Indian IT Overview

Introduction

In an increasingly globalised world, significant complexity and

uncertainty is getting attached to the unprecedented economic

crisis. The Indian economy has also been impacted by the

recessionary trends, with a slowdown in GDP growth to seven

percent.

The focus and exponential growth in the domestic market has

partially offset this fall and insulated the country, resulting in net

overall momentum. The IT-BPO industry in India has today become

a growth engine for the economy, contributing substantially to

increases in the GDP, urban employment and exports, to achieve

the vision of a “young and resilient” India. During the year, the

sector maintained its double digit growth rate and was a net hirer.

This growth has been fueled by increasing diversification in the

geographic base and industry verticals, and adaptation in the

service offerings portfolio.

While the effects of the economic crisis are expected to linger in

the near term future, the Indian IT-BPO industry has displayed

resilience and tenacity in countering the unpredictable conditions

and reiterating the viability of India’s fundamental value

proposition.

Consequently, India has retained its leadership position in the

global sourcing market. The Indian IT-BPO industry is estimated to

achieve revenues of USD 71.7 billion in FY2009, with the IT software

and services industry accounting for USD 60 billion of revenues.

During this period, direct employment is expected to reach nearly

2.23 million, an addition of 226,000 employees, while indirect job

creation is estimated to touch 8 million. As a proportion of national

GDP, the sector revenues have grown from 1.2 per cent in FY1998

to an estimated 5.8 per cent in FY2009. Software and services

exports (including BPO) are expected to account for over 99 per

cent of total exports, employing over 1.76 million employees.

While the current mood is that of “cautious optimism,” the industry

is expected to witness sustainable growth over a two-year horizon,

going past its USD 60 billion export target in FY2011. While the

industry has significant headroom for growth, competition is

increasing, with a number of countries creating enabling business

environments aimed at replicating India’s success in the IT-BPO

industry.

Hence, concentrated efforts are required by all stakeholders to

address the current challenges, to ensure that India realizes its

potential, and maintains its leadership position.

 EVOLUTION OF IT

• 1968: The Tata industrial conglomerate forms software

services unit Tata Consultancy Services.

• Mid-1970s: IBM exits India. Import duties of 150 percent

or more mean that VCRs cost $3,000 and TVs cost

$6,000. Wipro starts to create India's first homegrown

PC.

• 1994: Telecom liberalized.

• 1995: TCS determines that its Case Pac tool developed

for IBM can be used to scan software for Y2K problems.

An industry is born.

• 1999: Y2K contracts pile into India.

• 2002: Indian companies expand hiring. Massive layoffs in US

• 2003: Led by service conglomerates such as Wipro and Infosys,

India becomes a primary destination for offshore outsourcing

as foreign companies seek to lower cost

 Govt. of India & IT Sector – Policies & Privileges

• IT PRIMARY FACTORS

• Cost

• Labor cost

• Infrastructure costs

• Exchange rates

• Labor competitiveness

• Size

• Level of education

• Compatibility

• OTHER FACTORS

• Business and political risks

• Geographical location

• Regulatory considerations
 • MAJOR PLAYERS

TOP COMPANIES

India's Top Software companies

1 TCS

2 Infosys

3 Satyam

4 Wipro

5 IBM

India's Top BPO firms

1 Genpact

2 WNS

3 Wipro BPO
4 HCL BPO Services

5 ICICI One Source

6 IBM Daksh

7 Progeon

8 Aegis BPO Services

9 EXL Service Holdings

10 24/7 Customer
 CONTRIBUTION TO GDP

• IT-ITES sector's contribution to the country's GDP has

increased more than four times to 5.2 per cent in 2006-07 as

compared to 1.2 per cent in FY'98,

•
 POLICIES

Setting up IT software and services operations in India are governed

by certain rules and regulations. A brief list of guidelines for

individuals/ companies interested in setting up such operations is

given below:

As an Indian Company
A foreign company can commence operations in India through

incorporation of a company under the provisions of Co Act. Foreign

equity in such Indian companies can be up to 100 percent depending

upon the business plan of the foreign investor, prevailing foreign

investment policies of the Government and receipt of requisite

approvals. An Indian citizen can set up IT software and services

operations in India in the following manner:

as an Individual/ Proprietor; or

as a Partnership Firm/ Trust; or

as a Company registered under the Companies Act, 1956 ("Co Act").

No prior permission of Government of India is required to set up IT/

software units in India.

Setting up of operations in India by Overseas Company/ Non-

Resident

A foreign company or a non-resident planning to set up business

operations in India can do so in the following manner:

As a foreign company through a Liaison Office/ Representative

Office, Project Office or a Branch Office; or

As an Indian company through a Joint Venture or a Wholly Owned

Subsidiary.

A foreign company is one that has been incorporated outside India

and conducts business in India. These companies are required to

comply with the provisions of Co Act.

