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Italian Market Environment

With a value of aproximately 20 billion euros Italy is the forth largest IT market in Europe - after Germany, UK, and France (according to Assoinform, the 2003 total was 19.4 billion EUR). Selling software in Italy is often difficult. Typically, the Italian companies do not have a strong IT culture, they are very costs concious and they have a high an aversion to trying new and in their eyes risky IT solutions. The typical Italian business executive/decision maker dedicates his attention to the commercialization of his own product and on relationships in general and secondly on cost reductions. The majority of the executives have a low level of knowledge regarding IT and rarely view it as strategic IT Projects may be seen as a necessary evil and are approved only after it is painfully obvious that something must be done and an investment is unavoidable.

Tried and Tested:

As already stated, the IT decision makers in Italy tend to be risk adverse – that is they are more afraid of making a mistake than building a truly innovative solution. This leads them to choose the large software and service vendors. IBM has traditionaly had a very large presence in Italy. Microsoft has a very good reputation/acceptance in this market. Unlike in the US, from quite early on, Microsoft in Italy has been considered as a valid 'Mission Critical' and enterprise class solution.


Notwithstanding the difficult environment, new software and innovation do find their ways in the Italian market, and once introduced, these new software companies can build a momentum and have an extraordinary success. Some examples of this dynamic are JDEdwards ERP, IBM mainframes, and more recently emerging MS Biztalk server. In each case, the sales in Italian leads that of each other European country. These are cases of a virtuous cycle being created: a)an initial critical mass of customers is formed via the salesman’s relationships and a targeted, value based marketing and sales efforts. b)included in the early customers are several key lead customers who are highly regarded ‘model’ companies and whose practices are copied within their peer group. c)technical support, plus continued marketing and sales efforts continue the positive dynamic and the particular solution becomes the standard solution and achieves a particularly high penetration percentage.

An Approach for Successful Software Introduction into the Italian Marketplace:

The Italian market is based on relationships. A slightly inferior product which is presented to the customer by a salesman with the right contacts will inevitable 'win'. In-house IT departments tend to be weak especially regarding new software technologies. The local 'software houses' tend to have a very influencial role in proposing new software. A high level of credibility is gained by creating an Italian office. The commitment of local direct presence and a strong partner network are often necessary. The sweet spot of the market is the large number of medium sized companies. An economic and effective marketing strategy capable of reaching these diverse and ‘hidden’ companies is essential. The concrete value of the product must be clearly perceived. Budgets – especially discretionary budgets tend to be very limited. Establishing the correct entry product offering and price point are critical. Creating referencible customers in target vertical clusters is an important accelerator.