Top 1000 2010: Company 3 - Microsoft
Innovating giant
Microsoft has had a presence in Ireland since 1985, and the company is a major provider of employment in Ireland.
The world has changed for Microsoft. It was once the undisputed king of the tech landscape but it now has stiff competition for that title from upstarts such as Google and Apple. It has fought back with new innovations in the mobile phone market and in search – its Bing search engine and a partnership with Yahoo.
Microsoft Newsfeed
April 23rd: Microsoft profit rises, shares fall
Microsoft Corp beat analysts' estimates with a 35% jump in quarterly profit, lifted by sales of Windows 7, but its shares fell more than 3% as investors expected the company to benefit more from a recovering technology sector.
March 22nd: Internet Explorer loses market share in Europe
Microsoft's Internet Explorer has lost market share in major European markets, such as France, Britain and Italy, after the U.S. software firm started to make it easier for European consumers to use competing browsers. Its pledge to allow easier access to rival browsers in Windows by the middle of May, ended a long antitrust dispute with the European Union. The company has started to send a choice screen, where consumers can easily click on rival browsers, to almost 200 million old and new computers.
January 29th: Microsoft profit beats expectations on strong Windows 7 sales
Microsoft Corp posts a bigger-than-expected 60% jump in quarterly profit, helped by strong sales of Windows 7, and said it expected business technology spending to recover this year. The world's biggest software maker says that net profit came to $6.7bn, or 74 cents per share, for its fiscal second quarter, versus $4.2bn, or 47 cents per share, a year ago. Microsoft's revenue rose 14% to $19.02bn, including $1.71bn of deferred revenue from the Windows 7 launch in October.
October 22nd: Windows 7 gives a good first impression
Microsoft's new operating system, Windows 7, launches to a generally warm reception amongst users and computer vendors alike. Visually the new service looks much the same as its predecessor Windows Vista, which was largely criticised as slow, bulky and awkward to use. But Microsoft promises a vastly improved experience for those who take the plunge, including a faster interface and less bugs and interruptions.
But, despite the challenges, Ireland still continues to benefit hugely from the software giant's massive investment. This country has been a major beneficiary of Microsoft's worldwide dominance over the past two decades. Its massive Sandyford operation is one of the most significant pieces of foreign direct investment ever to come to this country, helping to pave the way for the economic success story Ireland became during the 1990s.
The company has estimated that it spends over €150m per annum and contributes over €300m annually to the exchequer. Its Irish operation claims to source 80% of its raw materials and services in Ireland.
It has also said that it exports about €8bn worth of goods from Ireland annually, accounting for just under 90% of its total EMEA business and about 5.6% of Irish GDP. Microsoft partners, firms that do outsourcing work for the company, are understood to get about €350m per year and for every €1 in revenue it makes in this country its local partners make about €8.
Microsoft channels much of the profits from its international business through its Irish operations, benefitting from Ireland's 12.5% corporation tax rate and reducing the tax it pays in the US. Round Island One Limited, the Irish holding company for Microsoft's operations here, has unlimited liability so does not file detailed accounts with the Companies Registration Office.
But in May 2008 it was reported that in the previous year the Irish subsidiary had made more than €1.2bn in profits and paid a mere €460,000 in corporation tax. The Irish operation later paid a €1.2bn dividend payment to its US parent company for 2007.
The company first opened its doors in Ireland in 1985 with a small manufacturing facility employing just over one hundred people. Since that time, Microsoft Ireland has grown to encompass four distinct operations at its campus in Sandyford in Dublin, employing over 1,200 full time employees and 700 full-time contract staff.
In terms of size, the Irish operation only comes behind the operation in Japan and at US headquarters in Redmond and is divided into a number of distinct operations.
The Microsoft European Operations Centre (EOC) was established in 1985 and provides key support for sales and customer support across 85 different countries. It has responsibility for 32 European subsidiaries and certain markets in Africa, Mediterranean and Middle East countries.
Three years after the establishment of the EOC, Microsoft established its European Product Development Centre (EPDC) in Sandyford. This was a major vote of confidence in the company's new Irish base and brought very welcome high end jobs before the economy began to take off. Employees in the EPDC play a significant role in the development and localisation of over 100 products in 27 different languages. Over the years, the work of the group has evolved and now also includes some testing, engineering and core development work.
Nearly twenty years on, in 2005, in a further vote of confidence in its now well-established European base, Microsoft established the European Development Centre (EDC). This is a new centre for research and development (also based in Sandyford) and it focuses on research and development of technologies that will become part of a number of Microsoft's core products.
Of course, to some in the US, Ireland's biggest attraction for a company like Microsoft is the ability to reduce its tax bill. Nevertheless both Ireland and Microsoft have definitely benefited from a strong partnership.
In the rapidly changing tech business, it will be interesting to watch how this develops.
