Kuala Lumpur, January 21, 2008 – Economists have long recognized the important role information technology (IT) can play in a country’s development.  To better understand that role, and to quantify the direct benefits to local economies from IT, in 2007 International Data Corporation (IDC) conducted a study of the economic impact of IT in 82 countries.

From that study, IDC reports that Malaysia’s IT sector is expected to generate more than 98,000 new jobs from 2007 to 2011 and account for the creation of more than 800 new IT companies within the same time frame.

IDC and Microsoft shared the above at a media briefing session here today, to present IDC’s IT Economic Impact and Microsoft Country Footprint for Malaysia. Present were Amie White, Consulting Director, Global Research Organization, IDC, and Tyson Dowd, Senior Director, Malaysian Software Economy, Microsoft Malaysia.

“The IT Economic Impact study found that not only does IT drive significant growth in skilled jobs, but also that spending on software creates a disproportionate share of that job growth,” said White.

“Despite the economical challenges Malaysia is expected to face throughout 2008, IDC is confident the IT industry will see similar, if not better, growth and development, with significant contributions from key stakeholders within the industry, which includes software economy mover, Microsoft Malaysia.

“Further, we can also conclude that companies selling products that run with or on Microsoft software, or that service and distribute Microsoft software – the Microsoft ecosystem – play a key role in driving the IT industry’s overall contribution to job growth and economic development,” White added.

Other key findings for Malaysia are as follows:

* The IT market in Malaysia has the profile of an emerging economy, with 63% of IT spending in 2007 on hardware and only 12% on software.   IT spending is 2.9% of GDP, compared to a world average of 2.5%.
* Overall IT spending is expected to hit $4,553 million (16,749 billion MYR) in 2007 and grow 9.1% a year between now and 2011.  Software spending is expected to grow 7.5% annually.
* Although software is a small percentage of IT spending, overall software related employment for 2007 is expected to be nearly 31.8% of a total IT employment that measures more than 411,000 employees.  Microsoft-related employment is expected to be 44% of total IT employment.

In 2007, the Microsoft ecosystem – companies that sell products that run with or on Microsoft software, or that service and distribute Microsoft software – is expected to generate more than $1,740 million (6,402 billion MYR).

“That means that for every RM1 of Microsoft revenue in Malaysia, there are an associated RM14.92 generated by other companies in the country,” White added. “These are revenues of OEMs selling hardware running Microsoft software, revenues for software packages (excluding Microsoft packages) that run on Microsoft platforms, and services supporting Microsoft related software.  Some of the hardware revenue, much of the software revenue, and most of the services revenue accrue to local companies.”

Microsoft Malaysia invests close to RM26 million annually in industry-wide programmes to grow the Malaysian software economy, said Dowd. “We have 5,000 solution providers in our partner ecosystem in Malaysia (an increase of 40% from last two years from 3,500), of which more than 800 are independent software vendors (ISVs).

“Further, one third of companies listed on Malaysia’s MESDAQ technology bourse are Microsoft partners, and from our estimates, these solution providers have created some 50,000 jobs in Malaysia. These ecosystem revenues in Malaysia will help drive future investment, in infrastructure, people, marketing, and business development,” Dowd added.

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