Microsoft Announces Results of New Economic Impact Study

LISBON, Portugal, Oct. 5, 2004 — As part of Microsoft Corp.’s Executive Partner Summit today, the company announced results from a new economic impact study conducted by International Data Corp. (IDC). Sponsored by Microsoft, the economic impact study highlights the fact that information technology (IT) continues to be a major driver of local and regional economic activity in the countries within the Europe, the Middle East, and Africa (EMEA) region. According to the study, IT-related activities in 19 EMEA countries were the source of nearly 9 million jobs and more than $200 billion (U.S.) in tax receipts in 2004. And the IT industry’s impact is expected to grow: Over the next four years, the EMEA IT sector is expected to generate 2 million new jobs and an additional $160 billion (U.S.) in tax revenues in these regions.

“There is no question that information technology is a dynamic factor in the global economy and that its impact can be felt at every level, from the European Union to individual households,” said John Gantz, chief research officer at IDC. “The IT industry has returned to positive growth for these regions and is once again an engine of employment growth and tax revenues for local economies.”

The study examines the IT industry’s impact on job creation, company formation, local IT spending and tax revenues in Austria, the Czech Republic, Denmark, Estonia, France, Germany, Hungary, Ireland, Israel, Italy, Lithuania, the Netherlands, Poland, Portugal, Russia, South Africa, Spain, Turkey and the United Kingdom. Nearly 9 million people in these 19 countries are employed by more than 356,000 companies in the hardware, software, services and channels segments, or as IT professionals in end-user organizations. Microsoft-related employment ranges from approximately 36,000 people in both Hungary and Turkey to more than half a million in the United Kingdom and Germany. In addition, for every $1 of Microsoft revenue in the region, another $7.50 was generated by other companies selling hardware or software that works on Microsoft®
operating systems or servicing that software.

Within the 19 countries, roughly half of all IT-related jobs are engaged in creating, distributing or servicing software, either for external customers or internal corporate users. Similarly, more than half of all their IT tax revenues come from software-related activities. The Microsoft ecosystem accounts for over a third of 2004 employment and tax revenues in these countries.

“These new employment figures from IDC illustrate the economic benefit created by the IT industry in general, and especially by Microsoft’s ecosystem of partners and customers in these countries,” said Steve Ballmer, CEO of Microsoft Corp. “Millions of people are employed in this ecosystem — fully 36 percent of the overall IT sector — generating billions of dollars for governments across EMEA. The IDC data underscores what we’ve always known to be true — that Microsoft’s business model supports a vibrant IT economy in which local businesses thrive and local jobs are created.”

This study is the third update to IDC’s Economic Impact Model, which assesses the IT industry’s impact on job creation, company formation, local IT spending and tax revenues in 58 countries. The study’s spending figures accounted for hardware, software, services and data networking expenditures by consumers, businesses, governments and educational institutions within each country. Tax revenue figures were based on potential value-added tax (VAT) or sales tax revenues from the sale of hardware, software or services, as well as business and personal income taxes and social taxes. IT employment included the number of people employed (full-time equivalent) in hardware, software, services or channel firms, and those individuals managing IT resources in an IT-using organization (e.g., programmers, help desk staff and IT managers). All data was cross-checked against published information and census data available from government sources and validated by local government officials.

About the Microsoft Executive Partner Summit

The Executive Partner Summit is Microsoft’s premier event for engaging with its core partners and IT-industry leaders in the EMEA region. The event draws approximately 450 executives, representing many of the world’s leading systems integrators, original equipment manufacturers, independent software vendors and other industry players. The annual conference aims to foster greater industry collaboration and information-sharing, and to highlight the breadth of business opportunity that exists in the EMEA region.

About Microsoft

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