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Featured Economic Papers

Software and Information Services in Israel

April, 2017


  • Total sales in the Israeli IT market are expected to increase 4.6% in 2017, led by services and software.  In our opinion, demand from the financial and government sectors will contribute to aggregate demand, and also expansion in activity in growing fields such as cloud computing and business intelligence (BI).


  • However, strong competition among the large corporations in these fields is expected to continue to push services prices downward.  All this while at the same time employee salaries are rising and demand for workers is outstripping supply.


  • The macro- data attest to the strength of the software services sector as well as computer consulting.  Exports from the sector increased 16.5% in 2016.  In addition, the number of employees in the sector has grown consistently, whereas within the industrial fields in the IT sector the number of employees has declined.


  • Consolidation in the IT services sector is continuing.  In 2016, as in previous years, the large corporations continued to acquire small companies and to expand into new areas of activity.  All this in a sector in which 86% of revenues are concentrated within 6% of the businesses (according to 2015 data).


  • Data from the financial reports of the companies in the information services sector indicate an increase in operating profitability and liquidity ratios, as well as a decline in the level of financial leverage in 2016, and also attest to a positive trend.



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