Escola de Economia e Gestão
The Impact of the Microsoft Ecosystem
in the Portuguese Economy
Fernando Alexandre, João Cerejeira and Miguel Portela
(NIPE – Universidade do Minho)
to Microsoft Portugal
September 2013
The Impact of the Microsoft Ecosystem in the Portuguese Economy

Contents
Sumário ................................................................................................................................................. 2
Summary............................................................................................................................................... 4
0. Introduction ...................................................................................................................................... 5
1. The Portuguese Economy: recent trends and prospects ............................................................ 6
1.1. Macroeconomic outlook .......................................................................................................... 6
1.2. From a low to a medium-high technology economy .......................................................... 8
1.3. Contribution of the IC&T sectors to GDP in the Portuguese Economy ........................... 9
1.4. Contribution of the IC&T sectors to employment in the Portuguese Economy ............ 10
1.5. IC&T Demand in the Portuguese Economy ....................................................................... 11
2. IC&T sectors, Software and Microsoft in the Portuguese economy ...................................... 14
2.1. Aggregate IC&T ...................................................................................................................... 14
2.2. Business and productivity software and licensing services ............................................. 16
3. Microsoft Ecosystem in the Portuguese Economy ................................................................... 20
3.1. Description and analysis of the Microsoft Ecosystem ....................................................... 20
3.2. Measuring the impact of the Portuguese Microsoft ecosystem ....................................... 22
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The Impact of the Microsoft Ecosystem in the Portuguese Economy
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Sumário
1. O ecossistema da Microsoft em Portugal é composto por 3250 empresas e inclui todos
os parceiros Microsoft localizados em Portugal. De forma a avaliar o seu impacto na
economia portuguesa, a presente análise utilizou dados da rede de parceiros da
Microsoft em Portugal, a informação disponível na base de dados internacional
Amadeus 1 , bem como dados resultantes de um inquérito conduzido junto de uma
amostra de empresas da rede de parceiros, e realizado entre março e julho de 2013.
2. Estima-se que em 2010 o valor do volume de vendas do ecossistema tenha rondado os
5383 milhões de euros, o que representou 26,2% das vendas do setor das Tecnologias
de Informação e Comunicação (TIC) na economia portuguesa. O contributo do
ecossistema da Microsoft em Portugal para o PIB português foi de 1,42%. As empresas
do ecossistema empregavam cerca de 45.000 trabalhadores, e pagaram 85 milhões de
euros em impostos diretos (IRC).
Tabela 1– O ecossistema da Microsoft em Portugal em números: estimação do ecossistema
Total do ecossistema (2010)

Total das TIC (2010)

% Ecossistema nas TIC
(2010)
% Ecossistema nas TIC
(2006)
Contas Nacionais (2010)
% Ecossistema nas Contas
Nacionais (2010)
Vendas
(milhões €)
5383
(+26,5%)
20549
(+6,3%)
Valor acrescentado
(milhões €)
2156
(+41,8%)
5925
(1,1%)
Empregados
45412
(+45,3%)
131682
(+32,7%)
Impostos
(milhões €)
85
(+99,2%)
26,2%
36,4%
34,5%
22,0%
25,9%
31,5%
151413
4350423
(IRC) 4592
1,42%
1,04%
(IRC) 1,85%
3. Entre 2006 e 2010, o ecossistema da Microsoft em Portugal registou um aumento das
vendas em 26,5%, do valor acrescentado em 41,8%, do emprego em 45,3%, e quase
duplicou o valor dos impostos directos (+ 99,2%). Esta evolução é mais favorável do
que a que se registou para o setor das TIC em Portugal para o mesmo período. Os
valores comparáveis nas TIC ao nível das vendas, valor acrescentado e número de
empregados foram de 6,3%, 1,1% e 32,7%, respetivamente.
Trata-se de uma base de dados internacional com informação financeira harmonizada para as empresas
públicas e privadas para a Europa disponibilizada pela empresa Bureau van Dijk - Company Information and
Business Intelligence (amadeus.bvdinfo.com).
