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- One of the few sectors to have come out on top in the downturn – IT – has sustained the national economy in 2020. The figures reflecting the business of these companies are on the plus side: IT is a sector that ended the first year of the pandemic with higher turnover than in 2019, rising profits and more employees. Companies in the sector were almost 4,000 employees ahead at the end of 2020.
- Large companies have plans for 2021 to hire hundreds of people each, industry players say, and there are constantly firms looking to enter the Romanian market and open subsidiaries in the country. On the other hand, there’s a serious shortage of specialists and Romania doesn’t have much of an IT market yet.
- We present below the ranking of the largest companies in the sector, according to turnover, the ranking of the most profitable companies in the sector and the top of the largest employers, as they emerge from the data sent to Economedia.ro by representatives of the National Trade Registry Office. The management of the Employers’ Association of the Software and Services Industry also gives us an outline of the sector for 2021 and explains how IT firms have come through the pandemic with a plus in business.
In 2019, Romania had 18,183 companies with CAEN belonging to the IT sector – with CAEN 62 – information technology service activities, while in 2020 their number increased to 19,809. The turnover achieved by these companies has also increased: from 29.5 billion lei to 32.4 billion lei, as well as the profit: from 3.9 billion lei achieved in 2019 to 4.7 billion in 2020. The IT industry has been employing steadily and this is also seen in the figures declared to public institutions: the number of employees reached 113,240 in 2020 from 109,325 in 2019. Companies in the sector therefore had almost 4,000 more employees at the end of 2020 compared to the previous year.
The total figures could be even higher, given that the current ranking does not include a company that in the previous year (2019) was ranked 3rd in the top. This is Vitesco Technologies from Timis (turnover 859 million in 2019), which has not yet submitted its financial data for 2020. Another large company is missing from this ranking – Bitdefender, which has declared as its type of activity one of the other CAEN code categories than those analyzed in the ONRC data – Publishing activities of other software products (5829). The company achieved in 2020 a turnover of 869 million lei, a profit of 140 million lei and had 1354 employees, according to mfinante.ro.
The figures presented in the rankings were provided at the request of Economedia.ro by the National Trade Registry Office from data received from the Ministry of Public Finance on the annual financial statements filed by legal entities registered in the trade register with the territorial units of the Ministry of Public Finance. The last financial data collection for 2020 is dated 02.08.2021. Please note that the data refer only to companies that have filed financial statements for the previous year.
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Top biggest IT companies
The ranking of the most powerful companies in 2020 is led by IBM Romania, which last year approached a turnover of 1 billion lei – more precisely, it recorded a turnover of 952.44 million, with a profit of over 77 million lei and 3,291 employees. IBM is also the company in the top 10 with the most employees. Oracle Romania, Ericsson Telecommunications, Endava Romania and ATOS IT Solutions and Services follow in the top half of the ranking, followed by Liciuchiciu Web Design, Microsoft Romania, Oracle Global Services, Cognizant Technology Solutions and Amazon Development Center.
Four of the companies are classified under “Information technology consultancy activities” (CAEN 6202): IBM, ATOS IT, Microsoft and Oracle. The others have “Custom software development activities (client-oriented software)” – CAEN 6201.
Note that one of the companies in the ranking is insolvent: Liciuchiciu Web Design from Bihor. Although it has a turnover of 537 million lei, it is now listed with 0 profit and only one employee.
Most of the companies are based in Bucharest, but there are a few exceptions. Cluj has two companies in the ranking: Endava Romania and Cognizant Technology Solutions, Iasi is in the top thanks to Amazon Development Center, and Bihor has only one company, the one that went bankrupt: Liciuchiciu Web Design.
The previous year, in 2019, the ranking by turnover was slightly different, with some companies leaving the Top 10 in the meantime: Oracle, IBM, Vitesco Technologies, Ericsson, Endava, Atos IT Solutions, Microsoft, NTT Data, Cognizant Technologies, Luxoft Professional.
Most profitable IT companies
In terms of profit, the ranking is led by ATOS IT Solutions and Services, with 119 million lei, by far the most profitable company in the sector in Romania. Next come IBM (77 million lei) and Endava (73 million lei).
The biggest employers in 2020
The companies in the Top 10 have a combined total of 24,355 employees, accounting for about 20% of all employees in the industry.
The largest company in Romania by number of employees is IBM, with 3,291 people, closely followed by Amazon in Iasi, with 3,209 employees and Endava in Cluj, with 2,965 employees.
Gabriela Mechea, ANIS Executive Director: “We don’t have an internal market / 75% of the industry’s revenues are made from exports”
How have IT companies weathered the pandemic, with a plus, and what are the challenges this year? Gabriela Mechea, executive director of the Employers’ Association of the Software and Services Industry, outlines the sector, at the request of Economedia.ro.
Rep: How have companies adapted to the situation generated by the COVID-19 pandemic?
Gabriela Mechea: After the first half of 2020 when, due to general uncertainty, there was a freeze in projects and investments, while all operations were reorganized and fully online, in the second half of the year the IT sector as a whole recorded significant growth, which compensated for the stagnation of the first months. Unlike other industries, in IT most companies already had remote working processes in place and, of course, a significant level of digitisation. These factors have made the adaptation to the new conditions relatively easy and without significant loss of time and productivity.
Rep: What do you expect 2021 to be like for companies active in the IT sector in Romania? Are there still hiring, are there projects? Should we also expect transactions in this market, mergers, acquisitions?
Gabriela Mechea: At the moment, amidst a growing need for digitization both in the public sector and especially in private companies, we notice a huge increase in the need for specialists in companies of all sizes. Large companies have plans for 2021 to hire hundreds of people each, and we are constantly contacted by companies that want to enter the Romanian market and open subsidiaries in the country. We have also seen an increase in the number of mergers and acquisitions, as well as in the amount of money they want to invest. There is no shortage of projects, the great need is for specialists, and not a few firms are finding it difficult to accept new projects due to a lack of staff.
Rep: To what extent is the Romanian market moving from outsourcing to innovation?
Gabriela Mechea: The border between outsourcing and innovation is very fluid. Most local companies develop proprietary solutions, but new products require funding until they become profitable, and part of this funding is provided by outsourcing projects. Some multinational companies also develop new solutions and products in Romania and invest heavily in research locally. I believe that there are very few companies that do only outsourcing or only innovative product development, in fact the two coexist and support each other. This supporting action is not one-sided, the two types of activities share resources of all kinds: financial, specialists who move to different projects as needed, skills that are trained in one area and then used in the other. Outsourcing vs. Innovation is a reductive way of looking at things that doesn’t take into account the reality in companies and the complexity of the technology sector.
Rep: What are the main issues facing companies in this field in Romania?
Gabriela Mechea: The lack of specialists is on the first place. This shortage slows down the sector’s accelerated development and to some extent limits the industry’s ability to contribute with better results to the country’s economic development. The second factor is the lack of domestic digitisation projects. Even though we are a strong country in terms of IT companies, according to the Digital Economy Society Index – DESI 2020, published by the European Commission, Romania is last in the EU in terms of the implementation of digital solutions in society and the digital skills of the population. In short, we don’t have a domestic market, which is why 75% of the industry’s revenues are made from exports. In order to create this internal market, both large-scale digitisation projects in public administration and a national campaign to promote the benefits of digital solutions to companies of all kinds must be launched.
Edited for English