This story is available exclusively to Business Insider subscribers.European software startups, a bright spot in the bloc's still-nascent tech scene, could be crippled by a predicted slowdown in tech spending for 2020.
Forrester analyst Andrew Bartels said smaller enterprise software providers lacked the financial reserves of giants like SAP to see them through a downturn.European technology spend could fall by nearly a tenth in 2020, as businesses rein in their spending and the bloc's three biggest economies move into recession — and even the burgeoning enterprise software sector will take a beating.
According to Forrester's forecast, software spend in a worst-case economic scenario would drop 8% in France, 7% in Germany, and 3% in the UK — an average percentage of 6%.Enterprise software firms are generally a reliable bet for startup investors, who bank on the predictability of revenue from monthly subscriptions or annual licenses.
She told Business Insider: "One of the more interesting calls I had was with someone who had been through two of the previous crises, so 2008 and 2001. They said the advice they were giving to all their software companies, which I find very compelling, was, 'Look, anyone that calls you and says they're thinking about cancelling ... or don't even wait for them to call you, call them up and just give them a year free.
He added that companies which raised sufficient funding in 2019 to counter their losses in 2020 would survive.
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