishers consider cloud and SaaS to be their top technological priority, security continues to make headway. Security is now the top technological priority for 16% of publishers, compared with 13% a year earlier.

The breakthrough of AI : 58% of software publishers consider artificial intelligence to be one of their top three technological priorities, up 19 points on the previous year. This increase should be seen in the context of the emergence of generative AI solutions, which have revolutionized the software sector over the past twelve months. Software publishers are seizing on these solutions both for their own internal needs and to integrate them into their solution offerings.

Talent continues to represent a key resource for software publishers: headcount continues to grow (+6% for the panel as a whole, as for pure player publishers), a sign of the sector’s good health and dynamism. Headcount growth is set to continue in 2023, albeit to a lesser extent, with 76% of software publishers planning to increase their workforce in 2023, compared with 86% last year. However, recruitment difficulties persist: 84% are facing recruitment problems.

R&D is the main growth driver : one third of the total workforce is dedicated to R&D, and spending in this area represents 24.5% of sales. This R&D commitment is observed irrespective of the size of the publisher. In addition, the French government’s tax incentives help to ensure that R&D is firmly rooted in France. Thus, 64% of the panel’s R&D staff are located in France (compared with 61% in the 2022 panel).

Cyber-attacks: a persistent threat that continues unabated: 53% of publishers on the panel have faced several intrusion attempts on their IT systems since January 1, 2022, compared with 49% in 2021. Phishing (83%) and malware (61%) are the main attacks encountered. Against this backdrop, publishers prefer to outsource data hosting to specialists, so they can concentrate on their core business and protect themselves against the risk of cyber-attacks. 84% of them use external datacenters or cloud providers.