Joint Venture with an Indian Partner

Foreign companies can set up their operations in India by forming

strategic alliances with Indian partners. Foreign investments are

approved through two routes as under: Automatic Route: Approvals

for foreign equity up to 26 percent, 50 percent, 51 percent, 74

percent and 100 percent are given on an automatic basis subject to

fulfillment of prescribed parameters in certain industries as

specified by the Government.

RBI accords automatic approval to all such cases.

Government Approval: Approval in all other cases where the

proposed foreign equity exceeds 26 percent, 50 percent, 51 percent

or 74 percent in the specified industries or if the industry is not in

the specified list, it requires prior specific approval from Foreign

Investment Promotion Board ("FIPB").

PRIVILEGES

To encourage units in this sector, Government of India has

announced many schemes:

Export Promotion Capital Goods ("EPCG") Scheme:

This scheme allows import of capital goods at a concessional

customs duty rate of 5 percent, where the importer as a condition

is required to achieve a specified export obligation. The export

obligation and the period within which the same is required to be

achieved vary based on the nature of the unit and value of imported

capital goods.

Special Economic Zones ("SEZs"):

SEZs are designated areas dedicated towards growth of exports,

having full flexibility of operations that are permitted to import

duty free capital goods and raw material. The movement of goods

to and fro between ports and SEZ are unrestricted.

The units in SEZ have to export the entire production subject to

permitted sales in the DTA.

Currently, the operational SEZs in India which include the Santacruz

Electronic Export Promotion Zone, Kandla Export Promotion Zone,

Vizag Export Promotion Zone and Cochin Export Promotion Zones

which have been converted to SEZs. Fiscal incentives available to

SEZ units have been discussed ahead in detail.

The SEZ policy is welcome, very welcome. They need islands of non-

interference. The devil is in the details as usual. The centre has

formally approved 212 SEZ units with an in principle approval to 152

more. I don’t buy the usual rhetoric that poor farmers will be

affected and the like. First of all, large landowners are not

necessarily poor. Every day, dozens of large landowners are turning

into instant millionaires by turning in their lands to real estate / IT

giants.

The government must assure prevailing rates to them and/or issue

bonds tied to the future development of the area. It must also take

into account small and marginal landowners interests and device a

new scheme for them which tie them monetarily into future
development in that area. The issue must stop there. The SEZs

provide a 15 year tax holiday to the IT companies after 2009. The

details are 100% exempti0n for the first 5, 50% for the next 5, and

variable for another 5 based on reinvestment in SEZs.

100 Percent Export Oriented Unit ("EOU"):

In terms of the benefits available, the EOU scheme, on a general

basis, is similar to SEZ scheme. But in this scheme, there is no need

to be physically located in the designated area (as in the case of

SEZs). This scheme offers zero import duty on import of all capital

goods, special 10 years income tax rebate (however, such rebate

will not be available for Assessment Year 2010-2011 and onwards).

The incentives provided to EOUs are generally similar to those

provided to SEZ units, except the exemption from central sales tax

on purchases.

Software Technology Park ("STP"):

This is a special scheme under the Ministry of Information

Technology, similar to EOU scheme, which is specific for the

software industry. STPs are located at Noida, Navi Mumbai, Pune,

Gandhinagar, Hyderabad, Bangalore, Chennai, Bhubaneshwar,

Manipur, Mohali and Thiruvanathapuram.

This scheme offers zero import duty on import of all capital goods,

special 10 years income tax rebate (however, such rebate will not

beer are 11 available for Assessment Year 2010-2011 and onwards),

availability of infrastructure facilities like high-speed data

communication links, etc. The incentives provided to EOUs are

generally similar to those provided to SEZ units, except the

exemption from central sales tax on purchases.

MARKET STRUCTURE

GLOBAL & INDIAN SCENARIO

Global Sourcing Trends

The fundamental contribution of information technology is the

expansion of knowledge, which is necessarily accompanied by a

reduction in uncertainty. This becomes relevant for market

structure in several ways.

IDC estimates that in 2008, the worldwide IT market growth will be

lower at about 5.5-6.0 per cent, mainly due to the economic

slowdown in the US and elsewhere.

IT-BPO services grew at an above-sector-average rate of nearly 8

per cent and remained the largest category, accounting for an

increasing share of the worldwide technology sector revenue

aggregate.

Outsourcing continued to be the primary growth driver, sustained

by gradual shifts in regional spending patterns – with increasing

traction in Europe and Asia Pacific offsetting a marginal decline in

share of the Americas. IT spending in the BRIC countries - Brazil,

Russia, India, and China – is expected to grow by 16 per cent in

2008, reaching USD 115 billion. Other emerging economies (based

on 10%+ growth rates and the greatest net-new IT spending

potential in the next four years) include Mexico, Poland and Turkey,

followed by Vietnam, Thailand, Saudi Arabia, Argentina, Colombia,

and United Arab Emirates.

Green IT is expected to be an important highlight during 2008.

