IDC: Microsoft 'ecosystem' totals $425B in annual revenue

IDC: Microsoft 'ecosystem' totals $425B in annual revenue

Study commissioned by vendor says its partners employ 42% of IT industry workers

Microsoft openly credits its technology partners, from resellers to systems integrators to independent software vendors (ISVs), for much of its financial success.

Now a study, conducted for Microsoft by market-research firm IDC, claims to quantify how much those partners -- as well as the governments where the employees of those companies work -- benefit from the software vendor.

According to IDC, the so-called Microsoft ecosystem, including about more than 640,000 hardware, software, services and distribution firms, employs 42 percent of all IT industry workers worldwide.

Those employees will pay a total of more than US$500 billion in taxes this year, according to the study, which was released at a press conference in Budapest, Hungary, this week -- the same day that Microsoft announced several rounds of planned investments in Hungary and Romania.

Moreover, Microsoft's partners will garner a total of about US$425 billion in revenues this year, while investing US$100 billion in local economies via spending on research, development, marketing, sales and support, IDC said. The study also found that for every dollar Microsoft makes this year, its partners will earn a total US$7.79.

Although the research was sponsored by Microsoft, the figures may provide more ammunition for the company as it seeks to expand its business in Third World countries where its software is often already widely used, but on a pirated basis.

As Microsoft pressures the governments in those countries to crack down on piracy, some are starting to consider the alternative: encouraging the use of open-source software or adopting it outright.

IDC's findings were based on a study of 82 countries and regions. The research firm said the study shows that overall IT spending will total US$1.24 trillion worldwide this year and will grow at an annual rate of 6.1 percent through 2011 -- doubling the expected global growth in gross domestic product.

To calculate the amount of spending within the Microsoft ecosystem, IDC said that it "started with IT spending by category in each country and region, and assigned a percent of the category that either ran on a Microsoft operating system or that was involved in servicing Microsoft software." Those percentages were taken from previous research done by the firm, it added.

The research firm said it then estimated Microsoft's revenues for each country or region and "deducted that from the total Microsoft-enabled revenue. What was left is the Microsoft-enabled revenue from companies other than Microsoft."

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