Ireland’s Technology Sector

SUMMER / AUTUMN 2014 IRELAND AS A PREMIER LOCATION FOR TECHNOLOGY INVESTMENT

25 Years of Intel in Ireland

As Intel celebrates 25 years in Ireland, Renée James, Intel’s Global President (pictured above), in March spoke of the company’s recent $5 billion campus upgrade in Leixlip.

Intel, in Ireland since 1989, employs 4,500 people in advanced manufacturing, R&D and software development.

Google establishes 1st European Digital Innovation Centre in Dublin

Irish Prime Minister Enda Kenny (pictured above) at the opening in September 2013 of Google’s €5.5 million Digital Innovation Centre, which marked Google’s 10 year anniversary in Ireland.

Google employs at its EMEA HQ over 2,500 people in multilingual advertising sales, customer support, finance, engineering and data hosting. Dublin is Google’s largest office outside of the US and employs people from over 65 countries.

FOR FURTHER INFORMATION CONTACT: HEAD OFFICE - IDA Ireland Wilton Park House, Wilton Place, Dublin 2 Tel: +353 1 603 4000 Email: idaireland@ida.ie Website: www.idaireland.com Twitter: @IDAIRELAND www.youtube.com/investireland www.linkedin.com/company/ida-Ireland

‘Best Country for Business’ - this is how Forbes recently rated the Irish business environment, which is currently experiencing very high levels of investments from global technology corporations. Investments include:

Intel’s recent $5 billion spend at its Irish fab.

Microsoft’s €170 million data centre expansion,

bringing its total investment to €594 million.

Ericsson: 120 additional R&D positions.

SAP: 260 new roles (R&D/technology support).

PayPal: 400 new positions (including customer solutions/telesales). Over the coming months, many other investments will be announced, underlining the confidence that global corporations have in Ireland to successfully serve their business and market development needs. There are many reasons why companies choose Ireland including increasing talent availability, cost competitiveness, 12.5% corporation tax rate, technology infrastructure and the country’s track record of support for investors. We are very grateful to our clients for their continued investments and are always delighted to speak to companies, considering new functions in EMEA or growth in key corporate functions, about the “Ireland advantage”.

OUTLOOK POSITIVE FOR IRELAND’S TECH SKILLS SUPPLY

In November 2013, the Higher Education Authority (HEA) published its forecasts on tech graduate output to 2018 (Table 1). In summary, the outlook is very positive with the HEA projecting primary degree computing, software and electronic engineering graduate output increases of approximately 70%-110%.

Table 1: (Forecasted) Increase in Graduate Tech Output 2008-2018

(Source: HEA November 2013)

Actual output however, particularly in 2018, is expected to be appreciably higher due to the publication in February of the Government’s ‘National ICT Skills Strategy and Plan’, which introduces measures aimed at significantly

Ireland’s Foreign Direct Investment Agency

DEGREE

2008 VS. 2013 (% CHANGE)

2013 VS. 2018 (% CHANGE)

Primary Degree Honours Computing (Level 8)

+82 +69

Masters Computing (Level 9) +63 +50

Primary Degree Honours Electronic Engineering (Level 8)

+50 +106

Masters Degree Electronic Engineering (Level 9)

+64 +164

Leo Clancy, Executive VP,

ICT Division, IDA Ireland

Corporate Tax Ireland

12.5% corporate tax rate

Extensive double tax treaty network (70 countries)

An EU approved, stable tax system, which is open and transparent

An attractive holding company regime

25% R&D tax credit

Tax relief for key R&D employees

Tax relief for foreign staff assigned to work in Ireland (SARP)

Tax Commitment / Predictability:

“The tax rate is settled policy. We are 100% committed to the 12.5% corporation tax rate. This will not change.” (Minister for Finance, Michael Noonan, October 2013)

