This paper studies the impact of Information and Communication Technology (ICT) on productivity. Firm microdata are obtained by adding the information from the Company Accounts Data Service to that from the Bank of Italy's survey referring to 1997 ("Indagine sugli investimenti delle imprese dell'industria in senso stretto"). The ICT capital stock is measured by its replacement value and not by its book value; software and databases are excluded from the capital stock. We estimate a Cobb-Douglas production function with a set of input variables including labour, ICT and non-ICT capital, human capital, production characteristics and capacity utilization rates. ICT capital enhances the firm's productivity, with an elasticity close to 3 per cent. By comparing the marginal product of ICT capital with its user cost, we detect the existence of excess returns, pointing out not only a delay in the adoption of these technologies, but also opportunities for further progress in productivity.