copyright 2009 idc aid to recovery: the economic impact of it, software, and the microsoft ecosystem...
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Copyright 2009 IDC
Aid to Recovery:
The Economic Impact of IT, Software, and the Microsoft Ecosystem Worldwide
Prepared for Microsoft Corporation
October 2009
Copyright 2009 IDC
AgendaAgenda
Key FindingsStudy Background
Impact of IT
Impact of the Microsoft Ecosystem
Growth through Innovation
Appendix: Methodology
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Copyright 2009 IDC
Key Findings: Worldwide*Key Findings: Worldwide* IT spending should be $1.414 trillion in 2009
IT employment should increase by 5.8 million jobs by year-end 2013, up from 2009 base of 35.6 million and 3 times faster then general employment growth
In 2009 software should account for 21% of spending – but 51% of IT employment
The Microsoft ecosystem and IT professionals in IT departments should constitute 42% of IT-related employment in 2009
For every dollar of Microsoft revenue in 2009, the ecosystem beyond Microsoft should reap more than $8.70
The Microsoft ecosystem is expected to invest nearly $180 billion in local economies in 2009
* 52 countries in all geographies, accounting for 98% of global IT spending
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Copyright 2009 IDC
Project BackgroundProject Background
Global study built on 7 years of IDC economic impact and Microsoft Footprint studies
Coverage: 52 countries, 98% of IT spend
Built from IDC market data on IT spending by platform and third party economic data
Economic impact covers from 2008 through 2013; Microsoft footprint in 2009
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Copyright 2009 IDC
52 Countries Covered52 Countries Covered
North America Latin America
Western Europe
Central and Eastern Europe
Middle East & Africa Asia-Pacific
Canada Argentina Austria Bulgaria Egypt AustraliaUnited States Brazil Belgium Croatia Israel China
Chile Denmark Czech republic Saudi Arabia Hong KongColombia Finland Greece South Africa IndiaMexico France Hungary Turkey IndonesiaPeru Germany Poland UAE JapanVenezuela Ireland Romania Korea
Italy Russia MalaysiaNetherlands New ZealandNorway PhilippinesPortugal SingaporeSpain TaiwanSweden ThailandSwitzerland VietnamUnited Kingdom
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IT Is a Driving Economic ForceIT Is a Driving Economic Force
0%
1%
2%
3%
4%
GDP IT Spending TotalWorkforce
IT Workforce
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
Growth Expected from Year End 2008 through 2013
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Copyright 2009 IDC
Software Powers Much of IT Software Powers Much of IT
Hardware VendorsChannel & Services FirmsNon Software Workers
50%
Software 21%
Total* IT Spending, 2009
Total* IT Employment, 2009
$1.4 Trillion 35.6 Million
Software Vendors
Channel & Services Firms Software Workers
51%
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
Between now and the end of 2013, spending on software will grow 4.8% a year, total IT 3.3%
During 2009, total IT employment dropped, while software-related employment grew 4%
While software related jobs account for 51% of total IT employment, they account for 65% of IT-related taxes
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Emerging* vs. Mature EconomiesEmerging* vs. Mature Economies
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent ofWorld GDP,
2009
Percent ofNEW GDPGrowth,
2009-2013
Percent of ITSpending,
2009
Percent ofNEW IT
Spending,2009-2013
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
Emerging* Country Share of GDP and IT Spending
* Excludes Australia, Canada, Japan, New Zealand, United States, and Western Europe
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Copyright 2009 IDC
0%
5%
10%
15%
20%
25%
30%
35%
US & Canada EU Central &EasternEurope
Middle East &Africa
Latin America Asia Pacific
Percentage Job Growth Expected from 2009-2013
Emerging vs. Mature EconomiesEmerging vs. Mature Economies
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied 9
Copyright 2009 IDC
The Microsoft Ecosystem, 2009The Microsoft Ecosystem, 2009
Nearly 700,000 companies are selling hardware, software, services based on Microsoft software
44% of hardware (by dollar) sold in 2009 will run on Windows, 56% of software
42% of IT employment will be Microsoft related, or 14.9 million people
For every dollar Microsoft makes, the ecosystem should make $8.70
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Copyright 2009 IDC
14.9 Million IT Jobs
Microsoft-Related Employment, 2009Microsoft-Related Employment, 2009
IT Professionals
59%
Hardware & Software Cos.
19%
Services & Channels Firms 22%
35.6
14.9
Total ITEmployment
(M)
Microsoft-Related IT
Employment(M)
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied 11
Copyright 2009 IDC
Investment by the Ecosystem, 2009Investment by the Ecosystem, 2009
Includes spending on R&D, test and development, sales and marketing, administration, and training
Software37%
Services19%
Hardware31%
Channels13%
Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
$179 Billion
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Copyright 2009 IDC
For every $1.00 of Microsoft revenue in 2009, IDC expects $8.70 to be generated in revenues by other companies in the Microsoft ecosystem
Impact on the Local EconomyImpact on the Local Economy
$1.00
$4.27
$1.99$2.44
Microsoft Hardware Software Services
13Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
Copyright 2009 IDC
Growth Through Innovation Growth Through Innovation
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2010 2011 2012 2013
$800 Billion Net New Business Revenue from Cloud Computing*
* Microsoft calls it Software + Services
Long term transition to use of Internet-based services and intelligent clients
About 1% of IT spending in 2009, but fast growth
Lowers percentage of IT spending on maintenance of legacy systems and allows new projects and initiatives
Resultant innovation leads to new business revenues
14Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied
Million
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Methodology StepsMethodology Steps
Collect IDC IT spending for each country; adjust for exports and imports
Develop a model of employment based on IT production and revenue metrics per employee and company; validate with other known information
Estimate Microsoft revenues per country in 2009 from IDC forecasts
Use IDC research on IT products (hardware and software) by OS to forecast value of products expected to run on Microsoft OS; apply services and channels tie ratios
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Copyright 2009 IDC
Labor Rates, Exchange Rates
IT Economic Impact Model
Standard Definitions
IT Spending Statistics by State &
CountryValidation by Cross Checks
Import/Export Factors
Study InputsStudy Inputs
Internal Review, Quality Control
Macroeconomic Data
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EIM and Footprint MethodologyEIM and Footprint Methodology
Local IT Production
•Domestic Spending•Export
•Distribution
Economic Impact Model
Hardware
Software
Services
Channels
Software-Related•Domestic Spending
•Jobs
Non Software-Related
•Software•SW-rel IT Services•SW-rel Channels
Microsoft Related•Domestic Spending
•JobsMS%
IDC CIS and Tracker Research
IDC 2009 EIM
IT Spending
Microsoft Footprint
MS$
Pro Forma or Local Estimates
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