Entering Foreign Markets in the

Information Technology Industry The BECH Index 2014

Whitepaper from TBK Consult

Author
Hans Peter Bech, M.Sc. (econ)
TBK-WIPA-024

 Hans Peter Bech, 2015

Second edition
Unless otherwise indicated, Hans Peter Bech copyrights all materials on these pages. All rights
reserved. No part of these pages, either text or images may be used for any purpose other than
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in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal
use, is strictly prohibited without prior written permission.
The Business Model Canvas Framework is made available by Business Model Foundry GmbH,
Kalkbreitestrasse 71, 8003 Zrich, Switzerland
The copyright of other frameworks and information sources mentioned on this whitepaper belong
to the proprietor.
Published by TBK Publishing (a division of TBK Consult Holding ApS)
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ISBN: 978-87-93116-19-1
TBK-WIPA-024

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table of contents:
Target audience

Abstract

Author

Acknowledgements

Grow fast or die slow

How?

Where?

Table 1: The BECH Index for the Major Markets 2012-14

Table 2: Top 25 information technology countries in the world

Table 3: The BECH Index for the Americas 2012-14

Table 4: The BECH Index for The European Union 2012-14

10

Table 5: The BECH Index for The Rest of Europe 2012-14

11

Table 6: The BECH Index for The Middle East 2012-14

12

Table 7: The BECH Index for Africa 2012-14

12

Table 8: The BECH Index for Asia Pacific 2012-14

14

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About the author

17

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Targeted audience

The target audience for this whitepaper is the board of directors,

the CEO and the sales and marketing executives of B2B
information technology companies with ambitions for achieving
global market leadership.

Abstract

This whitepaper presents an estimation of the relative demand

capacity for B2B software and software related services worldwide.
This estimation is called The BECH Index.
TBK Consult calculates the BECH index annually based on data
published by The Central Intelligence Agency (CIA).
The CIA1 is an independent agency responsible for providing
national security intelligence to senior US policymakers. The CIA
is separated into four basic components: the National Clandestine
Service, the Directorate of Intelligence, the Directorate of Science
& Technology, and the Directorate of Support. They carry out
the intelligence cycle, the process of collecting, analyzing, and
disseminating intelligence information to top US government
officials.

Author

Hans Peter Bech, M.Sc. (econ.)

Acknowledgements

Design and lay-out: Sordako O, Tallinn, Estonia, info@kompot.ee

Proof reading: Emma Crabtree, ecr@tbkconsult.com

www.tbkconsult.com

Source: https://www.cia.gov/about-cia/todays-cia/index.html

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Grow fast or die

slow

The information technology industry is by nature a global industry.

As the information technology industry is blessed with low cost of entry
and simple supply chains, international growth comes much easier in
the information technology industry than in most other industries.

Embarking on the global growth journey is also a necessity in the

information technology industry. The combination of simple supply
chains, economy of scale advantages and crossing the chasm2
characteristics make the information technology industry a winner
takes all game. Information technology companies either grow fast or
die slowly.3

How?

www.tbkconsult.com

See Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive
Products to Mainstream Customers by Geoffrey A. Moore.
Grow fast or die slow April 2014 by Eric Kutcher, Olivia Nottebohm and
Kara Sprague, McKinsey&Company

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

As information technology companies prepare for global growth the

first question to answer is how?
We discuss these issues in the first three whitepapers in this series
named Entering a Foreign Market in the Information technology
Industry4.
We recommend that B2B information technology companies verify the
viability of their business models in their domestic market first.
When growing revenue has been proven profitable, predictable and
scalable then it is time to conquer foreign markets.

Where?

The second question asked before jumping to foreign markets is

Where should we go next?

To help information technology executives making this decision based
on facts rather than emotions, TBK Consult calculates and publishes
the BECH Index annually.
The BECH Index for a country reflects the demand capacity of
the country and thus also reflects the share of global demand for
information technology related products and services.

www.tbkconsult.com

These whitepapers are available for download from www.tbkpublishing.com

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 1: The BECH Index for the Major Markets 2012-145

Region

BECH Share 2014

BECH Share 2013

BECH Share 2012

North America

32.5%

32.5%

32.6%

South America

5.0%

5.1%

5.1%

Americas

37.5%

37.6%

37.7%

EU

23.2%

23.7%

24.7%

Rest of Europe (incl. Switzerland)

