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R&D rises, but profits fall in French software industry

"Software made in France" is a concept which seems to be working, says a new study, driven by SaaS and the cloud. CXP has published the tenth edition of the Truffle 100 France, with a list of the top 100 French software vendors (excluding video games, music and e-commerce), published by Truffle Capital and created by the analyst firm and consultancy software.

“Business is currently facing a major challenge: that of 'digital transformation' and the practical implications of this change on its operations and methods,” explains Laurent Calot, CEO CXP group. “In recent years, there has emerged a multitude of technologies that are available and translated into marketable solutions: Software as a Service (SaaS), mobile applications and the concept of Data Mobility, paperless processes, Big Data , business and new collaborative approaches using social networks, collective intelligence, the Internet of Things, geolocation ... and of course, the cornerstone of the whole - cloud.”

To meet this challenge, the old walls between publishers, integrators, hosting providers and IT services are being dissolved, and there arises gradually an entire ecosystem of suppliers, he says. Cloud reshapes the software landscape: new players are positioned on the many possible variations of SaaS offering specialised online services that will enrich a more "hybrid" information system.

The "cloud brokers" are newcomers in the world of publishing software and offer promising perspectives. “We have entered a new era where the world of software and digital technology is changing the face of the traditional enterprises, their ways of working, producing and marketing, their relations with their employees, their customers, with the market. We finally enter the digital age. "

Among the key findings of the Truffle 100 France: is that this is a job-creating sector. The total number of companies rose this year, and staff numbers moved from 75,910 employees in 2012 to 78 800 in 2013 (+ 3.8%). Actual R & D, with 15,000 researchers, now forms 19% of the total, against 18% in 2012, a return to the 2011 level.

Total turnover grew from € 9bn in 2012 to € 9.3bn in 2013, but the French publishing market software remains concentrated with the top five vendors ranking representative in fact 53% of overall turnover. The leading company, Dassault Systèmes, totals some 30.3% of turnover.

There was a fall in profitability: net income was €604m in 2013 against € 693 million the previous year. The rate of return went from 8% of sales in 2012 to 6.4% in 2013, a decrease of 20%. Profits are better distributed, however: the top five publishers in the Truffle 100 France had in 2013, 68% of sales (45% in 2012) and the first three 50% (56% in 2012).

The two main geographies stay the same, the Ile de France has 82% of products, 84% of employees and 81% of the workforce R & D; and, a long way behind, the Rhone-Alpes region with 8% of software, 7% of the workforce and 8% of R & D.

According to the software companies, the main public measures to promote the development of the sector are the development of venture capital (cited by 56%), the Research Tax Credit ( 50%), the Small Business Act (35%), the European R & D (33%), and finally the patentability of software (8%). The Truffle 100 France is a barometer published by the firm Truffle Capital, a European venture capital company, and directed by the group CXP ( The ranking is generated based on the data provided by companies, supplemented if necessary by elements from complementary sources.