1
2
The Impact of the Microsoft Ecosystem in the Portuguese Economy
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4. De forma a avaliar qual a componente do negócio do ecossistema da Microsoft em
Portugal que está diretamente relacionada com produtos, serviços e plataformas
Microsoft, implementou-se um inquérito entre março e julho de 2013. Este inquérito
visou a recolha de informação sobre a quota das vendas, valor acrescentado, emprego
e impostos, diretamente relacionados com a Microsoft. As vendas associadas de forma
direta à Microsoft representam 1280 milhões de euros, o que corresponde a 23,8% das
vendas do ecossistema. O valor acrescentado gerado e directamente relacionado com
a Microsoft foi de 600 milhões de euros. Já o número de empregados centrados nessas
tecnologias foi de 12.000, enquanto o valor de impostos sobre lucros foi de quase 25
milhões de euros.
Tabela 2 – Atividades do ecossistema da Microsoft em Portugal diretamente relacionadas com os produtos,
serviços e plataformas da Microsoft
Vendas (milhões
de €)
Valor
Acrescentado
(milhões de €)
Empregados
Impostos
(milhões de €)
1280,073
582,328
11952
24,780
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The Impact of the Microsoft Ecosystem in the Portuguese Economy
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Summary
1. The Portuguese Microsoft Ecosystem includes all Microsoft partners located in Portugal and
encompasses 3,250 firms. In order to evaluate the economic impact of that Microsoft Ecosystem in
the Portuguese Economy, the analysis used data from the Microsoft Portugal partners network, the
information available on Amadeus international database 2 and data from a survey conducted
among those companies from March to July 2013.
2. In 2010, total sales of the Portuguese Microsoft ecosystem is estimated to be about 5,383 million
euros, representing 26.2% of total sales of the IC&T sector in the Portuguese economy. The
contribution of this ecosystem to GDP is 1.42%. Firms belonging to the ecosystem employ more
than 45,000 workers, and paid 85 million euros in direct taxes (IRC).
Table 1– Microsoft Portugal Ecosystem in numbers: estimation of the ecosystem
Total Ecosystem (2010)

Total IC&T (2010)

% Ecosystem in IC&T (2010)
% Ecosystem in IC&T (2006)
Sales
(million €)
5,383
(+26.5%)
20,549
(+6.3%)
26.2%
22.0%
National accounts (2010)
% Ecosystem in National
accounts (2010)
Added value
(million €)
2,156
(+41.8%)
5,925
(1.1%)
36.4%
25.9%
Employees
45,412
(+45.3%)
131,682
(+32.7%)
34.5%
31.5%
Taxes
(million €)
85
(+99.2%)
151.413
4.350.423
(IRC) 4.592
1.42%
1.04%
(IRC) 1.85%
3. Between 2006 and 2010, the Portuguese Microsoft ecosystem grew sales by 26.5%, added value by
41.8%, employment by 45.3% and almost doubled tax contributions (+99.2%). The evolution is more
favorable for the firms belonging to the ecosystem compared to the IC&T sector. The corresponding
variation for the whole IC&T sector in sales, added value and employment is +6.3%, +1.1% and
+32.7%, respectively.
4. In order to evaluate which part of the business of the Portuguese Microsoft ecosystem was directly
related to Microsoft’s products, services and platforms, a survey was carried out from March to
July 2013. The survey intended to obtain information on the share of sales, added value, employees
and taxes directly related to Microsoft. Microsoft-related sales represent about 1,280 million euros,
23.8% of the ecosystem’s total sales. Added value directly generated by Microsoft products and
services is close to 600 million euros; the number of employees focused on those technologies is
close to 12,000 and the amount of direct taxes generated is almost 25 million euros.
Table 2 – Activities of the Portuguese Microsoft ecosystem directly related to Microsoft products, services
and platforms
Sales (million €)
Added value (million €)
Employees
Taxes (million €)
1,280.073
582.328
11,952
24.780
2
A database of comparable financial information for public and private companies across Europe which is provided by Bureau van Dijk Company information and business intelligence (amadeus.bvdinfo.com).
