Aid to Recovery: The Economic Impact of IT, Software, and the Microsoft Ecosystem Worldwide

1. Aid to Recovery: The Economic Impact of IT, Software, and the Microsoft Ecosystem Worldwide Prepared for Microsoft Corporation October 2009

2. Key Findings Study Background Impact of IT Impact of the Microsoft Ecosystem Growth through Innovation Appendix: Methodology Agenda 2

3. 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 Key Findings: Worldwide* 3

4. 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 Project Background 4

5. 52 Countries Covered 5

6. IT Is a Driving Economic Force Growth Expected from Year End 2008 through 2013 6 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

7. Software Powers Much of IT • 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 Total* IT Employment, 2009 Total* IT Spending, 2009 Hardware Vendors Channel & Services Firms Non Software Workers 50% Software Vendors Channel & Services Firms Software Workers 51% Software 21% $1.4 Trillion 35.6 Million 7 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

8. Emerging* vs. Mature Economies Emerging* Country Share of GDP and IT Spending * Excludes Australia, Canada, Japan, New Zealand, United States, and Western Europe 8 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

9. Emerging vs. Mature Economies Percentage Job Growth Expected from 2009-2013 9 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

10. 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 The Microsoft Ecosystem, 2009 10

11. Microsoft-Related Employment, 2009 Hardware & Software Cos. 19% IT Professionals 59% Services & Channels Firms 22% 14.9 Million IT Jobs 11 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

12. Investment by the Ecosystem, 2009 Includes spending on R&D, test and development, sales and marketing, administration, and training $179 Billion 12 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

13. 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 Economy 13 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

14. $800 Billion Net New Business Revenue from Cloud Computing* Growth Through Innovation • 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 Million * Microsoft calls it Software + Services 14 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied

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16. 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 Methodology Steps 16

17. Study Inputs IT Spending Statistics by State & Country Validation by Cross Checks Standard Definitions Import/Export Factors IT Economic Impact Model Macroeconomic Data Labor Rates, Exchange Rates Internal Review, Quality Control 17

18. EIM and Footprint Methodology • Local IT Production • Domestic Spending • Export • Distribution Economic Impact Model Hardware Non Software-Related Software Services • Software • SW-rel IT Services • SW-rel Channels Channels IT Spending IDC 2009 EIM • Microsoft Related • Domestic Spending • Jobs • Software-Related • Domestic Spending • Jobs MS% IDC CIS and Tracker Research MS$ Microsoft Footprint Pro Forma or Local Estimates 18