“The very predictability of Ireland’s regime adds to its appeal; companies have no reason to fear that taxes will suddenly shoot up.” (The Economist, February 2014)

exceeding the HEA forecasts. For example, the measures include a special provision to increase by about 45% the annual number of university/institute of technology places to be made available annually for mainstream undergraduate honours degree tech students (Level 8). This new provision will be underpinned by a national promotion campaign encouraging primary and secondary level students to choose computing, software and electronic engineering as a career choice. Upskilling courses will continue to be used to increase graduate output. The national skills plan is a partnership between the private and the public sectors and intends building on the 2012 National ICT Skills Plan and earlier activities, which have appreciably increased the supply of computing, software and electronic engineering graduate talent since 2008 (Table 1). The calibre of student has also been enhanced, underpinned by larger numbers taking higher level maths in their final leaving certificate exam; for example, between 2011 and 2013 there was a 59% increase in the numbers taking higher level maths and this is expected to increase further in 2014 (c.+15% on 2013). Highly Skilled & Experienced Overseas Talent

Higher graduate output going forward will be complemented with an enhanced focus on attracting from abroad greater numbers of highly skilled and experienced computing, software and electronic engineering personnel. A more streamlined and efficient approach to processing employment permits is also being introduced, involving an eForm and fast-track mechanism for pre-registered employers. The new measures will complement the provision in 2013 to increase by 50% the annual number of technology employment permits to be made available to companies. Ireland - Leading the Way in Skills Availability

In May 2014, a global survey was completed by recruitment agent Manpower on talent shortages. In the survey, Ireland was recognised as the global leader in the availability of skills and the least difficult location to fill talent (Figure 1). Figure 1: Difficulty Filling Jobs by Country (%)

c.50% of 25-34 year-olds hold a 3rd level qualification in Ireland compared to OECD avg of 38%

(OECD 2013)

Ireland: #1 globally for skilled labour

(IMD World Competitiveness Yearbook 2014)

Ireland: #1 globally for worker flexibility/adaptability

(IMD World Competitiveness Yearbook 2014)

25 Years of EMC in Ireland

In 2013, EMC announced the creation of 200 additional jobs and the opening of a new office in Cork, as part of a €100 million investment. The announcement was made during an event celebrating the company’s 25 years in Ireland at EMC’s operation in Cork. The company employs approximately 3,000 people in Ireland, with the new positions focused on engineering, R&D, customer support, sales and finance. “EMC’s investment in Ireland is key to our global growth strategy…our investment in Ireland demonstrates our long-term commitment to the country.” (David Goulden, President & COO, EMC Corporation)

US FDI in Ireland at Record High

Ireland now #1 export platform in the world for US affiliates.

Over the five years to 2012, US firms invested in Ireland c.14 times what they invested in China.

US investment into Ireland between 2008-2012 was more than the previous 58 years combined.

Source: American Chamber of Commerce, October 2013

WHO IS INVESTING...

Over the past two years many international companies have made strategic investments in Ireland. Table 2 lists some of the investors.

Table 2: Key Tech Investors in 2013 and 2014

First Time Expansions R&D/Software Development

FireEye Guidewire Software Huawei

Qualcomm Salesforce.com McAfee

Clio Citrix Systems ACI Worldwide

eMaint Dell Bank Fujitsu

Nordeus Facebook Gilt Groupe

Loop1 Systems Intel Liberty Global (UPC)

Aditi Technologies Google ON Semiconductor

StorageCraft Tyco Zendesk

Worldwide Tech Services eBay / PayPal VCE

Squarespace Ericsson Workday

New Relic Symantec AOL

Marin Software Twitter EMC

PE Lynch Yahoo NTT Data

Primeur SAP HP

SmartBear IBM u-blox

EtQ Microsoft Aon

Some details:

Tyco – 500 person Business Services Centre in Cork.

Qualcomm - Global Technology Delivery Centre in Cork.

Workday – 200 person expansion (R&D, sales, customer support).

Huawei – New R&D centre in two locations, Dublin and Cork.

Aditi Technologies – European Services & Business Development Centre.