4
The Impact of the Microsoft Ecosystem in the Portuguese Economy
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0. Introduction
This report evaluates the economic impact of the Microsoft Ecosystem in the Portuguese
Economy. The Microsoft Ecosystem includes all partners located in Portugal and
encompasses 3,250 firms.
The international financial crisis, the sovereign debt crisis in the euro area and the overindebtedness of Portuguese Government, firms and households, has given way to the
Economic and Financial Assistance Programme agreed with the European Union, the
International Monetary Fund and the European Central Bank in May 2011. The austerity
measures imposed by the memorandum of understanding on the Government fiscal policy
and credit constraints induced very pessimistic expectations of households and firms and,
therefore, a strong contraction of domestic demand and a decrease in real GDP. Exports
increased in communication, telecommunications and computer services, showing the
structural change of the Portuguese economy towards a medium-high technology economy.
Nevertheless, the contribution of the IC&T sectors to the total economy added value remains
smaller than EU average.
In order to evaluate the economic impact of the Portuguese Microsoft Ecosystem in the
Portuguese Economy the following analysis used data from the Microsoft Portugal partners
network, the information available on Amadeus international database 3 and data from a
survey conducted those companies, which was carried out from March to July 2013. The
survey intended to obtain information on the share of sales, added value, employees and
taxes directly related to Microsoft
In 2010, total sales of the Microsoft Portugal ecosystem is estimated to be about 5,400 million
euros, representing 26.2% of total sales of the IC&T sector in the Portuguese economy. The
contribution of this ecosystem to GDP is 1.42%. Firms belonging to the ecosystem employ
more than 45,000 workers, and paid 85 million euros in IRC. Microsoft related sales within
the ecosystem are 1,280 million euros, 23.8% of the ecosystem’s total sales. The added value4
is 582 million euros and related employment is 12,000.
A database of comparable financial information for public and private companies across Europe which is
provided by Bureau van Dijk - Company information and business intelligence (amadeus.bvdinfo.com).
4 Added value (contribution to GDP) = Taxation + Profit/Loss for period [=Net income] + Costs of employees +
Depreciation & Amortization + Interest paid.
3
5
The Impact of the Microsoft Ecosystem in the Portuguese Economy
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1. The Portuguese Economy: recent trends and prospects
1.1. Macroeconomic outlook
This section provides an overview of the recent and prospective behavior of the Portuguese
economy, emphasizing its structural changes from a low to a medium-high technology
economy.
Portugal joined the European Union in 1986 and the euro in 1999. This period was
characterized by a strong economic growth and a convergence to income levels of European
Union’s richer members. In 2000, GDP per capita was over 70% of the EU and Portugal had
gone through significant modernization and structural change, becoming a service-based
economy. In 2009, services accounted for 74.4% and 62.4% of total gross added value and
employment, respectively.5
After joining the euro area a stagnation period followed, which resulted in an increase in real
GDP per capita of 2.2% between 2000 and 2010. The international financial crisis, the
sovereign debt crisis in the euro area and the over-indebtedness of Portuguese households,
firms and Government (their sum currently surpasses 300% of GDP) has given way to the
Economic and Financial Assistance Programme agreed with the European Union, the
International Monetary Fund and the European Central Bank in May 2011. The austerity
measures imposed by the memorandum of understanding on the Government fiscal policy,
implied wage cuts and tax increases, inducing very pessimistic expectations of households
and firms and, therefore, a strong contraction of domestic demand (over 7% in 2012) that was
only partially compensated by an increase in exports (4% in 2012). In 2012, real GDP level was
5.5% lower than in 2007. In 2013 the GDP growth rate is predicted to be around -2% (in the
first quarter of 2013 Statistics Portugal revealed a GDP decrease of 3.9%). Unemployment rate
is expected to keep its upward trend in the near future and is now 17.7%.
Households’ consumption (-5.5%) and business fixed investment spending (-14.4%) were the
main contributors to the strong contraction of domestic demand in 2012. In what concerns
private consumption, the reduction in the consumption of durable goods should be stressed
(-18.7% in 2011), namely the acquisition of motor vehicles, caused by credit constraints and a
deterioration of consumer confidence.
