As small, open economies with high-cost levels, the Nordic countries are dependent on efficiency for continued growth and prosperity. Visma aims to promote competitiveness and contribute to the creation of growth and effectiveness for our customers and the Nordic economies by providing software that makes business and admin processes more efficient.
After divesting the BPO division in late 2016, Visma entered 2017 as a pure software company. 2017 was a year of strong growth. Visma achieved 19.0 % growth in revenues while EBITDA grew by 12.8 %. SaaS and cloud computing continue to be the main growth driver and cloud revenues grew 37.3 %. Overall, the economies in Visma’s core markets are performing well. The Nordic economy has recovered from the oil sector volatility and growth is good. Sweden and Denmark also continue with stable growth during 2017. After several years of negative growth, the Finnish economy also shows signs of increasing growth. Overall, the Nordic economies are stable with above-average growth rates compared to Europe and we remain positive about the macroeconomic situation, although the global political situation may hold surprises for 2018.
Visma experienced good revenue growth across all segments. The strongest growth was in the Enterprise segment, which grew 38.1 % year on year. Revenues in Visma’s largest segment, SMB, grew by 14.6 %. Custom Solutions grew by 27.7 %. Retail grew by 1.6 %. Lastly, revenues from Visma’s Hosting & IT operations grew by 3.1 %. Visma is combining its organic revenue growth with an active acquisition program. During 2017 Visma acquired 17 companies, most of them fast-growing cloud computing companies. Through the acquisition program, Visma gets access to new technology, new talent and new markets.
With more businesses seeing the benefits of SaaS software, and demand for cloud computing and mobile solutions keeps growing. Visma has invested heavily in its SaaS products since 2010, and we are now seeing the benefits of the demanding transition to becoming a cloud company. Revenues from Cloud Computing grew by 37.3 % in 2017, to NOK 5 127m. In Denmark, SaaS champion e-conomic was joined by Dataløn, a leading SaaS payroll software in Denmark, acquired as part of the Bluegarden group, ensuring that Visma has the strongest SaaS product line up available in the Danish market. The entry level solution eAccounting now has more than 90 000 customers across Norway, Sweden, Finland and the Netherlands. Adding local SaaS champions, such as Netvisor and Fivalli in Finland and Tripletex in Norway, Visma has well over 500 000 SaaS customer contracts.
Visma has a strong presence in the Nordic, Baltic and Dutch segment where we have achieved good segment positions, high brand awareness, operational efficiencies and competitiveness. Visma’s ambition is to be a national and regional leader in its product categories, an advantage versus global competitors. During 2017, Visma experienced strong growth in all segments. Through the acquisition of Bluegarden, Visma’s largest acquisition to date, we also got a significant position in the Danish payroll segment. We look forward to improving and expanding our payroll and HRM offering to customers across all segment in the years to come. In the coming years, Visma will consider expansion to new, well regulated, politically stable geographies through acquisition of market leading local SaaS companies. We will remain loyal to the strategy about being a strong and sizeable player in each segment, rather than spreading thinly globally.
Investments in product development and innovation are key success factors for Visma. During the decade from 2010 to 2020 Visma will re-create all its Windows solutions as cloud solutions. This means complete rewrite of code, not converting or upgrading. Thus investments in the years 2013 through 2017 are at a peak as we continue to maintain on-premises solutions as well. In 2017 and R&D expenses amounted to approximately 15% of revenues. About two thirds of R&D investments are related to SaaS projects. Visma operates in high cost markets with a strong drive for increasing efficiency. Through utilizing advanced algorithms, big data and artificial intelligence, Visma is exploring more ways to automate the core accounting and payroll processes for the customers to increase efficiency and competitiveness.
Finding and keeping the right talent is a key to Visma’s future success, and the competition is hard for the best and brightest minds. Across our core geographies, Visma has worked consistently to build brand awareness among students in top universities over time with application numbers for our trainee programs increasing. Also among experienced professionals, Visma is increasingly perceived as an attractive employer. Visma is competing with larger global and regional companies and we are dependent on our nearshoring capacity. The Nordic cost level combined with insufficient access to competent human resources have been the drivers behind the build-up of our nearshoring activities, which today comprise operations in Romania, Lithuania, Latvia, Poland, Ireland and Spain. At the end of 2017 we had 950 full time employees in these locations, and the plan is to increase this by another 200 FTEs by the end of 2018. Most resources are within software development and levels of employee engagement in these locations are among the highest in the group.
As a provider of mission critical systems, Visma takes its responsibility when it comes to cyber security and privacy seriously. Visma is consistently working on improving its data protection procedures, and has launched several initiatives during 2017 to ensure that we meet current and future privacy regulations, including the coming EU General Data Protection Regulation. To meet the increasing global cyber security threat levels, Visma also continues to invest in the IT security program. Visma IT&C, responsible for Visma’s internal IT operations is ISO 9001, ISO 20000, ISEA 3402 and ISO 27001 certified.
Visma will continue to promote competitiveness by providing our customers with software that make their business and admin processes more efficient than their competition. Our core markets are the among the most tech savvy in Europe, and Visma expect to see our modern SaaS solutions to be the growth driver also in 2018. In a changing world with tough competition it is hard to plan for all eventualities. However, an agile, competent and engaged organisation is able to adapt to disruption in technology and markets. In later years the employee engagement surveys in Visma have shown high levels among our 7 000 employees. Combined with a good inflow of new talent, Visma shall be able to prosper and grow in the coming years.