Key Findings of the Study * Wipro and HCL are the overall leaders in the ER&D and PES segment; followed by iGate, Infosys, Tech Mahindra & Mahindra Satyam and MindTree * Though Wipro and HCL are leaders with overall capabilities, companies like Aricent, iGate, Infotech Enterprises, L&T IES, Persistent Systems, Symphony Teleca establish themselves as leaders in specific industry verticals * China based Vanceinfo and EPAM Systems from CEE region have significant capabilities in the ISV - Enterprise Software vertical and are clearly in the leadership zone * Overall Indian ER&D and PES services market is USD 14.78 Bn as of FY 2012, representing an overall growth of 13 percent * Over FY 2011, the MNC Captive Centers grew by 11 percent whilst the Service Providers grew by 16 percent * Telecom and ISV verticals constitute almost 50% of the total Indian ER&D and PES revenues

1. July 2012
No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from Zinnov

2. Context
Global R&D spending is expected to grow by about 5.2% to more than
$1.4 trillion in 2012
The increase in R&D spend drives up demand in Engineering R&D
(ER&D) and Product Engineering Services (PES)
On an average, 45 % of R&D headcount (Captive & Outsourced) of
the companies is located outside of Headquarter country
The post 2000 period saw emergence of new global hotspots and a
shift of operations to Asia-Pacific and Central/Eastern European region
The service providers in the emerging regions are evolving as key
strategic partners to R&D companies; They deliver ~35% of the overall
ER&D and PES needs of R&D companies
Note:
Source: Zinnov Research and Analysis
2

3. Agenda
1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
3

4. Global Service Providers Rating is an annual exercise at Zinnov in which we conduct a
comprehensive analysis of the service provider landscape in ER&D and PES space
Zinnov is a leading management consulting firm in India with a focus on helping its customer globalize their R&D / Product Engineering
activities.
• With more than 125 active customers and close to 350 customer engagements in the last 10 years, Zinnov has been at the forefront of
evangelizing Globalization of R&D.
• Zinnov works with a number of fortune 1000 companies and its key customers include Google, Microsoft, Yahoo!, Intuit, Amazon,
Paypal, Honeywell, Hitachi, BOSCH, Schneider Electric, EMC, DELL, Samsung, LG, John Deere, Continental, Daimler etc.
GSPR 2009
• Zinnov conducted the first ever Rating of the top R&D service providers globally in 2009.
Zinnov’s GSPR, quickly became a well accepted document as an objective analysis of the top
Product Engineering Services Providers from Emerging Markets.
GSPR 2010 & 2011
• GSPR 2010 and 2011 was much more comprehensive and, ranked the top Product
Engineering Service providers across 10 key verticals and 2 horizontals.
• The ratings of the exercise was shared at no cost with 100+ Zinnov customers, as well as a
database of 14000 subscribers of our online reports, case studies etc.
• Zinnov’s GSPR has now established itself as one of the key components of the outsourcing play
book of most of our customers
4

5. GSPR 2012 was done across 10 major industry verticals
Industry Verticals
Computer Peripherals & Storage
Consumer Software
ISV/Enterprise Software
Consumer Electronics
Transportation & Logistics
Telecom, Networking & Communications
Healthcare
Aerospace
Semiconductor
Industrial Automation
Automotive
Service Offerings
Mechanical Engineering Services
E.q. CAD, CAM, CAE, etc
Embedded Engineering Services
E.g. Embedded H/W, Embedded S/W, V&V
Software Services
E.g. system software, device drivers, user experience design etc.,
5

6. Methodology
1 Zinnov – Global Service Provider Rating
Rating
2 GSPR 2012 Market Leader: Analysis & Insights
6

7. Zinnov’s GSPR is a structured process and it begins with the filtered list of top 75
R&D service providers from initial list of 200+ service providers across geographies
a c
Secondary Research Shortlist of 75 companies
1 Based on: Based on:
• R&D Service Landscape • Vertical Presence
• Geographic Spread • Focus on R&D / PES
Rating Invitation • Leadership Teams • Client Base & Business models
• Organization Size
b d
List of 200 Companies RFI Creation and Roll-out to 75 Co.
2 Primary Research
Data Collection Response Cleanup and
RFI Response Collection
Follow-up Clarification
and Analysis Secondary Research
3
Rating and Validation by Customer Final
Initial Rating Rating
Zinnov Experts Feedback
Validation
7

