1 / 16

The Economic Impact of IT, Software and Microsoft in South Africa

The Economic Impact of IT, Software and Microsoft in South Africa. Mark Walker, Director - Vertical Industry Practice IDC Middle East & Africa October 2009. IT Market Topics and Issues in South Africa. Road to Recovery GDP (2009 –2.2% vs 2010 +3.1%)

adele
Download Presentation

The Economic Impact of IT, Software and Microsoft in South Africa

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Economic Impact of IT, Software and Microsoft in South Africa Mark Walker, Director - Vertical Industry PracticeIDC Middle East & AfricaOctober 2009

  2. IT Market Topics and Issues in South Africa • Road to Recovery • GDP (2009 –2.2% vs 2010 +3.1%) • SW & Services Spend (2009 1.6% vs 2010 5.8%) • IT contribution to GDP • SA: 4.2% • Business Confidence • Exchange Rate fluctuations • Small Medium Business Sector • Govt spending • new brooms • pent-up demand • Leadership • accountability • efficiency • National Initiatives • IT development zones • eSkills dialogue • Public Private Partnership • Access to broadband and internet • Price • Relevance • Infrastructure • Skills • Availability • Labour Broking • Regulation • Monopolies • ICASA • Competition Commission • African Collaboration • Healthcare

  3. IT Spending Statistics by Country Validation by Country Officials Standard Definitions Import/Export Factors IT Economic Impact Model Macroeconomic Data Tax Rates, Labor Rates, Exchange Rates IDC Analysts in 45 Countries Study Methodology

  4. Methodology – Process Flow

  5. IT Industry – Source of Economic Growth ($m) IT spending will reach $11.7 billion in 2009, representing 4.3% of GDP. In 2013, the market will reach $15.2 billion, for 4.9% of GDP in that year. • Broadband rollout • Content technology • IT Tax Contribution

  6. Growth in IT-Related Tax Revenues IT-Related Tax Revenues An aggregate of $1.4 billion in new tax revenues over 4 years Total IT-related tax revenues will reach $3.5 billion in 2009 Total taxes paid by IT sector in 2007-2008 ~ $6.1 billion Personal & Social Taxes Corporate Income Taxes VAT

  7. IT Will Create New Jobs IT-Related Employment Source: StatsSA Labour Force Survey Between 2010 and 2013 - aggregate of 95,200 new IT jobs Hardware employees Software employees Channel and Services employees IT Professionals 429,500 people will be employed in IT-related functions by the end of 2009

  8. Local End User IT Organizations IT Producers (Hardware & Software) Local Channel & Service Firms 83,800 329,900 15,800 IT Related Employment, 2009 • Between 2010 and 2013, even modest IT growth (5-8%) will fuel an additional 95,200 new IT jobs • While software represents only 12% of total IT spending, it drives 47% of IT industry employment 2009 IT Employment by Sector

  9. New IT Jobs New IT Jobs Between 2010 and 2013 • 2010 Hangover • Support • Maintenance • Customisation Govt Infrastructure Projects • Commercial Demand • economy fully recovered • Broadband New Technologies Market Expansion New IT Jobs 07/09 – 74 442

  10. Software’s Impact on Taxation, 2009 IT-related tax revenues (corporate, personal, social taxes from both supply and demand side) IT Spending While software represents only 12% of total IT spending, it drives 51% of IT tax revenues Software–related tax revenues 51% Non-software IT tax revenues 49% Hardware & Services 88% Software 12% Bang for Buck Factor Software enables greater downstream value addition via ecosystem and employs people with higher average remuneration levels $3.5 Billion IT tax revenues $11.7 Billion

  11. Impact of the Microsoft Ecosystem IT Spending IT Tax Revenues IT Jobs In 2009, Microsoft-enabled jobs will comprise 175,600 people, representing 40.9% of IT employment. In 2009, Microsoft-enabled revenues will reach $4.7 billion, representing 40% of total IT spending. In 2009, Microsoft-related tax revenues will reach $1.59 billion, which represents 44.9% of total IT tax revenues. Definition: The Microsoft Ecosystem encompasses all IT companies and IT sector employment, which depend directly or indirectly on Microsoft software products. Components of this ecosystem include: Companies that create, sell, distribute, or service hardware or software that runs on Microsoft operating systems; IT professionals at companies and other organizations that develop applications, service, or maintain such hardware or software.

  12. Microsoft Ecosystem IT Spending Microsoft-enabled Revenues, 2007 vs. 2009 Between 2007 and 2009 Microsoft-enabled revenues grew at a CAGR of 9.8%. MS enabled Revenues includes application and development software, MS related Services and OEM but not channel revenues. Other IT Revenue includes PC and Server Hardware, Networking Equipment, non-MS IT Services, Storage Hardware, Peripheral Equipment and non-MS software MS CAGR: 9.8% SW Mkt CAGR: 4.3%

  13. Growth in Microsoft Ecosystem-Related Tax Revenues Microsoft-related Tax Revenues, 2007 vs. 2009 Microsoft-related tax revenues will be $384 million higher in 2009 than in 2007. MS related Tax revenues includes all taxes paid by ecosystem including personal, corporate and social tax accrued from Microsoft, partners and Users Microsoft ecosystem tax base is typically more affluent due to higher compensation and stronger company revenue levels $384 million new tax revenues

  14. Growth in Microsoft Ecosystem-Related Employment Microsoft-enabled Jobs, 2007 vs. 2009 Between 2007 and 2009 the Microsoft Ecosystem created 22,200 new jobs. MS enabled Jobs includes roles related to application and development software, MS related Services and OEM support as well as those created in the channel and at end-user IT departments via the use of MS software. Roles include design, deployment, management, support and training. Other IT Jobs includes Hardware, Storage, Peripheral and networking equipment and non-MS software related design, deployment, technical maintenance, support, management and training roles, 22,200 new jobs

  15. The Microsoft Footprint In 2009, for each $1 of Microsoft revenue, there will be downstream revenue of $11.26 for the local IT sector compared to $9.69 in 2007. For each $1 of Microsoft revenue, downstream revenue will be $1. 57 higher in 2009 than in 2007. New $1.57 in downstream revenue Partners see software as the “key” that unlocks additional value-addition opportunities at their customers

  16. Summary • Growth in the IT sector is dynamic and will continue on an upward trajectory through 2013 • The software market will grow at 7.2% average compound growth rate (CAGR) between 2009 and 2013 • In the next four years, the IT sector will generate more than 95,000 new jobs, and an aggregate of $1.4 billion in new tax revenues. • The software sector will generate 60,300 new jobs, and an aggregate of $1 billion in new tax revenues between 2009 and 2013. • The Microsoft-enabled revenues will account for 40% of total IT spending in 2009. Between 2007 and 2009 the Microsoft Ecosystem generated 22,200 new jobs. • In 2009, for each $1 of Microsoft revenue, there will be downstream revenue of $11.26 for the local IT sector compared to $9.69 in 2007.

More Related