Israeli IT company Ness Technologies (Nasdaq: NSTC) has been given top rating by the BDI-Coface rating of the software and integration service sector, with revenue of NIS 1.73 billion in 2005, a 27% increase compared with 2004. In joint second place came the Team Computers and Systems (TASE: TEAM) and its subsidiary Malam Systems (TASE: MLAM)., followed by Matrix IT Ltd. (TASE:MTRX), Taldor Group (TASE: TALD) and Computer Direct Systems.
Last year Ness extended its local distribution contract with SAP AG (NYSE; LSE; DAX: SAP) through 2010, and focused on the expansion of its international activity through a series of acquisitions, in addition to substantially expanding its local activity. The company’s leading projects include the $10 million contract with the IDF for the development and implementation of a command control system; the provision of outsourcing services to Yellow Pages (Dapey Zahav), and a $19 million contract with the Tel Aviv Municipality for the setting up of a payment and collection system.
Malam was taken over by Team Computers, which acquired a 65% stake, making it one of the largest IT companies in Israel. Third placed Matrix posted revenue of NIS 1.06 billion in 2005, up 17% on 2004. Fourth placed Taldor also saw its revenue grow in 2005 by 33% to NIS 550 million. Computer Direct Systems which came last, ended 2005 with revenue of NIS 412 million, an increase of 12% compared with 2004.
The BDI-Coface survey shows that after a number of years of stagnation, the software and integration services sector has seen substantial growth since the middle of 2004. Investment in software services increased by 14% to NIS 6.5 billion in 2005, after rising 10% in 2004.
BDI-Coface analysts attribute the sector growth to, among other things, the continuing improvement in the economy, which has led in turn to companies and businesses going forward with investment in software and integration that had previously been put on hold during the recession.
BDI also notes that the sector growth has increased demand for employees and salary levels, although these are still a long way from the highs recorded during the bubble period in 2000. The number of people employed in Israel’s IT sector totaled 67,000 at the end of 2005, with the average gross salary reaching NIS 15,800.
Published by Globes [online], Israel business news - www.globes.co.il - on July 30, 2006
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