Welcome to our latest issue of News from Europa. Last time, we looked at which companies can be targeted in Europe. This month we'll be “digging the furrow” and looking at how to assess an account's potential. You will see that it leads to our next topic “Build versus Buy”. If you want us to address particular topics, please let us know directly on dg@starteuropa.com.

As half of humanity has fallen into containment with the Covid-19, we will also give you our feeling of what is happening here in Europe.

Account Potential

Based on the turnover of the targeted company, it is easy to calculate the IT budget. We take 2 sources that are roughly coherent. Deloitte Insights found that companies spend on average 3.28% of their revenue on IT. Banking and securities firms spend the most (7.16%) and the construction industry spends the least (1.51%). Another famous source is Gartner. On average, 4% of the revenue is spent on IT.

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By cross-referencing the percentages in the table with the turnover, you can get a fairly accurate idea of the IT budget. This technique is valid for large accounts as well as for small companies. This will never replace a detailed knowledge of the targeted account. This implies going to get this information with your own sales representatives or with partners such as StartEuropa. Another remark that limits this approach: most of you have disruptive offers that you sell in a way that breaks existing habits. The IT budget is a vision of the past that you want to change to your advantage. In any case, with this easy to implement approach you know where you are starting from.

“Build versus Buy" teasing for the next issue of News from Europa

It is estimated that the IT budget of the company you are targeting is generally composed of 44% labor (salaries and benefits of the IT teams). This labor is at ¾ internal (the internal IT team) and ¼ external (Consulting or Professional Services). The share of software is 17%. The rest of the IT budget is made up of Hadware, Communications, Facilities and Outside services in PaaS, IaaS (as AWS, Microsoft Azur…).

The proportion of the human factor in the IT budget and thus in the costs of IT services explains the resistance of some organizations to software and even more to software packages. We will soon look at this debate between the Build and Buy. You in North America know that the Buy has the most advantages. We will see that the argument must be well worked out to convince your European prospects who still too often lean towards the Build. To find out more, read our May 8th edition.

Covid-19 and Europe

At StartEuropa, we try to make you want to invest in Europe. This is the main objective of this newsletter: convincing you to go and expand in Europe. Today, as the founder of StartEuropa I can't pretend that everything is going well. Covid-19 has disrupted our lives. To sum up, and without replacing the excellent epidemiologists who appear on the television news, let us take stock. A virus appeared in China, Asia at the end of 2019, hence its name Covid-19. It's particularly contagious. More than we thought. Much more. The virus is very aggressive. In most cases, those who are sick get over it. However, in its more severe form, it attacks the lungs and causes respiratory insufficiency. Once in a critical stage, patients are treated with long, painful, expensive and still random resuscitation protocols. The first notable thing is that here in Europe we first did not believe in it. Unlike the Asian countries that had suffered from SARS and H1N1, we in Europe were not so affected in the past and we have since let our guard down. That's probably why we weren't ready at all with this Covid-19: not enough masks, not enough hydroalcoholic gel, not enough respirators and not enough tests to detect it.

Personal impact

Initial phase the astonishment. For some, we have witnessed a withdrawal into ourselves. A return to the narrowest base. As if we were going back down into Maslow's pyramid on the lower layers, to feed ourselves and ensure our safety. We can see extraordinary acts of solidarity but also cowardice, lack of civility, dangerous behavior. In short, the best and the worst. Terribly human. No matter how positive we are naturally, a terrible ordeal is taking place. "They did not all die, but they were all stricken," said La Fontaine in 1678, referring to the plague. We are in the same psychological situation more than 3 centuries later, with this epidemic, rich or poor, ordinary citizen or prime minister, we can all be affected. And if we are healthy and young, we worry a lot about our parents, our elders and our seniors. Now the spread of the virus is such that we know people who are affected (and fortunately cured) or worse.

Health crisis

Most Europeans are now in strict confinement. Staying at home is the watchword. The evolution curves are examined to find out how the virus spreads, when it will reach a plateau before decreasing. The press such as Financial Time https://www.ft.com/coronavirus-latest provides excellent daily update of the situation. In terms of casualties, Italy is now the first country to be affected, followed by Spain. Both countries Italy and Spain seem to have hit the plateau, even if we must be very cautious. France is following the same trend, some 10 days behind Italy. In the UK, the epidemic is accelerating. Germany seems to be doing much better with relatively fewer victims. This should be used as a basis for defining best practices in the fight against pandemics. Bill Gates had already informed us that this would be part of our lives.

Economics

We initially believed that business operations will continue at a reduced level. Now we know that business operations are severely restricted. Especially since containment or quarantine has been prescribed. At the macroeconomic level, economists are trying to predict the extent to which the economy is affected. Stock market prices are a good indicator. At the end of March, stock market indexes of the main 3 economies in Europe dropped by more than 25% since the beginning of the year. Very similar to Dow Jones (minus 23%) You will notice that the Nasdaq (dominated by technology stocks) is doing relatively better (minus 14%), as there is always a "Darwinian" phenomenon with an economic crisis.

Time for Care

At the company level, some of you are in the right niche and are accelerating. Most of you are telling us that you are affected, and you are waiting to see how the situation will evolve. The pandemic is a risk addressed by the Business Continuity Management (BCM) management discipline which is going to make a quantum leap in the customer priorities. it's worth looking into. Interesting for your own company and to understand how your prospect and customers are handling the crisis. Faced with any type of risk, including health, BCM gives recommendations to manage and take care of each of your stakeholders (Customers, Suppliers, Employees...) and make your company resilient. As at StartEuropa, as we have a very strong customer focus, we do think it's time for Care, for Customer Care. Calling your customers and checking up on them. Personal touch when possible. This will enable you to get closer contacts. Your customers will remember this when all this is over, and we have defeated the virus (in the history of mankind we have always won).

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We are looking forward to exploring with you how to increase your business in Europe.

Have an excellent day!

Best regards,

Daniel

CEO and Co-Founder StartEuropA

We open the doors for you in Europe!

dg@starteuropa.com