5.3%

5.5%

5.5%

Middle East

8.0%

7.8%

7.7%

Africa

1.1%

1.2%

1.2%

EMEA

37.6%

38.2%

39.0%

Australia/NZ

1.8%

1.8%

1.8%

Japan

5.6%

5.9%

6.0%

China

7.2%

6.6%

5.9%

South Korea

2.0%

2.0%

1.9%

Taiwan

1.6%

1.5%

1.5%

India

1.4%

1.3%

1.1%

Rest of Asia

5.2%

5.1%

4.9%

Asia

24.8%

24.2%

23.2%

The World

100%

100%

100%

The world market is divided into 226 countries of which some of the bigger countries must be considered
as several markets. Talking about the US market when you havent won the first customer or independent
channel partner there yet may seem overly self-confident. For most information technology companies, the
US is at least 50 geographical markets, Germany is 14 markets (Bundeslnder), France is at least 4 markets, the UK is 4 markets, the Nordics are 4 markets and so on.
As can be seen from Table 1, world demand is on the move. The Americas has a stable share of world demand, while Europe is loosing its share of global demand. Nevertheless, Europe continues to be a very
interesting area with some of the biggest markets in the world and with a dramatic need for information
analytics, process and cost optimization information technology solutions. The slight growth in the Middle
East has most likely been affected by the changes in the oil prices experienced lately and we should expect
some changes here in the 2015 figures. China continues its growth and is now the second largest information technology market in the world.
These 25 countries make up 85% of world demand for information technology products and services. This
doesnt mean that they are the most attractive markets as other issues than size may play a more important
role.
www.tbkconsult.com

Please note that the numbers in this white paper may differ from the 2013 version since the CIA has
reassessed and revised their national statistics.

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 2: Top 25 information technology countries in the world

Rank Country

BECH Share 2014

USA

China

7,23%

Japan

5,65%

Germany

5,43%

France

3,31%

UK

3,20%

Russia

2,81%

Saudi Arabia

2,68%

Italy

2,40%

10

Canada

2,27%

11

South Korea

2,00%

12

Australia

1,62%

13

Spain

1,68%

14

Brazil

1,67%

15

Qatar

1,46%

16

Taiwan

1,57%

17

India

1,38%

18

UAE

1,23%

19

Mexico

1,22%

20

The Netherlands

1,20%

21

Singapore

1,17%

22

Indonesia

0,90%

23

Switzerland

0,87%

24

Poland

0,76%

25

Hong Kong

0,69%

Accumulated

30,24%

52%
65%
74%
80%
85%

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On the following pages we will list the BECH Index for each country in the world.

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 3: The BECH Index for the Americas 2012-14

Country
USA

BECH Share 2012

30,24%

30,27%

30,34%

2,27%

2,26%

2,28%

32,50%

32,53%

32,62%

Argentina

0,68%

0,71%

0,70%

Belize

0,00%

0,00%

0,00%

Bolivia

0,01%

0,01%

0,01%

Brazil

1,67%

1,70%

1,73%

Chile

0,30%

0,30%

0,29%

Colombia

0,27%

0,26%

0,25%

Costa Rica

0,03%

0,03%

0,03%

Cuba

0,04%

0,04%

0,04%

Dominican Republic

0,06%

0,05%

0,05%

Ecuador

0,06%

0,06%

0,06%

El Salvador

0,01%

0,01%

0,01%

Falkland Islands

0,00%

0,00%

0,00%

Guatemala

0,03%

0,03%

0,03%

Grenada

0,00%

0,00%

0,00%

Honduras

0,01%

0,01%

0,01%

Jamaica

0,01%

0,01%

0,01%

Mexico

1,22%

1,22%

1,24%

Nicaragua

0,00%

0,00%

0,00%

Panama

0,05%

0,04%

0,04%

Paraguay

0,02%

0,02%

0,01%

Peru

0,14%

0,14%

0,13%

Puerto Rico

0,06%

0,06%

0,06%

Uruguay

0,05%

0,04%

0,04%

Venezuela

0,30%

0,34%

0,35%

South America

5,02%

5,11%

5,11%

37,52%

37,64%

37,72%

Canada
North America

Americas

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BECH Share 2014 BECH Share 2013

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 4: The BECH Index for The European Union 2012-14