According to the Green IT Survey conducted by IDC, over 50 per

cent consider suppliers’ greenness when buying IT, almost 80 per

cent think the importance of greenness as an IT buying

consideration is growing, and over one-third have policies that favor

green vendors. 2008 will see the introduction of green products

(energy-efficient, space-efficient, materials efficient, regulatory-

compliant) that will create meaningful differentiation and move

market share.

STPI

(Software Technology Park India) is a scheme that dates back to the

early years of the IT industry. It allowed for a 10-year exemption

from Corporate Income Tax (upto 90% of turnover), Sales Tax,

Customs Duty, Excise duty. Back in the day, the infant IT companies

could not deal with the astronomical cost of telecommunications,

archaic customs duty rules, and a high rate of taxation. So the

initial 10-year tax holiday helped an infant industry attain critical

mass.

Even though companies like Infosys are 20 years old, they are still

able to avail of the 10-year tax holiday by setting up new units with

fresh 10-year extensions. For companies outside the STPI, the

corporate income tax rate alone is 36-37% (Corporate Income Tax =

35%, Surcharge = 2.5%, Education Tax = 2%). Sales tax exemption is

10-12% for states and 3-4% for Union Territories (UT). This is why

you don’t find all IT companies in UTs. The contribution of the STPI

tax holiday to the overall success of the IT story cannot be

underestimated. It is rated it as one of the best initiatives

undertaken by the Indian government. The party it set to end in

2009. If all IT companies come out of the scheme – the Indian

government will realize between $3-5 billion dollars (15-25000 cr) in

direct taxes alone (this figure is based on projected size of the IT

industry at a 36% tax rate on a $50bn size).

The Global IT spending is expected to decline steeply below the

expected levels of $869 billion by 2010.

IT industry provides direct employment to more than 20 lakh

people; indirect employment number goes far beyond..!!

IT industry contributes to around 5.2% to Indian USD 1 trillion GDP.

 SOUCRES OF REVENUE

IT industry is largely dependent on Banking and financial industry.

With the decline in these sectors, the revenue from these is

expected to decline, hurting the bottom line of IT majors. This calls

for exploring new verticals.

Revenue By Geography

The Americas and Europe continue to be the key markets for the

Indian IT-ITeS sector.

Budget 2009 & its Impact on the IT industry

The Union budget presented gives a long term direction to inclusive

growth, Infrastructure development, Education and employment

generation of 12 Million jobs a year.

In terms of the Impact on the IT industry, steps like the scrapping of

the FBT, extension of the 10A benefits till 2011, increase in the MAT

credit period to 10 years and increased allocation to education are

welcome steps.

On the personal taxation, while the increases in tax limits are

nominal, the Removal of surcharge on income tax will benefit

number of employees in our industry. The Industry also welcomes

the planned outlay of Rs. 2100 crores to create ‘Educational

infrastructure’ including setting up IIT’s and interest waivers for

educating students. These reforms will clearly bring in a manifold

resource increase for employability in the technical stream.

PEST ANALYSIS

Political:

Political stability: Indian political structure is considered Stable

enough expect the fact that there is a fear of hung Parliament (no

clear majority). - Positive

U.S. government has declared that U.S companies that Political

outsource IT work to other locations other than U.S. will not get tax

benefit. - Negative

Government owned companies and PSUs have decided t o Give more

IT projects to Indian IT companies. - Positive

Terrorist attack or war. – Negative

Economical:
 • Global IT spending (demand). (Other Factors

Business and political risks

Geographical location

Regulatory considerations(–ve)

Domestic IT Spending (Demand): Domestic Market grow by 20% &

reach approx USD 20 billion in 2008-09 Nasscom (+VE).

Currency Fluctuation (-ve)

Real Estate Prices: Decline in real estate prices has resulted

reducing the rental expenditure (+ve).

Attrition: Due to recession, the layoffs and job-cuts have resulted in

low attrition rate (+ve).

• Economic attractiveness: Due to cost advantage and other

factors (+ve Other Factors

Business and political risks

Geographical location(Regulatory considerations)

Social
Language Spoken: English is widely spoken language in India. English

medium is the most accepted medium of education.(+ve)

Education: Large number of technical institutes and universities

over the countries provide IT education. (+ve)

Working age population. (+ve)

Technological:

Telephony (+ve)

India has the world lowest call rates

Expected to have total subscribers base of about 500 million by

2010.

India has the second largest telephone network after china.

Enterprise telephone services, 3G, Wi-max, VPN, poised to grow.

Internet Backbone: Due to IT revolution in 90’s india is well

connected with undersea optical cables. (+ve) New IT Technologies:

Technologies like SOA, web 2.0, High definition content, grid

computing, and innovation in low cost technologies is presenting

new challenges & opportunities for Indian IT industry.(+ve)

 STP Of IT Industry

Segmentation

Market segmentation is a process that segments a market into

smaller sub-markets, called segments. Segments are to be

homogeneous or have similar attributes. Purchasing patterns and

trends can appear prominently in certain segments. Good market

segmentation is to create segments where prominent patterns can

emerge. Market segmentation may be used to analyze the

followings;

Market responsiveness analysis: This is very useful in direct

marketing since market responsiveness of product offerings can be

readily available.