8. Zinnov’s proprietary GSPR methodology is based on a robust framework that
effectively quantifies qualitative data and subsequently uses a AHP model
Methodology
Data Point Classification AHP & Rating Scale
AHP Rating Scale
1 2 3 4 5
Data Point 1
Data Point 2
AHP is a statistical model used for assigning weights to the
Classification of company and vertical specific data points
dimensions and the data points. Rating point of 1 to 5 is
available from various RFIs
decided for each data point based on criteria
Rating & Zones Data Extraction & Rating
Score Rank Look-up
Companies were rated based on the scores arrived from
the previous steps, using the parameter based modeler. For all data points extracted from RFIs, corresponding
The vertical specific capabilities were then included to plot rating was mapped in the Rating Scale
the companies in Zinnov Zones
8

9. Results from the analysis were ported onto an AHP modeler to plot the relative
positioning of service providers across the Zinnov Zones at a vertical level
Zinnov Zones – Vertical Rating Model
Nurture Zone Breakout Zone Execution Zone Leader Zone
• On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
• R&D and PES as a focus area R&D services effectively, tear down , product development as a true To-Market for the product –Significant
purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
Attributes
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
service (Engineering / Embedded / Embedded and Software services and service types and at least generic Embedded and Software services
Software) Niche capability in one area capability level in one service type
• Formal innovation culture, resulting in
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits IP’s and strategic innovations
optimization tangible benefit to customers quantified
• Leadership role in alliances, leverage
• Generic - MoUs with universities and • Specific industry alliances, partnerships • Alliances with Customers who are startups, Specific academic research,
alliances and membership in Global forums Industry Leaders and co-creation with customers
• Acquiring new customers. • Acquiring large customers • Growing small accounts into • Succeeding as go to market
• Building product engineering • Growing existing accounts and deep relationships partner in emerging markets
Challenges
competencies repeat business • Building Concept to Market • Building end to products of
• Developing PES specific Sales • Developing across the PDLC Capabilities with deep domain their own
organization competencies expertise • Building product management
• Understanding the differences • Building domain capabilities • Building relevant IP’s capabilities
between PES/ IT Service • Building a product engineering • Executing on new & innovative • Scaling new vertical practices in
business culture within the organization business models PES to drive continued growth
• Driving innovation culture inside
the organization
• Focus on targeted customer • Focus on PDLC Skill • Focus on IP creation • Focus on end customer of
Recommended
segment and vertical Development • Focus on Account Mining and customers
Initiatives
• Build technology competency in • Focus on augmenting domain execution on new business • Drive customer led innovation
niche focus areas skills models • Build strong Go-To-Market
• Focus on building credibility by • Work on building trust with • Focus on internal and external capability to become viable
delivering on initial projects existing customers innovation incubation efforts channel partner for customers
9

10. Results from the analysis were ported onto an AHP modeler to plot the relative
positioning of service providers across the Zinnov Zones at an overall level
Zinnov Zones – Overall Rating Model
• Market Leaders across verticals
• Emerging Companies with Presence • Presence Across Multiple Verticals
Expansive •
Across Multiple Verticals
Focus on Building Competencies Across
• Strong Focus on IP Creation, Innovation
and Ecosystem Linkages across most
Multiple Verticals verticals
• Developing Cross PDLC Competencies • Excellent Breadth and Depth of Services
Vertical Coverage
across multiple verticals across most Verticals
• High Scalability across most verticals
• Market Leaders in Niche Verticals
• Emerging Companies in Niche Verticals • Well Established Competency in One or
• Focus on Building Niche R&D and Vertical Two Verticals
Competencies • Excellent Breadth and Depth of Services
• in Focus Verticals
Niche Developing Cross PDLC Competencies in
Focus Verticals • High Scalability in focus verticals
Emerging Established
Specialization, Scale, R&D Practice Maturity, Innovation & IP, Eco-System Linkages
10

11. Methodology
1 Zinnov – Global Service Provider Rating
Rating
2 GSPR 2012 Market Leader: Analysis & Insights
11

12. Overall Rating
HCL
Expansive
Wipro
iGate
Infosys
MindTree
Vertical Coverage
Clasoft Labs Tech M & Mahindra Satyam
Luxoft Symphony Teleca L&T IES
Infotech Enterprises
Tata Elxsi
GlobalLogic Persistent
Syntel Aricent Group
Mindfire Solutions Beyondsoft Sasken
BlueStar Quest Global
Cybage
Infotech
Niche Xchanging Aspire Systems
Virtusa
Vanceinfo EPAM
Sonata Software
Span Systems CoMakeIt
Emerging Established
Specialization, Scale, R&D Practice Maturity, Innovation & IP, Eco-System Linkages
12

13. Aerospace and Defense
Zinnov Zones – Leading Aerospace & Defense R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL
Infosys Infotech
Enterprises
Scalability Wipro Quest
Global
L&T IES
Luxoft
Tata
Clasoft Elxsi
Labs
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
13

14. Automotive
Zinnov Zones – Leading Automotive R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
Wipro
HCL
Infosys
Infotech
Enterprises
Scalability
iGate Tata Elxsi
Luxoft
L&T IES
Symphony
Teleca
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
14

