IT services shrink in austere Hungary

The Hungarian IT services sector is expected to shrink significantly as the consequence of the austerity measures imposed by Hungarian government and reduction in financing by the EU, says researcher Pierre Audoin Consultants (PAC).

Also, the hardware maintenance sector will suffer a large reduction as the companies need to cut their expenditure. “Though an important part of the IT organisation’s role, spending on hardware maintenance has declined as a consequence of equipment becoming increasingly reliable,” explains Partner Consultant at PAC Eastern Europe, Madalin Dobre.

The project services segment has been historically strong market in Hungary, with the average higher market share than in Western Europe. However, this segment has been largely hit by the freeze in the public sector, according to PAC. This has been particularly visible in the SMBs area and therefore many IT projects were put on hold.

On the positive side, Hungary sees the outsourcing sector to grow over the next couple of years. The new trend indicates also that local companies start to consider outsourcing externalisation.

PAC estimates that the public sector in Hungary will continue to account for the biggest share across the software and IT services industry.