Market Trend Analysis: Analyzing segment-by-segment changes of

sales revenues can reveal market trends. Trending information is

vital in preparing for ever-changing markets. Segmentation offers

deals with a specific function within the enterprise such as data

processing, accounting, human resources, plant maintenance,

engineering design, manufacturing, inventory control, etc. This is

the most likely domain for a product or service, but you must
recognize that the other domains may also get involved if the

purchase of the product or service becomes a high profile decision.

This purchase decision will be made by the prospect's functional

management.

Targeting

The dynamics of IT industry is changing and IT firms are now

preparing themselves to meet new challenges. Traditionally, Indian

IT firms have been deriving sales from the Americas and Europe but

going forward, the CAGRs of these regions will be low where as the

Asian market is expected to grow at a very fast pace and approach

the market size of the European markets by 2011. The emerging

Latin American and Middle-East/African markets, though smaller in

size, are also expected to have a higher CAGR. The growth in the

Asia-Pacific Region is expected to be higher mainly on account of

growth in spends in China and India.

 8P’s of IT Industry

1.Product:

The product aspects of marketing deal with the specifications of the

services, and how it relates to the end-user's needs and wants. The

scope of a product generally includes supporting elements such as

warranties, guarantees, and support.

2. People:

For service marketers, the core of the service element is the

interaction between those providing services and the customer,

which is known as service encounter. To achieve customer

satisfaction appropriate processes are designed to ensure that the

service encounter meets customer expectations. To deliver the

satisfactory services, the employees of a company have to play an

important role. Employees must possess personal qualities, ability

to understand and satisfy customer needs, flexibility, skills and

knowledge. Friendly and warm employees increase customer

loyalty.
3. Place:

In service place refers to location and use of distribution channels.

It is referring to the channel by which a service is sold (e.g. online

vs. retail), which geographic region or industry, to which segment

(young adults, families, business people), etc. also referring to how

the environment in which the product is sold in can affect sales.

4. Process

In Service Industry Process refers to how a service is provided

and delivered to the customer. IT relies on processes to

consistently deliver high quality solutions while executing a

growing number of engagements from multiple locations. Values,

vision and policies form the first level of our three-tiered process

architecture. They are implemented through process

execution at the next level. These processes are defined with clear

ownership using the ETVX (Entry, Task, Verification, and Exit)

paradigm and clearly defined roles and responsibilities.

5. Physical Evidence

The environment in which the service is delivered and where the

firm and the customers interact; and any tangible commodities that
facilitate performance or communicate the service. Physical

evidence enhances customer’s perception of quality. The general

elements of physical evidence include (Organization Physical

Facility):

Exterior facilities

Exterior design

Signage

Parking

Landscape

Surrounding environment

Interior Facilities

Interior design

Equipment

Layout

OTHER TANGIBLES

Business cards
Stationery

Billing statements

Reports

Employee dress/uniform

Brochures

6. Productivity

Productivity refers to the success or failure of any business, so the

quality of the product should be very good for his companies have

different quality standards which are certified by the quality

department and are approved all over the world. If one does not

have approved quality standards then he develops its own to meet

the quality that are demanded by the customers

7. Price

Software pricing strategy is price planning for a software firm takes

into view factors such as overall marketing objectives, consumer

demand, product attributes, competitors' pricing, and market and

economic trends. When a firm launches a product, the pricing

decision is one of the most critical decisions. Software pricing has

been concentrated the internal business objectives of vendors such

as costs, specified margins, and the competition. On the marketing

point of view, the goal of pricing strategy is to set a price that is

the pecuniary equivalent of the value perceived by the customer in

the product in order to meet the profit and achieve investment

goals.

8. Promotion

Over here, services and project consulting is through contract or

agreement between the parties and promotions are carried out only

for the particular client selected as upgrading and extended service

for a particular period, etc. This includes advertising, sales

promotion, publicity, and personal selling. Branding refers to the

various methods of promoting the product, brand, or company.

Brief About Top IT Companies

Wipro Technologies

Wipro Technologies is a global services provider delivering

technology-driven business solutions that meet the strategic

objectives of our clients. Wipro has 55+ ‘Centers of Excellence’ that

create solutions around specific needs of industries. Wipro delivers

unmatched business value to customers through a combination of

process excellence, quality frameworks and service delivery

innovation. Wipro is the World's first CMMi Level 5 certified

software services company and the first outside USA to receive the

IEEE Software Process Award. “Innovation is Wipro - Wipro is

Innovation” is our statement of purpose. The challenge this pursuit

presents to us every day is – how does one make Innovation

“Purposeful”, “ingrained” and “Deliberate” in our organization. We

recognize and nurture “innovative solutions” as part of our Wipro

values. We prioritize focus and resources guided by this value. The

Wipro way of Innovation is really about this deliberate sustained

innovation. Our purpose of Innovation is to create higher value for

our customers.

