VMware shows the value of Bulgarian IT

In late March, VMware group announced that it had accepted a deal offer from the semiconductor giant Broadcom for $61 billion. Both companies have offices in Bulgaria, albeit with reversed roles - in the country, VMware is more than ten times larger than Broadcom. This raises questions about whether there will be changes in VMware's Bulgarian business as well, but according to the company's answers, "it is still too early to say how the acquisition will affect the Bulgarian business". In other words, the acquisition which shook the tech world still has an uncertain influence.

IT in Bulgaria

The total revenues of the 30 largest software companies in Bulgaria already exceed BGN 2 billion for 2021. If this statistic is not impressive enough, consider the following - just three years ago, total revenues were under 1 billion BGN. The number of people employed in these companies increased by an average of 10% between December 31, 2020 and the same date in 2021. And the total profit of all the big ones in the sector is BGN 268 million, or on average the margin is 13 cents for every Bulgarian lev (BGN) of income.

Companies we consulted not only during the collection of data for this year's ranking but also throughout the rest of the year, complain of the same problems that they had a year or two ago - there are not enough people even though they keep hiring more and more. Demand is still greater than the available workforce.

For the sector overall it seems that the coronavirus never happened and there is no inflation - revenues jumped by 20% on average. If there is one concern for 2022, it is the war in Ukraine and the accompanying uncertainty in the markets.

However, there are still other fluctuations that need to be taken into account. All of the cited increases are driven by a few players who saw high spikes. In others, although significantly fewer in number, the number of employees, profit or revenue have decreased. Although this is bad news for companies that are experiencing difficulties (not necessarily because of the pandemic, war or inflation), the good news is that the growing ones have a huge hunger for new employees. Hardly anyone who is seeking to find a job in the sector has been left without opportunities. The same applies to clients who can choose from the wide variety of companies in the market.

In addition to the general direction remaining upward, the ranking also maintains the main trends of the last few years - the sector is dominated by branches of foreign companies, and the strong Bulgarian representatives largely remain the same. Although small, all of them have seen revenue growth ranging from modest to very impressive.

The rest of the top

In second position in the ranking is London-based Paysafe, which also reports an impressive growth in revenues - 24% to BGN 221 million. In terms of profit, the growth is slightly below 20% - BGN 12.5 million for 2021, while the number of appointed employees increased by 8% to 1448 people.

In third position is the only all-Bulgarian company in the top five - Siteground Hosting, a hosting company founded by Tenko Nikolov and Ivo Tsenov. It has an interesting dynamic - huge increases in revenue and profit, but a reduction of almost 10% in the number of employees. Revenues and profit jumped by 55% and 78% respectively to BGN 219 million and BGN 130 million, but the number of employees decreased to 508 by the end of 2021.

Siteground did not want to make any comments on its finances. It is likely that the Bulgarian company is used as a holding, in which revenues from subsidiaries are also reported. Judging from the previous year's financial statement and the notes there, income derives mainly from three related companies.

In an interview with Kapital last year, Nikolov and Tsenov commented that they had repeatedly received offers worth billions of dollars.

Fourth in the ranking is SAP Labs, the development company in Bulgaria of the German software giant SAP. The company's revenues grew by 18% to BGN 153.8 million, and profits remained at last year's level - BGN 6.4 million. Most impressive is the growth in the number of employees - 24% to 1245 people. And the presence seems permanent, after last year SAP bought a new headquarters in Bulgaria for about 50 million euros.

"For the last more than 3 years, we have been the fastest-growing SAP development center in Europe and the largest development center in Southeast Europe. Currently, more than 1,400 colleagues have chosen to develop their professional careers at SAP in Bulgaria. In the past year, we have attracted nearly 300 new colleagues who work completely remotely. We currently have more than 200 new positions open, and since the beginning of 2022 we have already added more than 100 specialists to our teams, which also reinforces the trend of the last 10 years - to grow at a constant rate of 10 -15%," Radoslav Nikolov, executive director of SAP Labs Bulgaria, told Kapital.

The last one in the top 5 is the consolidation of the two Bulgarian companies of the French Atos. With total revenues topping BGN 119 million and a profit of BGN 15.5 million, the enterprise continues to grow in Bulgaria at a constant rate between 10 and 20% in almost all indicators.