Microsoft 'ecosystem' worth $7.9 billion in Middle East says IDC

IDC has released a study on the economic impact of the IT industry, and of Microsoft, on economies in the Middle East.

According to the study, 210,000 new jobs and 4,100 new companies will be created in the IT industry in the region over the next four years. Overall IT spending in the region will grow by 12.4% per year to reach $22 billion in 2011, with over 740,000 people employed in the industry by then.

The research, part of a global study commissioned by Microsoft and based on the IDC Economic Impact Model, assesses local IT expenditure, and the contribution of the IT industry to creation of new jobs and new companies, and tax revenues. The study covered nine countries in the region - Egypt, Jordan, Kuwait, Oman, Qatar, Pakistan, Saudi Arabia, Turkey and the UAE.

The study also looks at the impact that Microsoft has on revenue and employment in the IT sector, through the ‘Microsoft software ecosystem'. This ecosystem is defined by IDC as ‘people working at IT companies and IT professionals who create, sell or distribute products that run on Microsoft platforms'.

In the Middle East in 2007, this ecosystem accounted for 57% of all IT employment in the region, and generated more than $7.9 billion. Globally the Microsoft ecosystem accounts for 42% of the global IT workforce, with revenues of more than $400 billion, according to the report. The ecosystem report also highlights the benefits to partners of expenditure on Microsoft solutions - for every dollar of Microsoft revenue, partners generate a further $15.56 in the region, according to the study. The global average is $7.79, although by country across the Middle East the amount varies from around $6 in Qatar, Jordan and Egypt to almost $20 in the UAE, Turkey and Saudi Arabia.

Jyoti Lalchandani, vice president and regional managing director of IDC MEA, said that the study highlights the disproportionate influence of the software on IT growth, and Microsoft's role in the software sector.

"Increases in IT employment in any country are largely driven by software. Software ecosystem tend to be more complex and diverse in terms of support and services that surround software sales in comparison to selling hardware," Lalchandani said. "If you look at the average size of a hardware company and a software company, you will see the difference."

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IDC Economic Impact Study, October 2007

Global
IT Spending: $1.2 trillion; avg. 2.5% of GDP
Microsoft related employment as % of all IT employment: 42%
Microsoft ecosystem revenue: $400 billion
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $7.79

Middle East
IT Spending: $14.2 billion; 1% of GDP
IT spending growth: 12.4% per year
Software spending growth: 12.1% per year
Microsoft related employment as % of all IT employment: 57%
Microsoft ecosystem revenue: $7.9 billion
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $15.56

Saudi Arabia
IT Spending: $3.4 billion; 0.9% of GDP
IT spending growth: 11.2% per year
Software spending growth: 12.5% per year
Microsoft related employment as % of all IT employment: 51%
Microsoft ecosystem revenue: $1.6 billion
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $18.53

UAE
IT Spending: $2.7 billion; 1.5% of GDP
IT spending growth: 10.2% per year
Software spending growth: 13.9% per year
Microsoft related employment as % of all IT employment: 58%
Microsoft ecosystem revenue: $1.4 billion
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $19.78

Kuwait
IT Spending: $686 million; 0.7% of GDP
IT spending growth: 10.7% per year
Software spending growth: 11% per year
Microsoft related employment as % of all IT employment: 52%
Microsoft ecosystem revenue: $331 million
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $13.48

Qatar
IT Spending: $357 million; 0.6% of GDP
IT spending growth: 7.4% per year
Software spending growth: 13.7% per year
Microsoft related employment as % of all IT employment: 57%
Microsoft ecosystem revenue: $168 million
Number of dollars generated by ecosystem for every dollar in Microsoft revenues: $6.65