Going Nordic: Exploring Managed Services, Hosting Opportunities in Scandinavia

Imagine the map on the wall, close your eyes and point to a spot on the map. As a solution provider looking for new markets, if your index happens to fall on Scandinavia, you might be on to something.

You see, the Scandinavian countries of Sweden, Norway, Denmark and Finland, also often referred to as Nordic, are among the most technologically advanced nations in the world. Their people are pre-disposed to trying new technology, and their governments have a history of implementing tax incentives to accelerate the adoption of new technologies.

It explains why high-tech vendors tend to use Scandinavia, which is home to communications products giants Nokia and Ericsson, as a test market for new products. The region has a combined population of about 23 million.

“From a marketing perspective, Scandinavia is a good market to approach,” says Per Lofgren, director at Par, a Swedish data services company whose offerings include EuroContactPool, a pan-European business-to-business marketing database.

“Most Scandinavians are very keen on trying things very early on,” he says. “We are very early adopters of new technology.”

Lofgren sees two reasons for this Scandinavian characteristic. “One factor is that we can afford it,” he says. The second is “we have a very good education system,” which, Lofgren adds, engenders in Scandinavians a curiosity about trying new things.

In Sweden, the country that pioneered the modern census and gave the world Volvo, Ikea and Abba, the penetration of PCs in homes is close to 100 percent as a result of generous tax incentives, says Lofgren.

“PC and Internet penetration are among the highest in the world,” Lofgren says.

So with penetration this deep, one may ask, just how much of an opportunity does the European region truly present to U.S. companies?

Keeping in mind the Scandinavian inclination to try new things, services companies specializing in newer technologies, such as unified communications, SAAS (software as a service), virtualization and managed services, should look at Scandinavia as a potential market for their offerings. Despite the availability of such services in country, Lofgren says, Scandinavians are anything but averse to doing business with companies outside their borders.

Currency rates being what they are these days, foreign companies buying U.S. goods and services will find them cheaper than if the dollar were higher. It’s the inverse of why American tourists through the years have done so well in countries whose currency valuations were far lower than the dollar.

Lofgren says Scandinavians are embracing hosting services. Companies offering hosted e-mail and document-sharing services, in particular, have an opportunity to pitch their offerings to clients in the region.

General SAAS offerings and managed services, he says, are gaining momentum in Scandinavian countries. As such, they present an opportunity for U.S. services providers looking to expand their customer base.

Managed services and hosting models give any service company the ability to become an international provider, so long as the company has the wherewithal to build the infrastructure or partners with a company that already has built it.

Even the smallest MSP (managed services provider) can offer services outside U.S. borders, and traditionally that happens when a client needs the services extended to a branch abroad. But as hosting services company The Planet has demonstrated with its Brazilian client Atitude Digital Media, it is also possible to use the services to attract new foreign clients.

Lofgren’s company, Par, has operated for some 50 years, and in the last five years it extended its business-to-business database, EuroContactPool, beyond Swedish borders to Norway, Finland and Denmark, and to other places in Europe. With the database, Par helps clients identify potential target groups for their products and services.

Lofgren says that not only is Scandinavia a good market for companies outside its borders, but the region also has its fair share of exports, primarily to Germany, France and the United Kingdom, and also the United States.