Country

BECH Share 2013 BECH Share 2012

Greenland

0,00%

0,00%

0,00%

Faroe Islands

0,00%

0,00%

0,00%

Iceland

0,02%

0,02%

0,02%

Sweden

0,66%

0,66%

0,65%

Norway

0,73%

0,74%

0,76%

Finland

0,28%

0,30%

0,32%

Denmark

0,35%

0,36%

0,38%

Germany

5,43%

5,53%

5,76%

Netherlands

1,20%

1,24%

1,32%

Belgium

0,66%

0,68%

0,70%

Luxemburg

0,15%

0,15%

0,15%

France

3,31%

3,45%

3,59%

Austria

0,58%

0,60%

0,63%

Liechtenstein

0,01%

0,01%

0,01%

Italy

2,40%

2,54%

2,76%

Spain

1,68%

1,71%

1,84%

Portugal

0,24%

0,25%

0,27%

UK

3,20%

3,19%

3,24%

Ireland

0,35%

0,34%

0,35%

Gibraltar

0,00%

0,00%

0,00%

Poland

0,76%

0,75%

0,76%

Estonia

0,03%

0,03%

0,03%

Lithuania

0,07%

0,07%

0,07%

Latvia

0,04%

0,04%

0,04%

Czech Republic

0,30%

0,30%

0,32%

Slovakia

0,14%

0,14%

0,14%

Hungary

0,20%

0,19%

0,19%

Bulgaria

0,07%

0,07%

0,08%

Slovenia

0,06%

0,06%

0,06%

Greece

0,23%

0,25%

0,27%

23,17%

23,67%

24,71%

The European Union

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BECH Share 2014

10

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 5: The BECH Index for The Rest of Europe 2012-14

www.tbkconsult.com

Country

BECH Share 2014

BECH Share 2013

BECH Share 2012

Switzerland

0,87%

0,89%

0,89%

Cyprus, Republic

0,03%

0,03%

0,03%

Monaco

0,02%

0,02%

0,02%

Isle of Man

0,02%

0,02%

0,02%

Jersey

0,01%

0,01%

0,01%

Georgia

0,01%

0,02%

0,01%

Andorra

0,00%

0,00%

0,00%

Guernsey

0,00%

0,01%

0,01%

Malta

0,01%

0,01%

0,01%

Croatia

0,06%

0,06%

0,07%

Russia

2,81%

2,92%

2,97%

Ukraine

0,10%

0,12%

0,13%

Belarus

0,10%

0,10%

0,10%

Romania

0,25%

0,24%

0,24%

Serbia

0,04%

0,04%

0,04%

Moldova

0,00%

0,00%

0,00%

Bosnia and Herzegovina

0,01%

0,01%

0,01%

Montenegro

0,00%

0,00%

0,00%

Albania

0,01%

0,01%

0,01%

Macedonia

0,01%

0,01%

0,01%

Kosovo

0,00%

0,00%

0,00%

Turkey

0,94%

0,93%

0,90%

Rest of Europe

5,32%

5,48%

5,49%

11

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 6: The BECH Index for The Middle East 2012-14

Country

BECH Share 2014

BECH Share 2013

BECH Share 2012

Bahrain

0,10%

0,10%

0,09%

Egypt

0,33%

0,33%

0,33%

Iran

0,73%

0,72%

0,78%

Iraq

0,24%

0,27%

0,25%

Kuwait

0,64%

0,66%

0,67%

Lebanon

0,05%

0,05%

0,05%

Israel

0,28%

0,28%

0,27%

West Bank

0,00%

0,00%

0,00%

Jordan

0,03%

0,03%

0,03%

Oman

0,20%

0,20%

0,19%

Qatar

1,46%

1,36%

1,26%

Saudi Arabia

2,68%

2,62%

2,59%

Syria

0,02%

0,02%

0,02%

U.A.E.

