Software: French publishers are prospering, driven by AI

Record inflation and the uncertain macro-economic context have no effect on French software publishers. According to the latest Truffle 100 ranking, the sector’s total turnover crossed the 25 billion euro mark in 2022, an increase of nearly 15%.

“It’s one of the finest growth rates we’ve ever known,” comments Bernard-Louis Roques, managing director and co-founder of the Truffle Capital investment fund, which has been publishing this list analyzing the top 100 for more than fifteen years. IT publishers in France. After accusing a sharp slowdown in 2020 with the Covid-19 pandemic, French publishers confirm that they have regained a good momentum.

Over fifteen years, the sector has posted an average annual growth 12 times higher than that of GDP, notes the study. Only 11% of companies report declining sales, compared to 33% in 2020. And unlike last year, the profitability indicator is also green. The rate of profitability (as a percentage of turnover) thus fell from 9.1% to 10.4%.

Cegid and Murex take 2nd and 3rd places

Admittedly, the Dault Systèmes juggernaut “trusts a good part of the activity”, agrees Bernard-Louis Roques. The French champion of 3D simulation software, essential in aeronautics and automotive, recorded more than 5.6 billion euros in revenue last year, which places it far ahead of its competitors. In 2e and 3e places, Cegid, specialist in software for accountants, and the fintech Murex show respectively 791 and 711 million euros in turnover.

This polarization between big and small players is a global trend in the sector: the gap in turnover between the 50e and the 100e publisher has increased further in 2022 to reach nearly 28 million euros. “But the sector as a whole is progressing,” points out Bernard-Louis Roques. The turnover of 100e progresses even more compared to the 50e. »

The Lyon-based publisher Esker, which has positioned itself in the growth sector of electronic invoicing (16e place in the ranking), the unicorn Ivalua, specialist in the computerization of purchases (18e place) or even ESI Group, “which is a small Dault Systèmes in crash test simulation” (20e place), “are among the nuggets that deserve to be known”, underlines the general manager.

“AI users want smart interfaces”

Unsurprisingly, artificial intelligence is emerging as the new underlying trend in the sector. More than half (54%) of the companies surveyed believe that this new technology, qualified by Bill Gates of “biggest revolution since the 1980s”, will drive the market in 2023, on a par with cybersecurity.

“The first change in the sector was the migration to the cloud. The change is now in pure techno, with AI in particular, which has been talked about for a few years, and which is now truly transforming the industry”, analyzes the investor. “This upheaval is driven by the expectations of users, who want smart interfaces that adapt to their behavior. »

The sinews of war to stay at the forefront of these demands is investment in R&D. On this point, the study finds stagnation with less than 17% of the sector’s total workforce dedicated to R&D, ie around 32,000 people. The shortage of talent affecting the sector is probably not unrelated to this. However, unlike the previous year, the vast majority of publishers say they have been little or moderately affected in their development by this lack of resources.