The strong decline of business fixed investment spending in 2012 strengthened the trend
observed in the last decade – its growth rate has been negative since 2008.
5
All data in this section is from Instituto Nacional de Estatística (INE) – Statistics Portugal.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy
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However, the strong reduction in the consumption of durables had a very positive effect on
the reduction of imports (-6.9% in 2012). On the other hand, the export sector has had a very
good performance (+4.1% in 2012). As a result of those changes, there was a very positive
adjustment in the external imbalances, which resulted in a balanced current account and in a
historical surplus in the trade balance.
Figure 1 – Balance of trade (2012 prices)
70000
60000
50000
Million €
40000
30000
20000
10000
0
-10000
-20000
2006
2007
2008
2009
Surplus/Deficit
Exports of goods
Exports of services
Imports of services
2010
2011
2012
Imports of goods
Source: Banco de Portugal (Bank of Portugal).
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

1.2. From a low to a medium-high technology economy
The structural change of the Portuguese economy towards a medium-high technology
economy can be assessed by foreign trade in technological services. Exports in
communication, telecommunications and computer services increased 18% from 2010 to 2012
in real terms while imports decreased 6% in real terms.
The Portuguese technological balance of payments, which accounts for all economic
transactions concerning the transfer and trade of technology and related activities, observed
its largest surplus in 2012, with 300 million Euros.
Figure 2 – International trade selected services (2012 prices)
700
600
Million €
500
400
300
200
100
0
2006
2007
2008
2009
2010
2011
Exports communication services
Imports communication services
Exports telecommunications services
Imports telecommunications services
Exports computer services
Imports computer services
2012
Source: Banco de Portugal.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 3 - Technological balance of payments (2012 prices)
1600
1400
1200
Million €
1000
800
600
400
200
0
-200
-400
2006
2007
2008
Net
2009
Credit
2010
2011
2012
Debit
Source: Banco de Portugal.
1.3. Contribution of the IC&T sectors to GDP in the Portuguese Economy
This section analyses the weight of the Information, Communication and Technology (IC&T)
sectors in the Portuguese economy, in terms of its contribution to GDP, using data from
Eurostat. Data for the added value for services and manufacturing, in 2009, show that IC&T
sectors contribute with 3.37% of total added value in services and with 0.11% of total added
value in manufacturing – see Figure 4. These weights are similar to the ones observed in
Spain, but are significantly lower than the ones observed in Germany and France. The
contribution of IC&T sectors to the added value of United Kingdom services and
manufacturing – 5.7% and 0.34%, respectively - is the highest in the group of countries
considered.
9
The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 4 - Percentage of the IC&T sector added value in added value of all branches, 2009
United Kingdom
Spain
Portugal
France
Germany
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Germany
France
Portugal
Spain
United
Kingdom
Services
3.91
3.85
3.37
3.51
5.70
Manufacturing
0.39
0.27
0.17
0.11
0.34
Source: Eurostat, European Commission.
1.4. Contribution of the IC&T sectors to employment in the Portuguese
Economy
Data for employment shows that IC&T sectors represent 1.45% of total employment in the
Portuguese economy – see Figure 5. This weight is slightly smaller than the one observed in
Spain (1.94%) and in Germany (1.97%), but is significantly lower than the weight in total
employment observed in France (2.6%) and in the United Kingdom (3.6%). The contribution
of IC&T sectors to total employment is higher in services (1.28%) than in manufacturing
(0.18%).
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 5 - Percentage of the IC&T personal on total employment, 2008-2009
United Kingdom
Spain
Portugal
France
Germany
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Germany
France
Portugal
Spain
United
Kingdom
Services
1.94
2.27
1.28
1.93
3.06
Manufacturing
0.39
0.33
0.18
0.12
0.54
Source: Eurostat, European Commission.
1.5. IC&T Demand in the Portuguese Economy
This section uses the percentage of households with internet access as an indicator of IC&T
demand in the Portuguese economy. Figure 6 shows that, in 2012, the percentage of
households with internet access increased from 31% in 2005 to 61%. This evolution
represented a convergence to the internet access levels observed in the European Union. A
survey by the European Commission suggests that the lack of skills is the main cause for the
low levels of internet access.