1,23%

1,20%

1,14%

Yemen

0,01%

0,01%

0,01%

Middle East

8,00%

7,84%

7,68%

BECH Share 2014

BECH Share 2013

BECH Share 2012

Algeria

0,25%

0,24%

0,24%

Angola

0,04%

0,04%

0,04%

Benin

0,00%

0,00%

0,00%

Botswana

0,02%

0,02%

0,02%

Burkina Faso

0,00%

0,00%

0,00%

Burundi

0,00%

0,00%

0,00%

Cameroon

0,01%

0,01%

0,01%

Central African Republic

0,00%

0,00%

0,00%

Chad

0,00%

0,00%

0,00%

Congo, Republic of the

0,01%

0,01%

0,01%

Cote d'ivoire

0,01%

0,01%

0,01%

Djibouti

0,00%

0,00%

0,00%

Dem. Rep of the Congo

0,00%

0,00%

0,00%

Eq. Guinea

0,03%

0,03%

0,03%

Eritrea

0,00%

0,00%

0,00%

Ethiopia

0,01%

0,01%

0,01%

Table 7: The BECH Index for Africa 2012-14

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Country

12

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

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Country

BECH Share 2014

BECH Share 2013

BECH Share 2012

Gabon

0,03%

0,03%

0,02%

Gambia

0,00%

0,00%

0,00%

Ghana

0,01%

0,01%

0,01%

Guin. Bissau

0,00%

0,00%

0,00%

Guinea

0,00%

0,00%

0,00%

Kenya

0,01%

0,01%

0,01%

Lesotho

0,00%

0,00%

0,00%

Libya

0,05%

0,09%

0,12%

Liberia

0,00%

0,00%

0,00%

Malawi

0,00%

0,00%

0,00%

Mali

0,00%

0,00%

0,00%

Mauritania

0,00%

0,00%

0,00%

Morocco

0,06%

0,06%

0,06%

Mozambique

0,00%

0,00%

0,00%

Namibia

0,01%

0,01%

0,01%

Niger

0,00%

0,00%

0,00%

Nigeria

0,20%

0,19%

0,18%

Rwanda

0,00%

0,00%

0,00%

Senegal

0,00%

0,00%

0,00%

Sierra Leone

0,00%

0,00%

0,00%

Somalia

0,00%

0,00%

0,00%

South Africa

0,29%

0,30%

0,30%

South Sudan

0,00%

0,00%

0,00%

Sudan

0,02%

0,02%

0,02%

Swaziland

0,00%

0,00%

0,00%

Tanzania

0,01%

0,01%

0,01%

Togo

0,00%

0,00%

0,00%

Tunisia

0,04%

0,04%

0,04%

Uganda

0,00%

0,00%

0,00%

Western Sahara

0,00%

0,00%

0,00%

Zambia

0,01%

0,01%

0,01%

Zimbabwe

0,00%

0,00%

0,00%

Africa

1,14%

1,16%

1,17%

13

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Table 8: The BECH Index for Asia Pacific 2012-14

Country
Australia

1,62%

1,61%

1,62%

New Zealand

0,18%

0,17%

0,18%

Australia/NZ

1,79%

1,78%

1,80%

Japan

5,65%

5,94%

6,01%

China

7,23%

6,57%

5,90%

Korea, South

2,00%

1,96%

1,94%

Taiwan

1,57%

1,53%

1,53%

India

1,38%

1,26%

1,15%

17,82%

17,26%

16,53%

Hong Kong

0,69%

0,69%

0,69%

Thailand

0,45%

0,47%

0,46%

Singapore

1,17%

1,16%

1,11%

Malaysia

0,59%

0,55%

0,52%

Indonesia

0,90%

0,86%

0,81%

Philippines

0,15%

0,14%

0,13%

Kazakhstan

0,32%

0,31%

0,29%

Pakistan

0,13%

0,13%

0,13%

Vietnam

0,09%

0,09%

0,08%

Bangladesh

0,06%

0,05%

0,05%

Sri Lanka

0,07%

0,07%

0,06%

Azerbaijan

0,09%

0,09%

0,09%

Trinidad and Tobago

0,04%

0,05%

0,05%

Turkmenistan

0,04%

0,03%

0,03%

Bermuda

0,01%

0,01%

0,02%

Macau

0,15%

0,15%

0,13%

Mauritius

0,01%

0,01%

0,01%

Brunei

0,07%

0,07%

0,08%

Burma

0,04%

0,03%

0,03%

Bahamas

0,01%

0,01%

0,01%

Uzbekistan

0,03%

0,03%

0,02%

Cambodia

0,01%

0,00%

0,00%

Barbados

0,00%

0,00%

0,00%

Armenia

0,01%

0,01%

0,01%

Cayman Islands

0,00%

0,00%

0,00%

French Polynesia

0,01%

0,01%

The Big Countries

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BECH Share 2014 BECH Share 2013 BECH Share 2012

