Ireland still integral to Microsoft, says Ballmer

10 Oct 2005

The chief executive of software giant Microsoft, Steve Ballmer, said the company’s Irish operations, unlike other locations outside the US, “is almost a full-service Microsoft” because of the large number of business divisions it has here as well as core Windows research and development.

Ballmer, the 11th richest man in the world with an estimated €14bn fortune, was on a whirlwind tour of the company’s Irish operations last week and was speaking to journalists Friday afternoon after giving a lecture in Trinity College Dublin.

He said Microsoft Ireland today employs 1,200 people on a full-time basis, as well as a further full-time 600 IT contractors across three major business divisions.

He said: “We have a different relationship with Ireland than we do in most countries that we do business. Most countries that we do business in have sales and marketing and technical support and a few countries that we do a little bit more. We have almost the full-service Microsoft in Ireland. We do product development, we do localisation, operations and of course also sales and marketing support. We’ve got about 1,200 full-time people and 600 contractors within our premises full-time (they’re on someone else’s payroll but it comes back to us eventually) and frankly we couldn’t be more delighted with the output of our operation here in Ireland, the quality and talent of people and the support and co-operation of Irish Government.”

Addressing concerns about the rising costs of doing business in Ireland and the return on investment for Microsoft as it translates into productivity, Ballmer continued: “We know there are a lot of issues people are worried about in terms of the Irish economy – we are worried about the rising cost of labour and what does that mean. We got to drive productivity and those are great things for society to be worried about. But, if you come from outside Ireland, I can tell you things look good in Ireland.

“It has a good talent pool and a growing economy. The type of issues people are worried about are the right kind of issues, it means things by and large are in a healthy shape. We commissioned a study on productivity that had interesting ramification in terms of IT and the impact it has on Ireland’s economy. We play a unique role in IT industry on some of the challenges and have desires to improve productivity in Ireland.”

Commenting on the decision by Microsoft in the past year to boost its investment in R&D with the creation of 30 high-calibre jobs, Ballmer warned that globally good R&D talent is proving to be scarce and acknowledged that India and China because of the large output of computer graduates are winning IT investment but said Ireland is still holding its own.

“We’re doing core global Windows development here in Ireland. We’ve hired 30 people; half came from outside Ireland and the other half originally from Ireland. We need to get the best talent in the world. We have very multicultural focus in all operations in US, India and China. Can we do more here? Yes! The first thing we got to do invest and do it well, and that will be the base for hundreds of development applications – including internet protocol TV, even the next Solitaire, and the next Minesweeper.”

Microsoft Ireland general manager Joe Macri added that the group in Ireland is also doing important work in the field of smart card technology.

Ballmer continued: “One of the issues [with R&D] is capacity and how big we can get. Talent is scarce and that’s why we’ve expanded our efforts recruiting and bringing people from one country or another. The truth is India and China are cost effective and the No 1 and 2 pool of computer graduates in the world is China and India, No 3 is the US.”

But in tapping into R&D talent, Ballmer said Ireland’s existence as an EU country enables the company to source talent from Europe and Asia. “On the R&D side cost is a factor and there’s a talent pool not only in Ireland but throughout Europe that we can tap into with our R&D centre here. For example, we have people who cannot start working with Microsoft in Seattle because they cannot get Visas to come to the US.”

Ballmer said the 12.5pc corporate tax rate remains a factor in the company’s presence in Ireland but advised it wasn’t the only factor. “Corporate tax is part of the overall advantage of doing business in Ireland. It would be disingenuous to say otherwise. Government tax policy in Ireland is partly a reason of incentive. But there’s also a great infrastructure, it’s an English-speaking population, it’s a great bridge for technology companies and educational institutions here are wonderful. There’s a mix of important factors in terms of what the Irish proposition is. But yes, corporation tax is a factor.”

By John Kennedy