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

Copyright 2009 IDC 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 3

Copyright 2009 IDC Project 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

Copyright 2009 IDC 52 Countries Covered 5

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

Copyright 2009 IDC Software Powers Much of IT Hardware Vendors Channel & Services Firms Non 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 7

Copyright 2009 IDC Emerging* vs. Mature Economies 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 8

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

Copyright 2009 IDC The 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 $

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

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

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

Copyright 2009 IDC Growth Through Innovation $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 14 Source: IDC Economic Impact Study, 2009; aggregate of 52 countries studied Million

Copyright 2009 IDC 15

Copyright 2009 IDC Methodology 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 16

Copyright 2009 IDC Labor Rates, Exchange Rates IT Economic Impact Model Standard Definitions IT Spending Statistics by State & Country Validation by Cross Checks Import/Export Factors Study Inputs Internal Review, Quality Control Macroeconomic Data 17

Copyright 2009 IDC EIM 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 Jobs MS% IDC CIS and Tracker Research IDC 2009 EIM IT Spending Microsoft Footprint MS$ Pro Forma or Local Estimates 18