14

0,01%

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

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Country

BECH Share 2014 BECH Share 2013 BECH Share 2012

Korea, North

0,00%

0,00%

0,00%

Nepal

0,01%

0,00%

0,00%

New Caledonia

0,01%

0,01%

0,01%

Niue

0,00%

0,00%

0,00%

Papua New Guinea

0,00%

0,00%

0,00%

Guam

0,00%

0,00%

0,00%

Fiji

0,00%

0,00%

0,00%

British Virgin Islands

0,00%

0,00%

0,00%

San Marino

0,00%

0,00%

0,00%

Laos

0,00%

0,00%

0,00%

Haiti

0,00%

0,00%

0,00%

Virgin Islands

0,01%

0,00%

0,01%

Suriname

0,00%

0,00%

0,00%

Kyrgyzstan

0,00%

0,00%

0,00%

Cape Verde

0,00%

0,00%

0,00%

Afghanistan

0,00%

0,00%

0,00%

Guyana

0,00%

0,00%

0,00%

Madagascar

0,00%

0,00%

0,00%

Tajikistan

0,00%

0,00%

0,00%

Northern Mariana Islands

0,01%

0,00%

0,00%

Antigua and Barbuda

0,00%

0,00%

0,00%

Aruba

0,00%

0,00%

0,00%

Seychelles

0,00%

0,00%

0,00%

Maldives

0,00%

0,00%

0,00%

Saint Lucia

0,00%

0,00%

0,00%

Bhutan

0,00%

0,00%

0,00%

Saint Pierre and Miquelon

0,00%

0,00%

0,00%

Saint Vincent and the Grenadines

0,00%

0,00%

0,00%

Nauru

0,00%

0,00%

0,00%

Saint Kitts and Nevis

0,00%

0,00%

0,00%

Turks and Caicos Islands

0,00%

0,00%

0,00%

Wallis and Futana

0,00%

0,00%

0,00%

Samoa

0,00%

0,00%

0,00%

Cook Islands

0,00%

0,00%

0,00%

Dominica

0,00%

0,00%

0,00%

American Samoa

0,00%

0,00%

0,00%

Montserrat

0,00%

0,00%

0,00%

15

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

Country
Anguilla

0,00%

0,00%

0,00%

Palau

0,00%

0,00%

0,00%

Vanuatu

0,00%

0,00%

0,00%

The Federated States of

Micronesia

0,00%

0,00%

0,00%

Kiribati

0,00%

0,00%

0,00%

Solomon Islands

0,00%

0,00%

0,00%

Saint Helena

0,00%

0,00%

0,00%

Tonga

0,00%

0,00%

0,00%

Marshall Islands

0,00%

0,00%

0,00%

East Timor

0,00%

0,00%

0,00%

Comoros

0,00%

0,00%

0,00%

Sao Tome and Principe

0,00%

0,00%

0,00%

Tuvalu

0,00%

0,00%

0,00%

Curacao

0,00%

0,00%

0,00%

Mongolia

0,00%

0,01%

0,01%

Tokelau

0,00%

0,00%

0,00%

Saint Martin

0,00%

0,00%

0,00%

Sint Maarten

0,00%

0,00%

0,00%

Rest of the world

5,23%

5,23%

4,89%

24,85%

24,85%

23,05%

Asia Pacific

www.tbkconsult.com

BECH Share 2014 BECH Share 2013 BECH Share 2012

16

Entering Foreign Markets in the Information Technology Industry - The BECH Index 2014

About the author

Hans Peter Bech has been engaged with international sales and
marketing operations in the software industry for more than 30
years.
Hans Peter was instrumental in building the international
business platforms for companies such as Dataco (now Intel),
Mercante, Dansk Data Elektronik (now CSC), RE Technology
(now Barco), and Damgaard/Navision (now Microsoft).

Hans Peter Bech

As a management consultant Hans Peter has been

consulting on internationalization to companies
Microsoft, Danfoss, Proekspert, Jeeves Information
eMailSignature, SoftScan (now Symatec), Netop, EG
Scandihealth and Secunia.

providing
such as
Systems,
A/S, CSC

Hans Peter is an advisor to IMMIB, the Turkish ICT Exporters

Association. He also lectures in internationalization at the
Sabanci University in Istanbul, Turkey.
Hans Peter is the author of several whitepapers on
internationalization in the software industry and he frequently
writes articles on the subject.
He started his career as a management consultant in 2003
and founded TBK Consult in 2007. Since then he has built the
company to its present position with 25 senior consultants in 16
countries.
Hans Peter oversees the development of TBK Consult as well
as performs management consulting assignments for selected
clients.
Hans Peter holds a M.Sc. in macroeconomics and political science
from the University of Copenhagen. He speaks Danish, English
and German and is a certified ValuePerform, ValuePartner and
Business Model Generation consultant.
More about Hans Peter Bech

www.tbkconsult.com

Other publications by the author

17

TBK-WIPA-024