11
The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 6 - Percentage of households with internet access
90
80
70
60
50
40
30
2005
2006
2007
2008
2009
2010
2011
2012
EU - 27
48
49
55
60
66
70
73
76
Germany
62
67
71
75
79
82
83
85
Spain
36
39
45
51
54
59
64
68
41
55
62
69
74
76
80
61
France
Portugal
31
35
40
46
48
54
58
United Kingdom
60
63
67
71
77
80
83
Source: Eurostat, European Commission.
Data for broadband access show that more than 90% of firms have access to the internet. These
results are similar to the ones observed in the European Union. Data for mobile connectivity
show that Portuguese firms have lower rates of connectivity than European Union.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Table 1 - Broadband and Connectivity - All enterprises, without financial sector (10 persons
employed or more)
EU - 27
Germany
Spain
France
Portugal
United Kingdom
Enterprises with
broadband access
(fixed or mobile)
Enterprises with persons
employed provided with a
portable device with at least
3G technology for accessing
the Internet
Enterprises giving devices
for a mobile connection to
the Internet to more than
10% of their employees
Provide to the
persons employed
portable devices
that allow a mobile
connection to the
Internet
92
91
96
98
91
93
44
45
43
53
36
51
22
22
25
23
16
34
48
52
45
44
35
56
Source: Eurostat, European Commission.
13
The Impact of the Microsoft Ecosystem in the Portuguese Economy

2. IC&T sectors, Software and Microsoft in the Portuguese
economy
In this section we use Amadeus database to analyse the evolution of the number of
employees, sales and added value in IC&T sectors in the Portuguese economy between 2006
and 2011. We use the OECD classification of IC&T industries. 6 Then we focus the analysis in
the sector ‘Business and Productivity Sofware and Licensing Services’ (5820), where the
activities of ‘MSFT – Software para Microcomputadores, Lda.’ belong.
2.1. Aggregate IC&T
Aggregate data for IC&T sectors show that, in 2010, the total number of employees and sales
reached a maximum of approximately 132,000 and 21,000 million euros, respectively. In 2011,
total sales and employment in IC&T sectors decreased by 23% and 14%, respectively. The
added value reached a maximum of 6,400 million euros in 2008, and decreased steadily to
5,500 million euros in 2011 – that is, a reduction of about 14%.
Figure 7 - Number of employees: IC&T
140000
131,682
120000
100000
99,196
118,033
119,404
2008
2009
114,037
105,934
80000
60000
40000
20000
0
2006
2007
2010
2011
Source: Amadeus database.
6
OECD, 2009, Guide to measuring the information society 2009, Paris: http://www.oecd.org/science/sci-tech/43281062.pdf.
14
The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 8 - Sales (Million €): IC&T
25000
20000
19,331
20,549
19,693
18,001
17,663
15,727
15000
10000
5000
0
2006
2007
2008
2009
2010
2011
Source: Amadeus database.
Figure 9 - Added value (Million €)7: IC&T
7000
6000
6,428
5,858
6,306
5,644
5,925
5,540
5000
4000
3000
2000
1000
0
2006
2007
2008
2009
2010
2011
Source: Amadeus database.
Added value = Taxation + Profit/Loss for period [=Net income] + Costs of employees + Depreciation &
Amortization + Interest paid.
7
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The Impact of the Microsoft Ecosystem in the Portuguese Economy
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2.2. Business and productivity software and licensing services8
Data for the ‘Business and Productivity Software and Licensing Services’ sector shows that
employment, sales and added value achieved a maximum around 2009 and decreased
markedly in 2010. The reduction in employment, sales and added value in 2010 was,
respectively, 20%, 25% and 7% - see Figures 10, 11 and 12. These decreases are stronger than
the ones that occurred at the IC&T sectors as a whole, inducing a reduction in the share of
this specific sector. For example, the share of the ‘Business and Productivity Software and
Licensing Services’ sector sales in total sales of IC&T sectors, between 2009 and 2010, was
reduced by 36% - see Figure 14. For employment the decrease in its share was around 27% see Figure 13.