15. Computer peripherals and storage
Zinnov Zones – Leading Computer Peripherals & Storage R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
Wipro
HCL
Symphony
Scalability Teleca Infosys
iGate
Clasoft Labs
MindTree
L&T IES
BlueStar
Infotech
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
15

16. Consumer Electronics
Zinnov Zones – Leading Consumer Electronics R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL
Symphony
Wipro Tata Elxsi
Teleca
Scalability
L&T IES iGate
MindTree
Sasken
Infotech
Low Enterprises
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
16

17. Consumer Software
Zinnov Zones – Leading Consumer Software Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL
Symphony
Teleca
Beyondsoft Persistent
Global Logic
EPAM
Wipro
Scalability Cybage
VanceInfo
MindTree Sonata
BlueStar Infotech Aspire
Low
R&D Practice • R&D and PES as a focus area • On the way into big league • Capable of delivering complete • Capable of performing concept to Go-
product development as a true To-Market for the product
Maturity engineering partner
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable components IP’s built, and • Formal innovation culture, resulting in
Innovation IP’s and strategic innovations
optimization tangible benefit to customers benefits quantified
Customer Type • Generic ISVs, Startups • Niche ISVs • Large Internet and Consumer ISVs • Large Internet and Consumer ISVs
17

18. Healthcare
Zinnov Zones – Leading Healthcare R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL
iGate
Wipro
Scalability Persistent Infosys Global Logic
Tech M & Symphony
Mahindra Satyam Teleca
L&T IES
Clasoft Labs
Tata Elxsi
BlueStar
Infotech Infotech
Enterprises
Aspire
Systems
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
18

19. Industrial Automation
Zinnov Zones – Leading Industrial Automation R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL L&T IES
iGate
Scalability
Wipro
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
• Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
Breadth service types and at least generic Embedded and Software services
service (Engineering / Embedded / Embedded and Software services and
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
19

20. ISV – Enterprise Software (Outsourced Software Product Development)
Zinnov Zones – Leading Software/ ISV R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
HCL Symphony Teleca
Persistent
Infosys EPAM
MindTree VanceInfo
Cybage
Mindfire Solutions Wipro
Scalability iGate Global Logic
Virtusa
Clasoft Labs Aspire Sonata
Xchanging Software
Systems
Impetus Span Systems Beyondsoft
Technologies
Luxoft
BlueStar Infotech
Low
R&D Practice • R&D and PES as a focus area • On the way into big league • Capable of delivering complete • Capable of performing concept to Go-
product development as a true To-Market for the product
Maturity engineering partner
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable components IP’s built, and • Formal innovation culture, resulting in
Innovation IP’s and strategic innovations
optimization tangible benefit to customers benefits quantified
Customer Type • Generic ISVs, Startups • Niche ISVs • Large ISVs and Niche ISVs • Worlds Largest ISVs
20

21. Semiconductor
Zinnov Zones – Leading Semiconductor R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
Wipro
Scalability HCL
Infotech
Enterprises
Tata Elxsi
Sasken
L&T IES
Luxoft Symphony MindTree
Teleca
Low
• R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D Practice R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity purpose fit labs engineering partner, Customer Labs investment in Lab infrastructure
Innovation • Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Connect Global forums and co-creation with customers
21

22. Telecommunication
Zinnov Zones – Leading Telecommunication R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
Wipro
HCL
Aricent
Group
Infosys VanceInfo
Scalability MindTree
Infotech Tech M &
Enterprises Mahindra Satyam
Global Sasken
Xchaging Logic Symphony -
Teleca
Persistent
Luxoft L&T IES
Beyondsoft
Low Span Systems
R&D Practice • R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity engineering partner, Customer Labs investment in Lab infrastructure
purpose fit labs
Breadth • Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
service (Engineering / Embedded / Embedded and Software services and service types and at least generic Embedded and Software services
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
• Generic - MoUs with universities and
Connect alliances partnerships and membership in Industry Leaders startups, Specific academic research,
Global forums and co-creation with customers
22

23. Transport
Zinnov Zones – Leading Transport R&D Service Providers
High Nurture Zone Breakout Zone Execution Zone Leadership Zone
Infotech
Enterprises
iGate
L&T IES
Scalability
Infosys
Low
R&D Practice • R&D and PES as a focus area • On the way into big league, delivering • Capable of delivering complete • Capable of performing concept to Go-
R&D services effectively, tear down , product development as a true To-Market for the product –Significant
Maturity engineering partner, Customer Labs investment in Lab infrastructure
purpose fit labs
Breadth • Niche capability in one type of PES • Generic Capability across Engg, • Niche capability spans across two • Niche capability across Engineering,
service (Engineering / Embedded / Embedded and Software services and service types and at least generic Embedded and Software services
Software) Niche capability in one area capability level in one service type
Innovation
• Innovation, if at all, in process • Innovation frameworks resulting in • Reusable IP’s built, and benefits • Formal innovation culture, resulting in
optimization tangible benefit to customers quantified IP’s and strategic innovations
Eco-system
• Generic - MoUs with universities and • Specific industry alliances, • Alliances with Customers who are • Leadership role in alliances, leverage
Connect startups, Specific academic research,
alliances partnerships and membership in Industry Leaders
Global forums and co-creation with customers
23