WHAT INVESTORS SAY…

Ireland: #1 in Europe for investor protection

(World Bank, Doing Business Report 2014)

“Ireland’s successful track record with world-leading technology companies, availability of highly skilled, technical talent along with a pro-business environment, all played a significant part in Qualcomm’s decision to locate in Cork.” (Peggy Johnson, EVP, Qualcomm

Technologies & President of Global Market Development, September 2013)

“Our Irish technology team has been instrumental in further developing Gilt’s core ecommerce platform, bringing a combination of engineering discipline, innovation and a passion for quality that is rare.”(Michele Peluso, CEO, Gilt Groupe, October 2013)

“With 140 similar [Business Services] centres already located here that support companies based around the world, we were attracted to Ireland’s expertise and culture of innovation, as well as the availability of a strong technical workforce.” (Phil McVey, VP, Tyco

Business Systems, January 2014)

Limerick - Significant grant support is available

Limerick has competitive salaries, local talent, a supportive university and institute of technology, and international access via Shannon Airport. International companies with significant operations in the Limerick area include Dell, Intel, Analog Devices, Symantec, EMC, QAD, Liberty Global (UPC), ACI Worldwide, EtQ and KEMP Technologies. Link to Connect and Invest Limerick: www.idaireland.com/connect-and-invest/limerick/

Liberty Global (UPC) opens new IT Competency Centre in Limerick

Pictured at the announcement in 2013 are (L-R) Henry Minogue, VP & CIO, UPC Ireland; Minister for Finance, Michael Noonan; and Donal Flavin, IDA Ireland.

KEMP Technologies Expands

“Choosing Limerick as KEMP’s gateway to international market expansion has turned out to be a tremendous success for the company.” (Ray Downes, CEO, KEMP Technologies, April 2014)

WHO IS IN IRELAND…

Ireland is the international location of choice for the strategic business activities of:

9 of the top 10 global software companies (e.g. Microsoft, IBM)

9 of the top 10 US tech companies (e.g. Intel, Dell)

3 of the top 3 global security software companies (e.g. Symantec, McAfee)

3 of the top 3 global enterprise software companies (e.g. SAP, Oracle)

4 of the top 5 IT services companies (e.g. HP, Fujitsu, Accenture)

Top 10 ‘born on the internet’ companies (e.g. Google, Facebook)

Table 3 provides a sample of international companies with a significant presence in the country.

Table 3: Tech Multinationals in Ireland

Indigenous Tech Sector

As well as a strong international corporate presence in the country, there is a growing indigenous technology sector with some highly innovative startups continually being established. Some examples of both established indigenous and startup companies include:

Global Leaders

Internet Software Telecoms Semiconductors Young, High Growth

HP Google Symantec Ericsson Analog Devices Riot Games

IBM eBay/PayPal VMware Cisco Systems

Texas Instruments

Engine Yard

Microsoft Yahoo! Adobe Systems

Alcatel Lucent

Infineon Technologies

Marketo

Intel Facebook Citrix Systems

Avaya Cypress Semiconductor

FireEye

SAP AOL Red Hat Huawei Xilinx HubSpot

Dell LinkedIn Novell Telefónica Synopsys Zendesk

Apple Amazon.com Sage Schneider Electric

Cadence

Qualtrics

Oracle Dropbox Salesforce. com

Intec Maxim Integrated

Gilt Groupe

EMC Twitter McAfee QLogic Qualcomm Squarespace

Openet provides transaction management software to network operators, enabling them to control, monetize, gain insights and engage with network users.

AdaptiveMobile provides network operators with real time network-based security solutions, enabling them to protect customers.

pTools is an Enterprise Web Content Management (WCM) vendor, with a focus on finance, government, security and utility sectors.

Fenergo is a provider of end-to-end customer lifecycle management solutions for financial institutions.

iQuate provides users with visibility of their ‘IT estate’. Customers use iQuate software to streamline IT compliance and to manage audits.

Ireland: #1 globally for investment incentives

(IMD World Competitiveness Yearbook 2014)

Galway - No.1 Micro European City*

Knowledge and skills intensive companies are drawn to Galway due to the talent pool and business, science, engineering, multilingual and managerial expertise.

