Microsoft Industry Analysis in Poland from a Capital Investment Perspective
Presented by: Brian Karasik, Syed Saeed
Business Environment
•FDI to Poland in 2010 = $10 billion. •10% increase from 2009•Benefits of FDI (tax revenue, improved skills)
•Taxation and Special Economic Zone•Income and real estate Tax exemptions/reductions•Low corporate income tax rate of 19%
•Labor Cost and Skills •Among lowest cost in the region•Maintain high education and skill level
Money to be made in Poland
Pro-American market & Cost-effective market
Awarded €67bn in Structural Funds by EU
Polish SME used Government Funds to Update IT Infrastructure
The Poland National IT Infrastructure Plan budgeted 75% of €1bn on
Expanding wireless Broadband services
Strong initiative to be a EU member
Software Piracy Rate Declined Slightly
The rate of software piracy in Poland totaled 54%
Poland software producers incurred a $506m loss
Worldwide software producers incurred $51.4bn
Microsoft products are the most counterfeited programsWindows and Office
60% of Adobe Photoshop software is installed illegally
Legal Reform for Piracy
Stronger enforced provisions in copyright infringement cases
Criminal sanctions in the Optical Disc Verdict
Criminal provisions addressing Internet Piracy
Innovation-driven Connectivityeconomies score
United States 7.71Sweden 7.47Netherlands 6.75United Kingdom 6.44Canada 6.15Australia 6.14Singapore 5.99Japan 5.87Finland 5.82Ireland 5.70Germany 5.37Hong Kong SAR 5.33France 5.22New Zealand 4.85Belgium 4.65Korea 4.17Italy 3.99Czech Republic 3.71Spain 3.49Poland 2.79Hungary 2.72Greece 2.62Slovakia 2.09
Overview of 2009 Results
Methodology
© Nokia Siemens Networks
• Best Performing Country
• Poland
Positive Drivers
• High rates of in business usage
• Strong proportion of ICT skills and specialist jobs
• Strong share of corporate data revenue from
IP and Ethernet
Areas for improvement
• Relatively slow broadband speeds
• Few fiber access networks
• 3G Diffusion rate low
• Low government spending on
hardware, software and IT services
• Low online government services usage
• Low spending on ICT resources
• Poor PC and secure server penetration
Country example: Strong business connectivity underlines Poland performance
© Nokia Siemens Networks
Source: OECD, ICT database and Eurostat, Community Survey on ICT usage in enterprises, July 2010.
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Aus
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Finl
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Fran
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PolandSlovakia
Czech
Use of broadband, 2009 or latest available year
Polish fixed broadband availability is low compared to the other European countries.
135.36
91.29
79.53
62.76
59.45
57.06
56.71
54.24
51.64
50.11
49.25
48.34
46.85
41.01
40.63
40.20
39.85
39.75
39.39
38.87
38.50
35.18
33.25
32.70
32.50
32.46
31.33
30.80
29.91
27.72
0 20 40 60 80 100 120 140 160
Turkey
Luxembourg
Portugal
Norway
Australia
New Zealand
Mexico
Canada
Czech Republic
Austria
United States
Spain
Slovak Republic
Netherlands
Iceland
Denmark
Poland
Belgium
Hungary
Germany
Korea
Japan
Switzerland
France
Sweden
Finland
Ireland
United Kingdom
Italy
Greece
Broadband average monthly subscription price, Oct. 2009, USD PPP
Average Subscription Price, USD, PPP
Median
Poland
Slovakia
Czech
UNECE Statistical Database, Economic Statistics
UNECE Statistical Database, Economic Statistics
Forecast PolandForecast Computer
Sales US$ mln 5% - 95% 5% - 95%Date Annual Upper Limit Lower Limit
2012 3,107.74 3,141.43 3,074.06
2013 3,320.63 3,368.27 3,272.99
2014 3,526.54 3,584.88 3,468.19
2015 3,724.54 3,791.91 3,657.16
Forecast CzechForecast Computer Sales
US$ mln 5% - 95% 5% - 95%Date Annual Upper Limit Lower Limit
2012 1,141.30 1,177.86 1,104.75
2013 1,184.08 1,235.78 1,132.38
2014 1,226.38 1,289.69 1,163.06
2015 1,268.13 1,341.25 1,195.02
Forecast SlovakiaForecast Computer
Sales US$ mln 5% - 95% 5% - 95%Date Annual Upper Limit Lower Limit
2012 916.97 925.24 908.71
2013 919.30 930.99 907.61
2014 920.86 935.18 906.54
2015 921.91 938.44 905.37
Results
Transportation Infrastructure
Roadways•90% of roads are paved•Road Construction Projects linking adjacent countries underway
Railroad•Extensive network of rails•Rail infrastructure is old and not maintained limiting higher speeds
Airports•Airports and facitilities have been modernized and expanded
Selection of AR
Possible AR’s Identified•Alternati Projekt – Wroclaw, Poland•Makro Makro 2000 Ltd – Wroclaw, Poland•GM Records – Warsaw, Poland•Agmark – Warsaw, Poland•Takt – Warsaw, Poland
NOTE: All Possible AR’s perform CD/DVD pressing/burning, printing and packaging
Wroclaw vs Warsaw
•Both are large cities
•Both are located near Transportation (Roads, Rail and Airports
•Warsaw average salary is 22% higher than Wroclaw
•Wroclaw is closer to exist AR’s in Germany and Czech Republic
•Lower cost to compete against AR’s
Choice = Wroclaw
Alternati Projekt vs Makro Makro
Both provide similar services
Alernati has licensing contracts from Phillips, Toshiba and DVD FLLC
Makro Makro does not mention any licensing contracts on website
Possible capacity issues at Alternati?
Choice = Alternati Projekt
Process Flow
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Recommendations
1. AR should partner with all of its suppliers and OEM customers in order to maintain a constant supply of communication between parties
2. AR should always, where possible have contingencies plans as far as backup suppliers and motor transport in case of unforeseen circumstances
3. AR should always look to reduce costs, but not to sacrifice service
4. Microsoft and AR should run simulation models in order to see if supply chain is adequate and there are no failures
5. Microsoft should step in if the need arises that prevent the flow of Microsoft product
Questions?