Figure 10 - Number of employees: IC&T (582)
3000
2,423
2500
1,943
2000
1500
1,655
1,761
1,373
1000
500
0
2006
2007
2008
2009
2010
Source: Amadeus database.
Given that data for MSFT is not available for the year 2011, in this section the analysis concerns the period 20062010.
8
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 11 – Sales (Million €): IC&T (582)
Sales: ICT (582)
250
234
235
203
200
150
176
127
100
50
0
2006
2007
2008
2009
2010
Source: Amadeus database.
Figure 12: Added value (Million €): IC&T (582)
120
96
100
93
81
86
80
61
60
40
20
0
2006
2007
2008
2009
2010
Source: Amadeus database.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 13 - Number of employees: share IC&T (582) in IC&T
2.5%
2.03%
2.0%
1.56%
1.5%
1.38%
1.49%
1.48%
1.0%
0.5%
0.0%
2006
2007
2008
2009
2010
Source: Amadeus database.
Figure 14 - Sales: share IC&T (582) in IC&T
1.33%
1.40%
1.13%
1.20%
1.19%
1.00%
0.80%
0.86%
0.66%
0.60%
0.40%
0.20%
0.00%
2006
2007
2008
2009
2010
Source: Amadeus database.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Figure 15 – Added value: share IC&T (582) in IC&T
1.60%
1.43%
1.49%
1.47%
1.45%
2008
2009
2010
1.40%
1.20%
1.04%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
2006
2007
Source: Amadeus database.
19
The Impact of the Microsoft Ecosystem in the Portuguese Economy

3. Microsoft Ecosystem in the Portuguese Economy
According to the Microsoft Partner Network Guide:
“The Microsoft Partner Network is designed for businesses whose primary function is to sell, service,
support, or build solutions on the Microsoft platform, or to provide solutions based on Microsoft
products and technologies to independent third-party customers. Qualifying businesses must sell more
than 75 percent of their IT solutions and services to customers outside of their own company.”
These partners form the Microsoft ecosystem, which includes very diverse companies with
very diverse activities. Among others, the ecosystem comprehends companies that sell
hardware – PCs, servers, etc. – running Microsoft software, software vendors; resellers; and
services firms that install and manage Microsoft products. The Portuguese Microsoft
ecosystem includes multinational firms, national level firms and very small local firms. In
2013, the Portuguese Microsoft ecosystem encompasses 3,250 firms divided in six categories
– see Table 2.
Table 2 – Portuguese Microsoft ecosystem in numbers (2012): number of partners
Partner type
Distributors
ISV (Independent software vendors)
LAR
OEM (Original equipment manufacturers)
Resellers
Services
Total
Number of companies
3
370
6
80
1.777
1.014
3.250
Source: Own computations.
3.1. Description and analysis of the Microsoft Ecosystem
The following analysis is based on a sample of the Portuguese Microsoft ecosystem. Table 3
presents the number of observations of the sample for the different variables and by type of
partner. The maximum of observations concerns sales, which encompasses 1,316 firms. Data
is collected from AMADEUS database.
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The Impact of the Microsoft Ecosystem in the Portuguese Economy

Table 3 – Portuguese Microsoft ecosystem in numbers (2010): number of observations9
Partners
Sales
Distributors
ISV
LAR
OEM
Resellers
Services
Total
3
115
4
26
726
442
1316
Added
value
3
84
3
22
488
318
918
Employees
Taxes
3
113
4
26
707
433
1286
3
110
4
24
612
398
1151
Source: Own computations.
Table 4 – Portuguese Microsoft ecosystem sample in numbers (2010)
Partners
Distributors
ISV
LAR
OEM
Resellers
Services
Total
Sales
(euros)
Added value
(euros)
Employees
Taxes
(euros)
756,012,338
128,245,980
191,787,454
42,310,193
969,103,000
621,053,381
2,708,512,346
32,147,926
78,539,850
15,085,039
7,275,065
237,968,565
267,917,839
638,934,284
505
1,690
453
297
7,966
7,583
18,494
4,026,558
1,840,578
1,128,279
225,358
6,864,116
20,570,804
34,655,693
Source: Own computations and Amadeus database.
