Over the past fifteen years, growth within France’s digital technology sector has experienced a consistent slowdown. This trend was already identified last summer by PAC, which noted that while activities related to software publishers and cloud platform providers remained robust, the overall pace of expansion was diminishing. The slowdown predominantly affected service-oriented sectors, following two challenging years during which companies struggled to recover from the pandemic-induced investment lag. During the COVID pandemic years, many businesses had to accelerate their digitalization efforts to catch up on delayed investments. Now, the primary barriers to growth are not a lack of resources but broader economic uncertainties and a scarcity of new business opportunities.
A deeper look into the 2024 financial results confirms this pattern. The total revenue generated by French IT Service Providers (ESN – Entreprises de Services du Numérique) has increased by only 0.3% compared to 2023. More strikingly, if we focus solely on the top ten firms, the growth rate turns negative, standing at -0.2%. This decline reflects a noticeable slowdown in corporate investments, especially among the country’s largest clients like Airbus and Stellantis, both of which are key customers for Capgemini, the leading firm in this sector. Despite remaining at the top, Capgemini’s revenue has dropped by 3%.
Other major players are also feeling the pinch of softer investments. Notably, Accenture (ranked third) and Atos (fifth), with respective declines of 3% in their Tech Foundations and Eviden units, face tough market conditions. However, there are exceptions. Sopra Steria (second), buoyed by its recent acquisition of CS Group, has experienced a significant growth of 6.4%. Similarly, Orange Business (ranked fourth) has posted a substantial double-digit rise of 7%, driven largely by growth in cybersecurity, which has seen an 8% increase and generated approximately €280 million in revenue this past year.
Rankings among the top 10 also reveal varied performances, with results ranging from a 4% decline to a 4% increase, except for Neurones, which has achieved an impressive 9% growth. Neurones, just two years in the ranking, is noted as one of the most successful ESNs over the past decade in terms of sustained growth.
– Capgemini: 10%
– Sopra Steria: 6.4%
– Accenture: 5.4%
– Orange Business: 5%
– Atos: 4%
– CGI: 3.6%
– Inetum: 2.4%
– IBM: 2%
– Neurones: 2%
– Thales: 1.6%
Looking back at recent years illuminates the shifting landscape. In 2023, the top 10 experienced an 8.3% growth, surpassing the market’s overall expansion of 4.6%. CGI stood out, achieving a 19% increase, largely propelled by acquisitions such as Umanis and Harwell, which elevated its position. Sopra Steria followed with a 13.5% growth, and Accenture and Neurones both grew by over 11%.
In 2022, the sector’s growth was more robust, reaching 6.6% overall, a level reminiscent of pre-financial crisis periods. The top 10 firms collectively expanded by nearly 11%, with Accenture’s remarkable 23% increase reflecting its strong performance across EMEA and global markets, with growth rates of about 26% and 29%, respectively, that year.
The year 2021 marked a return to growth following the pandemic’s initial shock, with total industry growth at 4.6%. Large companies benefited from the scaling-up of digital initiatives and the launch of major transformation projects, which fueled a 5.1% increase in the top 10.
Looking at the broader European, Middle Eastern, and African (EMEA) region, the top service providers show similar mixed results. Accenture holds a 6.3% market share but experienced modest growth of 2.5%. Meanwhile, Capgemini’s share stands at 4%, but its growth dipped slightly into negative territory at -0.5%. Tata Consultancy Services (TCS) is holding a 2.9% share, with a solid 4.5% growth rate, and IBM has a 2.8% market share with a modest 2.5% increase. Some firms, such as Atos and DXC, showed declines of 5% and 2%, respectively, while others like Deloitte and NTT Data posted positive growth.
Globally, the most influential IT service players continue to be led by Accenture, with a 5.7% market share and 3.5% annual growth in local currencies. TCS and IBM also hold significant positions, at 2.8% each, with TCS growing by 4% and IBM maintaining steady performance. Deloitte’s global presence accounts for 2.5% of the market, with a 2% increase, and other notable names include NTT Data and Capgemini. Interestingly, while some companies saw declines, others experienced solid growth, illustrating the uneven recovery in the sector worldwide.
It’s worth highlighting that in the cybersecurity segment, Orange Business was once again a leader in 2023, with an 8% increase and a revenue of €280 million. Other major players, like Atos, Thales, and Capgemini, also reported strong performances with double-digit growth figures in this specialized area, underscoring the increasing importance of security services in the digital landscape.
In summary, the French digital services market continues to face headwinds, with growth rates stagnating at best and declining at worst, particularly among large enterprises and key clients. While some companies are managing to expand through acquisitions, strategic diversification, and strong vertical growth areas such as cybersecurity, the broader market environment remains challenging, characterized by economic uncertainties and cautious corporate spending.
This evolving landscape underscores the importance for companies in the sector to innovate, adapt, and seek new opportunities in emerging digital fields to sustain growth amid a cautiously optimistic but hesitant economic climate.