This continuous thought led us to foresee the benefit of partnering

with technology companies to bring value to our customers.

Combining these relationships with our strong R&D talent led to the

idea of “Lab on Hire” and subsequently to offshore development

centers which made offshore outsourcing truly mainstream. Pushing

this idea a little further helped us conceptualize the remote

infrastructure service model, branded as global command center or

GCC to manage the customer’s IT infrastructure. Today, we serve

our customers with a wide spectrum of services fuelled by the

power of innovation. Products define the identity of technology

companies, and the current business environment is looking to

adopt innovative ways to turn ideas into real products - quickly. In

addition, the complexities in technology and the advancement in

chip technology have created increasing dis-aggregation in the

industry. Wipro is the largest independent provider of R&D services

in the world. Using “Extended Engineering” model for leveraging

R&D investment and accessing new knowledge and experience

across the globe, people and technical infrastructure, Wipro

enables firms to introduce new products rapidly.

Wipro’s complete range of IT Services addresses the needs of both

technology and business requirements to help organizations

leverage leading-edge technologies for business improvement.

Wipro takes charge of the IT needs of the entire enterprise. The

gamut of services extends from Enterprise Application Services

(CRM, ERP, e-Procurement and SCM), to e-Business solutions.

Wipro’s enterprise solutions have served and continue to serve

clients from a range of industries including Energy and Utilities,

Finance, Telecom, and Media and Entertainment.

Budget 2009 & its Impact on the IT industry

The Union budget presented gives a long term direction to inclusive

growth, Infrastructure development, Education and employment

generation of 12 Million jobs a year.

In terms of the Impact on the IT industry, steps like the scrapping of

the FBT,extension of the 10A benefits till 2011, increase in the MAT

credit period to 10 years and increased allocation to education are

welcome steps. However, steps like the increase in MAT from 10 to

15% are going to have an adverse impact on the Industry in the short

run and this is something we could have avoided.

On the personal taxation, while the increases in tax limits are

nominal, the removal of surcharge on income tax will benefit

number of employees in our industry.

The Industry also welcomes the planned outlay of Rs. 2100 crores

to create ‘Educational infrastructure’ including setting up IIT’s and

interest waivers for educating students. These reforms will clearly

bring in a manifold resource increase for employability in the

technical stream

Tech Mahindra & Mahindra Satyam

Tech Mahindra is a global systems integrator and business

transformation consulting firm focused on the communications

industry. With the convergence of media and telecom, the changing

landscape of the telecom industry is becoming extremely

competitive. As companies rapidly strive to gain a competitive

advantage, Tech Mahindra helps companies innovate and transform

by leveraging its unique insights, differentiated services and flexible

partnering models. This has helped our customers reduce operating

costs and generate new revenue streams. Recognizing that margins

from connectivity are rapidly falling and that future growth in

revenues and margins will only come from new applications,

content and services, operators today are busy addressing business

opportunities revolving around Commerce, Content, Convergence

and Customer Experience to gain a sustainable Competitive

Advantage. For over two decades, Tech Mahindra has been the

chosen transformation partner for wireline, wireless and broadband

operators in Europe, Asia-Pacific and North America. Majority

owned by Mahindra & Mahindra, one of the Top 10 industrial houses

in India, in partnership with British

Telecommunications plc (BT), world’s leading communications

service provider, Tech Mahindra has grown rapidly to become the

6th largest software exporter in India (NASSCOM 2007) and the

second largest telecom software provider from India (Voice & Data

2007).Over 23,000 professionals service clients across the telecom

eco-system, from our global network of development centres and

sales offices across Americas, Europe, Middle-east, Africa and Asia-

Pacific. Committed to quality, Tech Mahindra adds value to client

businesses through well-established methodologies, tools and

techniques backed by its stringent quality processes. Tech Mahindra

is ISO 9001:2000 certified and is assessed at SEI-CMMI Level 5. Tech

Mahindra has also been awarded the ISO 20000-1 (IT Service

Management standard) and ISO 27001 (Security Management

standard) certification for its development centers across India and

UK.Tech Mahindra is certified at PCMM Level 5 for its people-care

practices and is the third company in the world to have been

appraised for SSE-CMM Level 3.

Mahindra Satyam

(the new brand identity of Satyam Computer Services Ltd. - NYSE:

SAY), a leading global business and information technology services

company, delivers consulting, systems integration, and outsourcing

solutions to clients in numerous industries across the globe.

