Data center, server room
Strong demand: IT and software accounts for 19% of this year’s FT 1000 ranking of Europe’s fastest growing companies © (c) Raagoon |

As companies tackle digital overhauls of their businesses — from homeworking to customer relationship management — they are inc­reasingly relying on external providers for information technology services and advice.

European companies and public sector organisations are set to spend $1.1tn on IT this year, up 9 per cent from 2023, according to research company Gartner.

And it expects the biggest increase to be in spending on software and IT services.

This uplift comes as the technology industry has been battling a global downturn. Venture capital investment in European tech companies almost halved, year on year, in 2023, but some analysts are now detecting the recovery.

Demand for digital business services remains strong, as shown by the proportion of IT and software companies in this year’s FT 1000 ranking of European businesses by revenue growth: they account for 19 per cent. That is double the representation of the next largest industry: construction and engineering.

UK software group Solidatus, which helps companies manage their data, is ranked 91st. It was founded by two consultants who had become frustrated with delays to client projects because of problems with poor-quality data. 

Since its launch in 2017, Solidatus has grown fast and posted revenue of more than €10mn in 2022, up from €580,000 in 2019. This has been driven by a buoyant market for business tech and some large corporate customers.

Solidatus specialises in financial services, where complex and costly regulations on anti-money laundering, for example, require heavy investment in technology.

Some of the largest banks spend billions of dollars on technology each year. Large projects may be driven by the need to comply with new regulations or to retire old IT systems and replace them with cloud-based alternatives.

Either way, they can “cost financial services firms hundreds of millions of dollars because of the number of impacted information systems and complexity of their data architecture”, says Mary Anne Bullock, vice-president of strategy at Solidatus. Automating much of the data analysis in such projects can save time and money, she explains.

Solidatus’ clients currently include banks Citi and HSBC, which are also investors in the group. It has begun to expand outside Europe, opening a US base in 2022.

Spending on digital services is particularly buoyant in financial services, experts say, due in part to rising interest rates boosting margins for banks — creating surplus cash for them to spend on IT.

Heads of IT in large financial services companies “have more freedom and ability to spend money”, says Vinoth Jayakumar, a partner at Molten Ventures, a UK venture capital firm that invests in European tech start-ups.

Helping remote workers to collaborate on projects is another growing market.

Here, AMX, a German software reseller and consultancy ranked 122nd in the FT 1000, advises customers on how to use two online software products: Smartsheet, a platform that helps companies automate tasks, track progress and manage content; and Miro, a digital whiteboard with more than 60mn users in 200,000 organisations including Nike, Ikea and Deloitte.

Founded in 2017, AMX grew its revenues to €6.9mn in 2022, from €477,000 in 2019.

Such software is part of the new and growing sector of “collaborative work management”, where providers inc­lude Asana and About 70 per cent of AMX’s sales are in Europe, to clients such as Swiss drugmaker Roche and German online food delivery group Delivery Hero. The remainder are in the US and Canada.

“Customers tell us they have specific business challenges [such as] ‘I need to build a new factory in a new country, how can we organise it?’,” says Sebastian Paasch, AMX managing director.

For example, when Holzindustrie Torgau (HIT) a medium-sized German timber products manufacturer, need­ed software to improve the management of projects, it hired expertise from AMX.

HIT, acquired by Mercer International in 2022, had a “very small” IT department,” says Thassilo König, HIT’s interim manager for digitising and restructuring when, in 2019, it hired AMX to help it switch to Smartsheet software and fill workforce skills gaps.

“In times of skills shortages, it is difficult to find or build up suitable [IT] resources, especially in locations outside of major cities,” he points out.

But, in spite of this demand for IT support, the market appears to be tightening. At AMX, clients are taking longer to sign deals and they negotiate harder. New customers “negotiate more for discounts,” says Paasch. “If you have a renewal after one year . . . the finance team is more involved, they say: ‘Hey, we can’t pay so much anymore’,” he notes.

AMX is looking to add partners to maintain growth. Paasch also points to artificial intelligence as “a big opportunity and a big risk”. The company is exploring how best to use AI to improve its services.

“In theory, [in] five years, perhaps you don’t need a consultant like us, because everything can be done with AI,” he says. But customers will always need “some very educated, skilled people. And we want to be these people.”

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