Table 4 presents data for sales, added value, employees and taxes for the different type of
partners for 2010. We use these data to estimate the size of the Portuguese Microsoft
ecosystem.
Next, we present data for the geographical distribution of firms belonging to the Portuguese
Microsoft ecosystem, firms’ size, sales and capital nationality, for most recent data on
AMADEUS database.
Table 5 presents the geographical distribution of the firms belonging to the Portuguese
Microsoft ecosystem. As expected, more than 90% of the firms are based on the regions of
Centro, Lisboa and Norte.
9
Number of companies identified in AMADEUS database.
21
The Impact of the Microsoft Ecosystem in the Portuguese Economy

Table 5 - Geographical distribution of the Portuguese Microsoft ecosystem
NUTs II
Alentejo
Algarve
Centro
Lisboa
Norte
Madeira
Açores
Firms Distribution (%)
54
3.59
32
2.13
289
19.23
592
39.39
486
32.34
27
1.80
23
1.53
Source: Own computations and Amadeus database.
In Table 6 we present data for the distribution of firms according to the number of workers.
The data show that 73% of the firms have less than 10 workers and that 5% have more than
50 workers.
Table 6 - Firms’ size (per number of workers)
Number of workers
[1-10[
[10-50[
[50-250[
[250,…[
Firms
1047
308
62
11
% of Firms
73.32
21.57
4.34
0.77
Source: Own computations and Amadeus database.
In what concerns sales, we have an average of 1,9 million euros, with a median value of
239,000 euros. 5% percent of the firms show sales bellow 18,000 euros, while 5% sell above 4,7
million euros (1% sell above 25 million). Finally, 50% of the firms sell between 92,000 and 700,
000 euros.
In what concerns the nationality of firms’ ownership data show that 90% are controlled by
Portuguese capital.
3.2. Measuring the impact of the Portuguese Microsoft ecosystem
The sample presented in the previous section was used to compute the values of the whole
Portuguese Microsoft ecosystem. The estimated results for sales, added value, employees and
taxes are presented in Table 7.
22
The Impact of the Microsoft Ecosystem in the Portuguese Economy

In 2010, total sales of the Portuguese Microsoft ecosystem is estimated to be almost 5,400
million euros. These sales represent around represent 26.2% of total sales of the IC&T sectors
of the Portuguese economy – see Figure 8 in section 2.1. In what concerns the weight of
Portuguese Microsoft ecosystem in total employment of the IC&T sectors, the estimates
suggest that it represents 34.5%. For the added value, estimated results show that the
Portuguese Microsoft ecosystem represents 36.4% of the IC&T sectors. According to these
estimates, the contribution of the Microsoft Portugal ecosystem to GDP (at factor cost) is
1.42%. Direct taxes on profits paid by companies belonging to the Portuguese Microsoft
ecosystem are estimated to account for 1.85% of total corporate taxes.
Table 7– Microsoft Portugal Ecosystem in numbers: estimation of the ecosystem (2010)
Sales
(euros)
Added value
(euros)
Employees
Taxes
(euros)
Distributor
756,012,338
32,147,926
505
4,026,558
ISV
412,617,501
345,949,339
5,534
6,191,035
LAR
287,681,181
30,170,078
680
1,692,419
OEM
130,185,209
26,454,782
914
751,193
Reseller
2,372,033,101
866,537,172
20,022
19,930,611
Services
1,424,769,521
854,304,053
17,758
52,409,033
Total
5,383,298,851
2,155,563,350
45,412
85,000,850
[3,867,475,598;
6,899,122,103]
[1,290,117,725;
3,021,008,9759]
[34,847;
55,977]
[28,649,195;
141,352,504]
151.413.479.000
4.350.423
(IRC)
4.591.600.000
1.42%
1.04%
(IRC) 1.85%
Partners
Confidence interval
(confidence level 95%)
National accounts
Share National accounts
Share IC&T (2010)
26.2%
36.4%
34.5%
Share IC&T (2006)
22.0%
25.9%
31.5%
Source: Own computations and Amadeus database.