Mahindra Satyam leverages deep industry and functional expertise,

leading technology practices, and an advanced, global delivery

model to help clients transform their highest-value business

processes and improve their business performance. The company's

professionals excel in engineering and product development, supply

chain management, client relationship management, business

process quality, business intelligence, enterprise integration, and

infrastructure management, among other key capabilities. Mahindra

Satyam development and delivery centers in the US, Canada, Brazil,

the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and

Australia serve numerous clients, including many Fortune 500

organizations.
HCL Technologies

HCL Technologies is a leading global IT services company, working

with clients in the areas that impact and redefine the core of their

businesses. Since its inception into the global landscape after its

IPO in 1999, HCL focuses on 'transformational outsourcing',

underlined by innovation and value creation, and offers integrated

portfolio of services including software-led IT solutions, remote

infrastructure management, engineering and R&D services and BPO.

HCL leverages its extensive global offshore infrastructure and

network of offices in 20 countries to provide holistic, multi-service

delivery in key industry verticals including Financial Services,

Manufacturing, Aerospace & Defense, Telecom, Retail & CPG, Life

Sciences & Healthcare, Media & Entertainment, Travel,

Transportation & Logistics, Automotive, Government, Energy &

Utilities. HCL takes pride in its philosophy of 'Employee First' which

empowers our 54,026 transformers to create a real value for the

customers. HCL Technologies, along with its subsidiaries, had

consolidated revenues of US$ 2.0 billion (Rs. 9,842 crores), as on

31st March 2009. HCL is a $5 billion leading global Technology and

IT Enterprise that comprises two companies listed in India - HCL

Technologies & HCL Infosystems. Founded in 1976, HCL is one of

India's original IT garage start-ups, a pioneer of modern computing,

and a global transformational enterprise today. Its range of

offerings spans Product Engineering, Custom & Package

Applications, BPO, IT Infrastructure Services, IT Hardware, Systems

Integration, and distribution of ICT products across a wide range of

focused industry verticals. The HCL team comprises over 60,000

professionals of diverse nationalities, who operate from 23

countries including over 500 points of presence in India. HCL has

global partnerships with several leading Fortune 1000 firms,

including leading IT and Technology firms.

HCL has created the ability to distribute value across the customer's

IT landscape through its well-distributed services portfolio,

significant domain strengths, and locally relevant geographic

distribution.

HCL has the widest service portfolio among Indian IT service

providers, with each of its services having attained critical mass.

Our five mature lines of business are R&D and Engineering, Custom

Applications, Enterprise Applications, IT Infrastructure

Management, and BPO Services. In addition, HCL has recently

launched its Enterprise Transformation Service offerings comprising

of Business, Technology, Application and Data Transformation – the

four broad needs of any enterprise.

Our ability to synergistically integrate these service lines across the

entire IT landscape creates new zones for value creation.

Additionally, HCL has created unique service leadership in each of

these areas through best-of-breed unique propositions.

HCL’s leadership in these service areas has been recognized by

several leading independent analyst.

In 2005, HCL started questioning the linearity of scale-driven

business models adopted by service providers (largely in the IT

application business). The questioning led us to the belief that the

market was rapidly approaching a point of inflection, that is a point

where the volume and value proportionality would change, opening

up new opportunities for service providers who aspire to focus on

value.

With this realization, HCL embarked on a transformational journey

that focuses on value centricity in customer relationships and on

leveraging new market opportunities, while creating a unique

employee experience. Hence HCL entered a new phase of evolution

– transforming it from a volume-driven service provider to value-

centric enterprise that turns technology into competitive advantage

for all its customers across the globe.

Today HCL’s new way of doing business is being recognized by

Harvard, IDC, Fortune, Forbes, Economist, Business Week and the

likes.

Patni Computer Systems

Patni Computer Systems Ltd. (Patni) (BSE: PATNI COMPUT, NSE:

PATNI, NYSE: PTI) is one of the leading global providers of

Information Technology services and business solutions. Over 14,500

professionals service clients across diverse industries, from 27 sales

offices across the Americas, Europe and Asia-Pacific, and 22 Global

Delivery Centers in strategic locations across the world. We have

serviced more than 400 FORTUNE 1000 companies, for over two

decades.

Our vision is to achieve global IT services leadership in providing

value-added high quality IT solutions to our clients in selected

horizontal and vertical segments, by combining technology skills,

domain expertise, process focus and a commitment to long-term

client relationships. Patni delivers high quality, reliable and cost-

effective IT services to customers globally. We provide world-class

technology services by constantly exploring and implementing

innovative solutions that drive long-term value to our customers.

Today, our solutions provide strategic advantage to several most-

admired organizations in the world. We have long-standing and

vibrant partnerships with over 300 companies across the globe. At

Patni, we are focused on optimizing our customers' investments in

Information Technology. We help customers envision and shape

their future around the key drivers of technology, productivity and

cost-effectiveness. Patni's robust methodologies and processes

consolidate decades of software development and maintenance

experience in delivering and supporting enterprise applications and

products.

