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
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
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
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
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
An Approach for Successful Software Introduction into the Italian
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