The Greek enterprise software market is estimated to be worth €400 million and, according to industry experts, it is expected to double in the next 5 years to reach €1 billion. This is mainly investment in software products by companies in the public and private sectors.
As executives in the field note, the growing digitalization needs of companies, combined with the requirements of the legal framework (e.g. mandatory receipt of electronic invoices from more and more public bodies, ERP interface with POS card payment systems, expanding the requirement to use the digital card, etc.) constantly create new needs and increase the demand for enterprise software products and services.
For example, a significant part of the expenditure in the financial sector now concerns the improvement and enrichment of online and mobile banking services, as the reduction in the physical branch network of banks is too great. In addition, there is an increase in the demand for services related to process automation in order to improve overall performance and reduce costs.
In the small and medium-sized business market, a significant number of companies still operate with outdated software solutions or products from much smaller companies. These solutions are technologically backward, as they do not support databases, mobility, analytics and do not use the Internet.
Having now created a critical mass of companies that have already invested in modern ERP, CRM, Mobile and WMS systems, it is expected that in the coming years the remaining companies will follow the same trend of changing their information systems.
According to the multiannual financial framework 2021-2027, i.e. the long-term budget of the European Union, to fill the current gap in digital investments, a new programme will be created with the aim of digital transformation of public services and businesses, by stimulating first-line investments in high-performance IT and data, artificial intelligence, cybersecurity and advanced digital skills, as well as the large-scale deployment of digital technologies in various sectors of the European economy.
The software and IT market
The national Software and IT Services market has shown a notable increase in value over the last three years (2021-2023), registering an average annual variation rate of 9.8%. In 2022, the Software and Services market overall grew 12.3% compared to the previous year. For 2023, a new increase of 6.0% is estimated compared to 2022.
However, the largest share of the total value is occupied by IT Services with a percentage of 62% and the remaining 38% concerns the purchase of Software. The Software market share increased by 17% in 2022 compared to the previous year, while for 2023 the growth rate is estimated at 10%. The IT services market has also strengthened in recent years, registering an annual growth rate of 10% in 2022 compared to 2021. Thus, in 2023, the market is estimated to increase, but at a lower rate (4%).
Focusing on the software market and analyzing its two individual sectors (Application Software and Systems Software), it can be seen that Application Software covers the largest percentage of the market over time. In 2023, it is estimated to cover 72% of the total. Application Software has seen significant growth in recent years, with 2022 recording a 19% increase compared to 2021 and an additional 11% increase estimated for 2023. Systems Software captures the remaining 28% of the market, and the sales value has seen a slower rate of increase compared to its Application Software counterpart. In particular, in 2022 this specific market recorded a 13% increase, while for 2023 it is estimated to increase by 8%.
According to this data, the sector is experiencing strong mobility of acquisitions and mergers, creating additional investment goodwill. In fact, based on recent data, the acquisition of Entersoft by the Olympia group was the largest acquisition in the technology sector in the first half of 2024 in Central and South America. Europe and the 8th largest regardless of the sector.
Secure Operations Center SOC and Cybersecurity Policy NIS2
As the deadline for compliance with the NIS2 Directive approaches on 17 October 2024, Greek organisations, both public and private, must act immediately to ensure they are adequately prepared. The European Union’s new NIS2 Directive (Network and Information Security Directive 2) aims to create a high and common level of security for all EU countries, offering a stronger framework for the protection of critical infrastructures, both at public and private level.
The NIS2 Directive concerns a wide range of sectors, such as energy, transport, healthcare and public administration, for real-time monitoring of security gaps (malware, updates, backups, etc.). NIS2 is a decisive step towards strengthening cybersecurity in Greece and throughout Europe. Technologies such as network traffic monitoring (network monitoring) and event monitoring (event monitoring), as well as the ability to provide SOC Secure Operation Center services, open up a new round of multi-million-dollar investments.
The NIS2 Directive concerns all medium-sized enterprises (employing between 50 and 250 workers and having a turnover of up to 250 million euros) or large companies active in the sectors of Energy, Transport, Health, cloud services and data centers, telecommunications, food production and distribution, production of chemicals, pharmaceuticals, sewage and waste management, courier companies.
Regardless of their size, it applies to providers of public electronic communications networks or publicly available electronic communications services, trust service providers, top-level domain name registries and domain name system service providers. It also concerns central government, regions and municipalities. As the executives in the field in “N” emphasise, investments in the area of cybersecurity take on other dimensions, since the protection of digital data is considered a prerequisite even for additional financing of a business.
Issues such as corporate compliance with cybersecurity rules, which is the beginning of everything, remote access, certification of employee training in cybersecurity matters and monitoring of security efficiency are still uncharted territory in Greece.
Neo – Challenger banks and fintech, new round of money and investments
In the emerging market of Neo and Challenger Banks and Fintech, banks as well as technology start-ups are focusing, opening a new round of money and investment. The revenues of the international Neo and Challenger Bank market are expected to reach 325-463 billion. USD by 2028, showing a CAGR of 15.0% from 2022 to 2028. There are about 100 banks worldwide, offering different types of financial services and digital forms of money management.
In Greece, according to the Bank of Greece’s Fintech Innovation Hub 2023 Annual Report, from 10 April 2023 to 9 April 2024, the hub received a total of 12 applications, of which 75% came from start-ups or individuals looking to set up a start-up, and the remainder came from established companies and individuals. Since its launch in March 2019, the hub has received a total of 100 applications. According to the analysis of the data, the presentation of an innovative product or service as well as the expansion of possible synergies constituted the majority of applications, which in 2023 were double the number of 2022.
Most of the requests were in the payments area, followed by requests related to cryptocurrencies, requests related to regulatory technology companies, supervisory technology solutions, financing, banking services and next-generation MFIs. Artificial Intelligence technology also features at 27%.
Greek tech ecosystem, outflows worth €1.24 billion in 2024
The Greek tech ecosystem is growing, Endeavor highlights in its recent report entitled “Greeking Out 2.0”, screened in the 2024 Reports. In Greece, the tech startup ecosystem in 2021 saw 6 exits worth €200 million (including Moosend and Lenses), in 2022 17 exits worth €300 million, including Accusonus, Pollfish, Transifex, in 2023 it saw 10 exits also worth €300 million, including MarineTraffic, Levantamento, DeepSea.
So far, 2024 has seen two exits with a total valuation of $1.24 billion, including InAccel and BETA CAE. Over time, the top exits include InstaShop, Pollfish, Augmenta, inaccel, ThinkSillicon, Accusonus, MarineTraffic, deepsea, BETA. This year, 2024, we have seen high-value dynamic disruptions, but with a small number of companies, which means fewer exits but high valuations.
There are 7 Greek VCs looking at Greek startups. VENTURE FRIENDS, with €90 million investment funds, has 73 investments, GENESIS VENTURES, with €25 million investment funds, has over 30 investments, METAVALLON, with €32 million investment funds, has over 25 investments, BIG PI VENTURES, with €50 million investment funds, has over 25 investments, MARATHON VENTURE CAPITAL, with €70 million investment funds, has over 22 investments, UNI.FUND, with €50 million investment funds, has over 24 investments, 5G VENTURES, with €101 million investment funds, has over 9 investments.