Patni is an ISO 9001:2000 certified organization; assessed

enterprise-wide at SEI-CMMI Level 5 (V1.2), SEI-CMM Level 5 and P-

CMM Level 3. We have integrated Six Sigma techniques to focus on

continuous, measurable process improvement, with powerful

analytical tools and sophisticated review processes Polaris Software

Lab

Polaris Software Lab Limited is one of India's leading institutions

contributing to the knowledge economy of the global financial

services marketplace. In a quest for knowledge, spanning over the

last 2 decades (11 years as Polaris), Polaris has established its

solutions and services footprint globally contributing to the

realization of the business vision of some of the world's leading

giants in the money vertical.

Strong roots - Respectable Pedigree

20 years ago, Citigroup began its quest to pioneer the utilization of

the vast human intellect capital in India & the seeds of Polaris were

sown. Polaris was fortunate to be one of the first vendors that

Citigroup chose to partner with, through this Indian quest.

Simultaneously Citigroup also started its own company called COSL

(Citibank Overseas Software Ltd) which strategized and

operationalized Citigroup's vision of leveraging India. Today, Polaris

is an amalgamation of these two organizations that traveled the

path of successfully architecting & realizing Citigroup's India led

vision.

The Labor Pains of a Pioneer

The 2 Decade long journey was clearly an experience that helped

Polaris participate, witness and experience every pitfall, every

hurdle & fallacy in this path to leverage the Indian intellectual

capital. The challenges were many. The challenge of creating a

successful global sourcing model, the challenge of creating an

alternative distributed banking platform, the challenge of creating

global competitiveness from a third world economy, the challenge

of replicating success from one country to another… The biggest

challenge was in being the first one in the world doing all this.

Polaris Software Lab

Polaris Software Lab Limited is one of India's leading institutions

contributing to the knowledge economy of the global financial

services marketplace. In a quest for knowledge, spanning over the

last 2 decades (11 years as Polaris), Polaris has established its

solutions and services footprint globally contributing to the

realization of the business vision of some of the world's leading

giants in the money vertical.

Strong roots - Respectable Pedigree

20 years ago, Citigroup began its quest to pioneer the utilization of

the vast human intellect capital in India & the seeds of Polaris were

sown. Polaris was fortunate to be one of the first vendors that

Citigroup chose to partner with, through this Indian quest.

Simultaneously Citigroup also started its own company called COSL

(Citibank Overseas Software Ltd) which strategized and

operationalized Citigroup's vision of leveraging India. Today, Polaris

is an amalgamation of these two organizations that traveled the

path of successfully architecting & realizing Citigroup's India led

vision.

The Labor Pains of a Pioneer

The 2 Decade long journey was clearly an experience that helped

Polaris participate, witness and experience every pitfall, every

hurdle & fallacy in this path to leverage the Indian intellectual

capital. The challenges were many. The challenge of creating a

successful global sourcing model, the challenge of creating an

alternative distributed banking platform, the challenge of creating

global competitiveness from a third world economy, the challenge

of replicating success from one country to another… The biggest

challenge was in being the first As Citigroup gained the competitive

edge, Polaris gained two very critical experiences:

The experience of creating mission critical solutions with leading

edge functionality, built on reliable and robust technical

architecture which could be successfully implemented and

replicated across the globe. This capability is today brought to the

customer in the form of a suite of modular solution components

under the brand name of intellect Suite. The experience of creating

successful outsourcing models which enable global organizations to

sustain their competitiveness.

This experience has been converted into a predictable and

repeatable model of success and is known as the Entity model.

While the rest of the Indian market was busy building expertise on

COBOL, Java and Lotus, Polaris built expertise on Investment

Banking, Retail Banking, Credit Cards, Corporate Banking, Insurance

etc. one in the world doing all this.

Oracle Financial Services Software Ltd

Oracle Financial Services Software Ltd (Formerly known as i-flex

solutions), majority owned by Oracle®, is a world leader in

providing IT solutions to the financial industry. Company is having

experience of delivering value-based IT solutions to over 825

financial institutions across 130 countries Oracle is strongly

committed to the global financial services industry. To help

financial institutions, Oracle has brought together the industry's

best application and technology ecosystem for evolutionary

transformation, providing customers with the largest footprint of

functional assets.

Oracle's transformation strategy for financial services industry is

executed through the Oracle Financial Services Global Business Unit

(FSGBU), and Oracle Financial Services Software is an integral part

of the Oracle FSGBU. Oracle Financial Services Software, a

majority-owned subsidiary of Oracle, offers a comprehensive suite

of offerings encompassing retail, corporate, and investment

banking, funds, cash management, trade, treasury, payments,

lending, private wealth management, asset management,

compliance, enterprise risk and business analytics, among others.

With our process-driven approach for service-oriented architecture

(SOA) deployments, we offer banks the combined benefits of

interoperability, extensibility, and standardization. We also offer

best-of-breed functionality for financial institutions that need to

operate flexibly and competitively and respond rapidly to market

dynamics in a fiercely challenging business environment. Oracle

Financial Services Software has serviced over 880 customers in more

than 135 countries through our portfolio of products and services.