The share of Microsoft Ecosystem in IC&T sectors increased in all variables, from 2006 to 2010.
For sales the share increased by 4.2 pp, for added value the increase was 10.5 pp and for
employment the share of Microsoft Ecosystem increased by 3 pp.
Table 8 shows the growth rates for the variables considered in this analysis and for different
type of partners between 2006 and 2010. For the ecosystem as a whole we should stress the
growth rates of taxes that have increased by almost 100%. Taking into account the
23
The Impact of the Microsoft Ecosystem in the Portuguese Economy

performance of the Portuguese economy in this period, added value and employees have also
increased at a very strong pace with growth rates of 42% and 45%, respectively. In the period
2006-2010, the Portuguese Microsoft ecosystem sales increased by 26.5%, which compares
with a growth rate of sales for the IC&T sectors in the same period of about 6.3% - see section
2.1.
Table 8 – Microsoft Portugal Ecosystem: variation 2006-2010
Partners
Distributor
ISV
LAR
OEM
Reseller
Services
Total
 Sales
 Added value
 Employees
 Taxes
+210,032,201
+38.5%
+15,366,601
+91.6%
+124
+32.5%
+2,886,082
+253.1%
+167,458,129
+68.3%
+147,112,330
+74.0%
+1,994
+56.3%
+2,732,413
+79.0%
+110,651,621
+62.5%
+701,424
+2.4%
+113
+19.8%
+1,160,148
+218.0%
+14,178,646
+12.2%
+12,458,756
+89.0%
+462
+102.0%
+81,710
+12.2%
+233,602,645
+10.9%
+156,256,733
+22.0%
+5,160
+34.7%
-5,369,955
-21.2%
+391,240,365
+37.9%
+303,606,778
+55.1%
+6,309
+55.1%
+40,849,054
+353.4%
+1,127,163,608
+26.5%
+635,502,623
+41.8%
+14,161
+45.3%
+42,339,452
+99.2%
Source: Own computations and Amadeus database.
Table 9 – Estimates using survey data
Distributor
ISV
LAR
OEM
Reseller
Services
Total
Number % Microsoft
(weighted average
of
by the square root
answers
of sales)
3
7.06%
Sales
(euros)
Added value Employees
(euros)
Taxes
(euros)
53,396,600
2,270,585
36
284,393
143,224,403
120,083,098
1,921
2,148,981
175,376,288
18,392,292
414
1,031,733
22,237,248
4,518,805
156
128,313
401,602,045
146,710,896
3,390
3,374,394
484,236,275
290,352,233
6,035
17,812,253
1,280,072,859
582,327,908
11,952
24,780,067
34.71%
24
[16.39%;53.04%]
60.96%
3
[51.87%;70.05%]
17.08%
11
[0%;35.18%]
16.93%
53
[9.46%;24.40%]
33.99%
47
141
[21.87%;46.11%]
Source: Own computations and Amadeus database.
Note: Confidence level at 95% in square brackets.
24
The Impact of the Microsoft Ecosystem in the Portuguese Economy

In order to evaluate which part of the business of the Portuguese Microsoft ecosystem was
directly related to Microsoft’s products, services and platforms, a survey was carried out from
March to July 2013. The survey intended to obtain information on the share of sales, added
value, employees and taxes directly related to Microsoft. We got 141 valid answers by firms
belonging to the Portuguese Microsoft ecosystem with data available in AMADEUS database
and information on the share of Microsoft related revenues in products, services and
platforms. Table 9 presents the results for sales, added value, employees and taxes given by
the product of the share of Microsoft related revenues (weighted by the square root of sales
within partner type) and the values for those variables presented in Table 7. Microsoft related
sales represent about 23.8% (=1,280,072,859/5,383,298,851) of the ecosystem total sales. Added
value directly generated by Microsoft products and services is close to 600 million euros; the
number of employees is close to 12000 and the direct amount of taxes is almost 25 million
euros.
25