International companies with sizeable operations in Galway include HP, Avaya, Cisco, SAP, IBM, Schneider Electric and EA Games. *fDi Intelligence’s study of the most promising investment locations in Europe (February 2014)

HP Commences Construction on State-of-the-Art Facility in Galway

In February, HP announced the formal commencement of the construction phase of its new 89,000 sq ft office building in Galway. The new building will be dedicated to software research and development, cloud technology and business services with capacity for c.700 employees. “Galway continues to be a great source of IT talent that can drive future innovation for HP.” (John Hinshaw, Exec. V.P., Global Technology & Operations, HP speaking at the groundbreaking ceremony)

INDEPENDENT COMMENTARY & #1 GLOBAL RATINGS

Ireland is #1 on Forbes’ list of the best places globally to do business.

According to a recent Forbes analysis*, Ireland has an extremely pro-business environment which has attracted investments from some of the world’s biggest companies over the past decade.

In the analysis, Ireland was the only country to rank in the top 15% across all eleven metrics Forbes examined. Ireland ranked particularly high for low tax burden, investor protection and personal freedom.

In an associated comment, Moody’s highlighted the well educated workforce and 12.5% corporate tax rate (one of the lowest in Europe) as big draws for international companies, as well as the language factor for companies from anglophone countries.

*Forbes ‘Best Countries for Business’ Report (December 2013) graded 145 nations on 11 different factors: e.g. property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance. #1 Global Ratings for Ireland

1st in the World for best place to do business¹

1st in the World for availability of skilled labour2

1st in the World for attitudes towards globalisation²

1st in the World for flexibility & adaptability of workforce2

1st in the World for investment incentives2

1st in the World for inward investment by quality and value³

1st in the World for human capital - Dublin City4

1st in Europe for investor protection5

1st in Europe for paying taxes5

1st in Europe for attaining third level education6

1st in Europe for the number of investment jobs per capita³

1st in Western Europe for ‘Best to Invest’ 7

1st as Europe’s most entrepreneurial country (Wall Street Journal 2013)

1.Forbes 2013 2.IMD World Competitiveness Yearbook 2014 3. IBM Global Location Trends Report 2013 4.EIU, Benchmarking Global City Report 2012 5.World Bank, Doing Business Report 2014 6.Eurostat EU Labour Force Survey 2013 7.Global Best to Invest Report, Site Selection Magazine, May 2013

Ireland is the fastest growing country in Europe for data centre operators (Colliers International Report 2014)

Ireland has 50% of its population under the age of 35

(Eurostat May 2013)

Trustev, a security technology company, provides real-time anti fraud and payment protection solutions for eCommerce.

CloudDock provides a file synchronisation platform that makes it easier for users of services like Dropbox, Box, Google Drive and Microsoft OneDrive to manage their cloud services in one place.

Oneview specialises in the development of innovative solutions and patient engagement services for the healthcare sector.

Intel’s Irish-Designed Chip

Intel’s new Galileo development board, containing the new Quark SoC X1000 chip, was unveiled in October 2013. Both were developed at Intel’s Leixlip plant in Ireland.

VCE to add 150 R&D positions at its International HQ in Cork

Pictured at the announcement in March are (L-R) Minister for Jobs, Enterprise and Innovation, Richard Bruton and Bob Taccini, CFO, VCE. VCE, a cloud computing & software infrastructure company, announced plans to create up to 150 new R&D positions at its international headquarters in Cork. The R&D team will develop new features for Vblock Systems that support emerging technologies in both cloud and virtual environments. The new R&D roles will significantly expand VCE’s existing operations in Ireland, which include professional and customer services, manufacturing, sales operations and general support functions. “Four years ago, VCE established its International HQ in Cork because of its highly educated workforce, the incredible passion this workforce has for technology, and ease of doing business.” (Bob Taccini, CFO, VCE, March 2014)

CORPORATE RESEARCH AND PRODUCT DEVELOPMENT

Ireland is an attractive location for corporate R&D, with a growing number of companies undertaking new research and product development activities. For example in 2012, IDA supported companies increased their overall expenditure on R&D by 18%.

