2. Executive Summary
• Growth in the IT sector is dynamic and will continue on an upward
trajectory through 2011
• The software market will grow at 9% average compound growth
rate between 2006 and 2011
• In the next five years, the IT sector will generate over 46,000 new
jobs; annual tax revenues will be almost $700 million higher in
2011 than 2006
• Approximately 53% of all Czech IT employees are engaged in
creating, distributing, or servicing software – for external
customers or internal corporate users – and just over 65% of all IT
tax revenues come from the software-related sector
• For every dollar of Microsoft revenue in the region another $7
were generated by other companies selling hardware or software
that works on Microsoft operating systems or servicing that
software.
Source: IDC IT Economic Impact Study, 2007, Czech Republic
4. Czech Republic’s IT Industry – Source of
Economic Growth
IT as a % of GDP
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
3.2% 2.9% 2.6% 2.6% 2.5% 2.5% 2.7% 2.8% 2.9% 3.0% 3.1%
$6,000
$5,000
YE 2000-2010
$4,000
$m
$3,000
$2,000
$1,000
$0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
IT spending ($m) IT Tax revenues ($m)
Source: IDC IT Economic Impact Study, 2007, Czech Republic
5. IT Market Topics and Issues in Czech Republic
§ Software and Services Pushing IT Market
Growth
§ Hot Areas of Interest: Security, Application
Integration, BI and Analytics, Mobile
Solutions
§ SMB Uptake in Applications Space,
Driving Overall Apps Market Growth
§ Czech IT Market Beginning to Display
Development Trends in Line with Mature
WE Countries, but with Much Higher
Growth Rates
§ Central European Market Emerging –
Czech Solutions Providers Going
Regional, Foreign Firms Coming to Czech
6. IT Will Benefit Local Economies
$1,800
IT-Related Tax Revenues
$1,500
$695 million in
new tax revenues
over 5 years
($M)
$1,200
$900 Personal & Social Taxes
Corporate Income Taxes
VAT
$600
2006 2007 2008 2009 2010 2011
Source: IDC IT Economic Impact Study, 2007, Czech Republic
7. IT Will Create New Jobs
IT-Related Employment in Czech Republic
190
Thousands
180
170 Between 2006 and
2011 there is
160
growth of 46,000+
150 new IT jobs
140
130
120
Hardware employees
110 Software employees
100 Channel and Services employees
IT Professionals
90
2006 2007 2008 2009 2010 2011
Source: IDC IT Economic Impact Study, 2007, Czech Republic
8. IT and Software Related Employment in 2006
• Close to 133,000 people were employed in IT-related
functions Czech Republic in 2006
• Between 2006 and 2011, IT growth will fuel an
additional 46,000 new IT jobs
• While software represents only 21% of total IT
spending, it drives 53% of employment
2006 IT Employment by Sector
Local End User IT
IT Producers Local Channel Organizations
(Hardware & Service
& Software) Firms
13,975 49,269 69,015
Source: IDC IT Economic Impact Study, 2007, Czech Republic
9. Software’s Influence will Continue to Increase
IT Spending, 2006 Employment, 2006
Software
Vendors Hardware
Hardware & Channel Firms Vendors
Services Services Firms Channel Firms
79% Software IT Professionals Services Firms
21% IT Professionals
$3.61 Billion
132,259 IT Jobs
Source: IDC IT Economic Impact Study, 2007, Czech Republic
10. Software Related Employment
Total IT Employees
• Software-related 200,000
employment in 2006 was
more than 70,000 people 150,000
• By the end of 2006,
software accounted for 100,000
53% of IT employment in
Czech Republic, and 50,000
reach 57% by 2011
0
2001 2004 2007 2010
Total Software and Software Related Employees
Other IT Professionals
Other Services and Channels
IT Hardware
Source: IDC IT Economic Impact Study, 2007, Czech Republic
11. Software Drives IT Benefits
New Software-Related Jobs Added Each
Year
8,000
7,000
46,000 new IT jobs
6,000 between 2006 and
2011
5,000
Most will be software-
4,000 related
3,000
2,000
1,000
0
2006 2007 2008 2009 2010 2011
Source: IDC IT Economic Impact Study, 2007, Czech Republic
12. The Impact of Microsoft in 2006
• MS-related employment* for Czech Republic in 2006
was almost 58,000 jobs, representing 44% of total IT
employment
100,000
Microsoft-related employment
80,000
Total employement
60,000
40,000
20,000
0
Hardware Software Services & IT Professionals
Channels
* Employees in companies that create, sell, distribute, or service hardware or software that runs on Microsoft
operating systems and IT employees at user organization that develop applications, service, or maintain such
hardware or software
13. Related IT Spending - Hardware,
Software and Services, 2006
For each $1 of Microsoft revenue, there is downstream revenue of
$9.2 for the local IT sector
In 2006, Microsoft related tax revenue was more than $440 million
Services
19%
Software
14%
Hardware
67%
Source: IDC IT Economic Impact Study, 2007, Czech Republic
14. Study Methodology
IT Spending
Statistics by Validation by
Country Country Officials
Standard Import/Export
Definitions IT Economic Factors
Impact Model
Tax Rates, Labor Macroeconomic
Rates, Exchange Data
Rates
IDC Analysts in 45 Countries
Source: IDC IT Economic Impact Study, 2007, Czech Republic
