Degree of Internationalization and Target Markets Figure 15: Distribution of international revenue
Internationalization of Swiss Software Companies
14.5% of the revenue of the Swiss software industry comes from countries other than Switzerland. Germany remains the most important export market by a wide margin. More than 45% of the export revenue comes from Germany. North America is now the number two export market for Swiss software companies (2017: 9.9%, 2016: 6.7%). Switzerland’s neighboring countries France (8.0%), Italy (6.4%), and Austria (5.5%) remain important export markets. The large export shares to the U.K. (6.3%) and Luxembourg (2.1%) are also striking. They can be traced back to a few software companies that specialize in solutions for the financial services industry. Software products and services are not only increasingly exported, the value chain is also internationalizing. Accordingly, Swiss software companies increasingly employ employees abroad (see Figure 16). While the foreign workforce is growing at faster pace than the local workforce, there are no signs that this growth is reached by shrinking the local workforce. The growth of the domestic workforce of those companies that outsource is equal to the growth of those companies that exclusively rely on Swiss employees.
Growth of Headcounts Figure 16: Percentage of growth in headcounts of employees in Switzerland and abroad
Outsourcing in the Swiss Software Industry
A major trend in the IT industry is outsourcing, i.e., the development, improvement, and operation of IT products and services through external vendors. The SSIS 2017 for the first time analyzes outsourcing in the Swiss software industry. Our results show that the propensity to outsource is highest among software integrators. More than 50% of those companies affirm to outsource. They are followed by standard software manufacturers (~40%), consulting companies (~34%), custom software manufacturers (~23%), and technology and service providers (~13).
Outsourcing Yes—No Figure 17: Percentage of companies that outsource by subindustries
What is Outsourced and to What Extent?
Different activities are outsourced to different extents. About 6.1% of all operation activities and 5.3% of development activities are outsourced—whereas “planning”, “organization”, and “project management” are only outsourced to a very small extent (all<3%) (see Figure 18). To a large extent these low numbers can be explained by the fact that many companies do not outsource at all. Figure 19 shows the extent of outsourcing by activities of only those companies that do outsource. This changes the picture dramatically: Companies that outsource, outsource 17.3% of development, and 16.6% of operations.
Extent of Outsourcing in the Swiss Software Industry Figure 18: Percentage of outsourced activities for all software companies
Extent of Outsourcing in the Swiss Software Industry—Outsourcing Companies Only Figure 19: Percentage of outsourced activities for those companies that outsource
Locations of Outsourced Acivities Figure 20: Percentage of onshoring, nearshoring, and offshoring by activities
To Which Locations do Swiss Software Companies Outsource?
For most activities the top outsourcing destination is Switzerland. Planning, organization, and project management are first and foremost sourced to service providers in Switzerland (all >74%) (see Figure 20). The notable exceptions are “operations” and to an even stronger degree “development”. Only 30% of development activities are sourced to Switzerland while 46% are nearshored, and 24% offshored. We also asked participants to name the top outsourcing countries. Again, Switzerland reached the top spot, followed by Germany, India, Rumania, Ukraine, Russia, and Vietnam (see Figure 21). Overall, Western European countries dominate this list (>45%), followed by Eastern European (>30%), and Asian countries (>10%). Southern Europe and the rest of the world are of minor importance.
The Most Popular Countries for Sourcing Figure 21: Percentage of companies that mention the following countries as favorite sourcing destination
Quelle: Swiss Software Industry Survey 2017 (S.16-21)