An increasing technical talent pool, the country’s 25% R&D tax credit and generous grant support from IDA Ireland are contributing factors to ongoing growth. Table 4 has examples of companies

with strategic R&D centres and research programmes.

Table 4: R&D Activities in Ireland

Some recent notable product developments in Ireland include:

Microsoft: Key functions of Microsoft’s Windows 8 operating system, including the on-screen keyboard.

Intel: Intel’s Galileo development board, containing the Quark SoC X1000 chip, which will enable a host of low power devices in wearable technology and the Internet of Things.

Aon: The world’s largest proprietary insurance placement database system, known as the Global Risk Insight Platform (GRIP).

Movidius (an Irish company): A revolutionary chip (ultra-low power, high-performance and programmable architecture) that is core to Google’s ‘Project Tango’ smartphone, a 3D sensing device that maps and learns the world around it.

S3 (Irish company): ‘World’s smallest’ analogue-to-digital converter (ADC) chip for use in Wi-Fi and LTE-connected devices.

DecaWave (Irish company): First integrated circuit to electronically identify a specific distance to any object, person or thing with +/- 10 cm precision.

Company R&D / Centre Activities include

IBM Smarter cities technology (e.g. transportation, water, urban information management), risk analytics, exascale computing and software development

Intel Chip design, software development, Internet of Things, data analytics and high performance computing

Analog Devices

IC design. Analogue technologies (data converters, mixed-signal & RF integrated circuits)

Cisco

Unified communications; enterprise/cloud enabled desktop, mobile applications, real time web communications and desktop virtualization solutions

Dell Cloud computing and customer technology solutions

Aon Centre for Innovation & Analytics

McAfee

Centre of Excellence for Enterprise Security Solutions, including cloud, anti-virus and encryption technologies

Fujitsu

Collaborative R&D in Big Data, cloud computing, sensor technologies and future internet

MasterCard Centre of Excellence for Java Development

TSSG – Telecommunications Software & Systems Group TSSG, established in Waterford in 1996, is a telecoms software R&D centre with particular expertise in all aspects of mobile. TSSG focuses on telecoms networks, including next generation internet networks, converged services, security and mobile services. Industry partners include Ericsson, Vodafone, and Alcatel-Lucent.

Key Features of Ireland’s R&D Environment

Strong government commitment to RD&I through funding for industry research and collaborative industry, academic programmes

25% tax credit on the cost of eligible RD&I activity

Transparent legislation around patents and IP

Excellent legal expertise for the commercialisation and protection of IP rights

Internationally recognised research community with strong links between industry, Higher Education Institutions (HEI’s), international universities and research institutions

SUPPORTIVE RESEARCH AND DEVELOPMENT INFRASTRUCTURE Ireland has a broad range of leading edge, publicly funded tech research centres, which are available to support companies with their corporate research programmes. The centres are also a source of high quality talent, familiar with contemporary and next generation technologies and techniques. Table 5 summarises some of the main research centres:

Table 5: Research Centres in Ireland

Research Institute Research Areas Website Tyndall National Institute

Micro/nanoelectronics, microsystems and photonics

www.tyndall.ie

MCCI (Microelectronics

Circuits Centre Ireland)

Microelectronics: analogue,

mixed-signal and RF design

www.mcci.ie

CRANN (Centre for

Research on Adaptive Nanostructures and Nanodevices)

Nanotechnology www.crann.ie

AMBER (Advanced

Materials & BioEngineering Research)

Advanced materials and bioengineering

www.amber centre.ie

Insight (Centre for Data

Analytics)

Big Data/data analytics, sensors and semantic web

www.insight-centre.org

CeADAR (Centre for

Applied Data Analytics Research)

Big Data/data analytics www.ucd.ie/ ceadar/

IC4 (Irish Centre for

Cloud Computing & Commerce)

Cloud technologies, including migration, interoperability and mobile encryption

www.IC4.ie

ICHEC (Irish Centre for

High-End Computing)