ORACLE DELIVERS KEY FUNCTIONALITY:

Only multi-channel sales, service, marketing, and transaction

solution preintegrated with core banking

Only open-standards core banking solution, enabling new products,

relationship pricing, and consolidation of existing systems

Most complete end-to-end risk and performance management

solution, extending into business operations and anti-money

laundering

World's leading financials solution for FSI with muti-GAAP, IFRS, and

multi-book code processing Only service-oriented architecture with

a banking-specific data model and process library

 Current IT Industry Scenario

Indian IT industry is one the major contributor to be reckoned for

economical growth of India for over a decade. Indian IT has seen

may rises and falls during its journey. Indian IT has got global

recognition and established a niche for it self.

Currently, Indian IT Industry is facing the following challenges:

1. Globalization Effect: With opening up of trade and commerce

across different countries in the world, opportunities are becoming

plentiful.

2. India’s advantage: Liberalization of our Indian government coupled

with talented manpower is successful in making India as destination

for other countries to shop for outsourcing business.

3. Threat from other countries: Current advantages of India will not

be guaranteed for years to come. We have many countries in the

 competition, not to forget giant China.

• Erosion of profit margins: Due to severe competition in the

outsourcing business model, profitability of an Indian IT company is

being severely affected

• Impact of US economy: As majority of outsourcing business is

coming from US, certainly US economic health is of critical

importance. US economy condition will have direct bearing on the

financials of IT services companies.

• Sustaining of Quality: in products and services offered by Indian IT

companies is of paramount importance in the light of stiff

competition offered by other countries. Quality is moola mantra for

any IT company, without which it can not exist.

IT company challenges:

As a cascading effect, Impact of IT industry challenges mentioned

above in turn has resulted in throwing up some more challenges to

an Indian IT company.
 Typical challenges are

1. Financial Austerities: Companies has resorted to different

mechanisms of cost cutting such as pruning of human resources,

bench cost, travel cost etc.

2 .Looking for optimal utilization of human resources.

All resources should be billable.

This means freshers should be billable from day one.

• Reducing bench cost. Keeping of reserve talent pool is done away

with.

• Cross skill training: Depending up on project needs, people of

specific skill set will be trained on different skill set as required in the

projects.

• Recruiting trained resources with good attitude and work culture.

• Reduction in ITP costs and time

• Expects fresher to have required soft skills in addition to Technical

and analytical skills

• To interact with clients presence all over the globe.

• Multi cultures mixing

• Client making choice of resources

• Shorter turn around time

• Maintaining of quality.

Future Outlook

With small and midsized businesses driven by the increased use of

technology the country's information and communication technology

market is estimated to grow 20.3 per cent annually to reach US$

24.3 billion by 2011.

A survey carried out to assist business heads of major outsourcers to

identify reliable, innovative and tech savvy firms had listed twenty-

nine India based companies amongst the best 100 IT service

providers including Tata Consultancy Services, HCL Technologies,

Genpact, and WNS Global Services amongst others. According to

the global InfoTech analyst International Data Corporation, the

Indian IT and ITeS market is estimated to grow at the rate of over

16 per cent to become a US$ 132 billion industry, significantly, the

domestic market alone is expected to become over US$ 50 billion,

with a CAGR of about 18.4 per cent. Simultaneously, the IT and ITeS

exports are estimated to more than double to US$ 78.62 billion in

2012.
 Sufficient demand, strong fundamentals and a favorable

environment support a positive outlook for Indian IT-BPO exports as

well as the domestic market, going forward. The Indian IT-BPO

industry is on track to reach USD 60 billion in exports and USD 73-75

billion in overall software and services revenue, by 2010. At the

aspired levels of growth, the sector would, by 2010, employ around

2.5-3 million professionals, directly, account for direct investment

of about USD 10-15 billion, and contribute 7-8 per cent of the

national GDP.

However, the scope of the opportunity is significantly larger. At USD

52 billion (excluding hardware), India accounts for around 4 per

cent of the worldwide spend on IT software and services. The global

sourcing penetration is estimated to be growing at nearly four times

the rate of absolute technology spends. Together, these two trends

signify a huge opportunity for the Indian IT-BPO industry.

In order to sustain India’s edge in the global markets and improve

revenues, Indian IT-BPO service providers need to shift towards

more market-facing breakthroughs. They could additionally, foray

new customer segments in intellectual asset-intensive service lines

like engineering and R&D services, creating IP in emerging

technology areas, developing and codifying specific domain

expertise to target consulting and system integration services,

technical innovations to develop their own standards for next

generation of technologies.

Finally, providers could enhance the role they are already playing in

helping improve the quality of education, by working closely with

the Government and academia to facilitate changes in the

curriculum and pedagogy, which directly influence the quality of

graduate output.