High performance computing support for collaborative R&D

www.ichec.ie

LERO (Irish Software

Engineering Research Centre)

Software engineering, including security/privacy, standards and autonomic computing

www.lero.ie

CTVR (Centre for

Telecommunications Value-Chain Research)

Wireless and optical networking technologies

www.ctvr.ie

TSSG

(Telecommunications Software & Systems Group)

Telecommunications networks, including converged/mobile services, security, data mining and social computing

www.tssg.org

CNGL (Centre for Next

Generation Localisation)

Translation/localisation, search/discovery, analytics and personalisation

www.cngl.ie

Learnovate

Learning technologies: social search, content analysis, gamification/personalisation

www.learnovate centre.org

ICMR (Irish Centre for

Manufacturing Research)

Manufacturing informatics, including data analytics

www.icmr.ie

MSSI (Materials &

Surface Science Institute)

Composite materials www.ul.ie/mssi/

Ireland “top performer” in delivering innovation

(European Commission: ‘Indicator of Innovation

Output’, 2013)

Ireland is Europe’s most entrepreneurial country

(Wall Street Journal 2013)

Dublin’s Booming Tech Market

Dublin’s overall tech office space has risen sharply in recent years. Facebook confirmed in late 2013 it is to double the company’s office space in Ireland. Facebook’s Dublin office will be the company’s largest operation outside of the Group HQ. Amazon.com announced in early 2014 its plans to move the company’s Dublin Development Centre to a 69,000 sq ft office. The new office will be home to 450 employees from the summer and will provide capacity for future growth.

How IDA Ireland Can Help Investors rt

Startup assistance & advice

Provision of grants for investments (employment, R&D, training)

Itinerary planning and execution

Provision of information on tax, skills, education & research programmes, labour law, investment opportunities, operating costs, infrastructure, support services, etc

Introductions to local industry, government, service providers, and research & educational institutions

Single point of contact

FOR FURTHER INFORMATION CONTACT:

HEAD OFFICE - IDA Ireland Wilton Park House, Wilton Place, Dublin 2 Tel: +353 1 603 4000 Email: idaireland@ida.ie Website: www.idaireland.com Twitter: @IDAIRELAND www.youtube.com/investireland www.linkedin.com/company/ida-Ireland

Notable Research Achievements

Some recent ‘world first’ research achievements at Ireland’s research centres include:

WHY IRELAND…

Significant base of international tech companies

Growing population…young, well educated and flexible; rapidly increasing engineering graduate output

Attractive tax system with a 12.5% corporate tax rate and 25% R&D tax credit

Competitive costs, with ongoing improvements

An advanced telecommunications infrastructure

Flexible / Pro- business Environment

Only English

Attractive tax system with a 12.5% corporate tax rate and 25% R&D tax credit

Only English speaking member of the Eurozone

Generous corporate incentives

Dublin set to overtake London as Europe’s IT real-estate

capital

Dublin set to overtake London as Europe’s IT real-estate capital

(Colliers International Report 2014)

World’s first junctionless transistor, which over time will help

miniaturise electronic devices (Tyndall).

World’s lowest noise frequency generators for mobile phones

(Tyndall).

World’s first atom-by-atom simulation of nanoscale film, using an Atomic Layer Disposition (ALD) technique, which has potential to

revolutionise silicon chip production (Tyndall).

New technology that doubles the battery performance of mobile

phones, laptops and electric cars (MSSI).

Global first, research method for producing industrial quantities of high quality graphene. Potential applications here include foldable

touch screens for mobile phones and laptops (AMBER).

Competitive costs, with ongoing improvements

Access to an EU market of 500 million people

Supportive R&D

Infrastructure

An advanced telecommunications infrastructure

Flexible / pro-business environment

Talented, technical &

multilingual people

New technology enabling Linked Open Data (LOD), currently on different sites and formats, to be stored and sorted up to 10 times

faster than previously, leading to new information (Insight/Fujitsu collaborative research).