24. Agenda
1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
24

25. India is the world’s leading offshore ER&D and PES destination with ~22% market
share in the R&D offshoring segment
Growth in ER&D
Exports (USD Billion) 14.7
13
FY2011 FY2012
 The ER&D, PES revenue grew by 13% over FY 2011
 ER&D and PES segment contributes 19% of the Indian IT Exports
 India has close to 850+ MNC captive centers and 85+ service providers
delivering a wide range of ER&D & PES services
 15 of the top 20 Global Service Providers in ER&D and PES space are
Indian
Note:
Source: Zinnov Research and Analysis
25

26. Telecom, ISV and Semiconductor are the largest verticals in the ER&D and PES space
Vertical wise revenue distribution FY 2012 Captive & Service Provider Analysis
ER&D and PES Services
Semiconduc
tor
11% 100%
80%
ISV(OSPD)
Percentage
60% Service
32% Telecom Providers
19% 40%
Captive
20% Centers
0%
FY 2012
Medical Revenue
Devices/He Distribution
althcare Consumer
3% Electronics Computing Growth Rates in
Automotive
Others* 6% Systems ER&D and PES
8%
10% 7% Aerospace
4% MNC Captive centers = 11%
Service Providers = 16%
Others: Cons,Infra, Heavy Machinery, Energy, Industrial/Industrial Automation)
26

27. Service Providers contribute close to 36% of overall ER&D and PES revenues;
Software and Telecom are the verticals that are most catered to by service providers
Verticals Presence
Aerospace & Defence
 Cost pressure, Access to flexible capacity,
Automotive local market access for growth and
decreasing time to market are some of the
Cloud computing key reasons of driving ER&D/PES offshoring
Consumer electronics
 Indian ESPs have been expanding their
Consumer software capabilities across new verticals such as
Aerospace, Consumer Electronics, Healthcare
Computer Peripherals & etc.
Storage
Enterprise Mobility  Industry Automation being the most
underpenetrated vertical still offers a large
Healthcare scope of growth for service providers
Industrial Automation
ISV
Semiconductor Number of companies present in verticals
(by % of total companies covered under GSPR )
Telecom
Transport
<20 % 20-30% 30-50% 40-50% >50 %
27

28. Service Providers have built strong capacity of experienced professionals in Telecom,
Automotive and Consumer Electronics are other verticals with a better revenue mix
Service Provider Experience Pyramid
( Number of Years of Experience)
0-5 5-10 10-15 15+
6% 6% 5% 4% 5% 4% 6% 4%
9% 8% 8% 9% 9%
9% 12% 15%
27% 29% 28% 29%
34% 33%
33% 29%
58% 59% 59% 59%
52% 50% 54%
49%
Aerospace & Automotive Consumer Computer Healthcare ISV Semiconductor Telecom
Defence electronics Peripherals and
Storage
Note: Transport & Industrial Automation verticals were not included as the data was not sufficient to arrive at conclusive figures
Source: Zinnov Research and Analysis
28

29. Vertical Growth Insights
Verticals Presence
 Inorganic growth in Aerospace came through
Aerospace & Defence Quest Global’s acquisition of GKN Aerospace - In
Aerospace, Infotech & HCL were the major
Automotive contributors to the growth
 Companies like HCL and Igate grew in the
Consumer electronics Automotive space
Computer Peripherals &  Even though, there was a growth across the board
Storage in the consumer electronic space it was not
significant and hence posted a single digit growth
Healthcare
 Telecom witnessed a de-growth in revenues across
major telecom R&D service providers
Industrial Automation
 The growth in Healthcare/Medical devices was
ISV restricted to only the Industry leaders; Global Logic
significantly increased its capacity in this vertical
Semiconductor  The growth in Computer Peripherals & Storage
vertical was led by Wipro
Telecom
29

30. In their quest to improve the domain and technical capabilities the Service Providers
have significantly invested in improving the quality of experience pyramid
Improved Quality of Experience Pyramid
Experience Pyramid(2011) Experience Pyramid(2012)
4% 4%
11% 12%
28% 30%
56% 54%
0-5 yrs 5-10yrs 10-15 yrs 15+ yrs 0-5 yrs 5-10yrs 10-15 yrs 15+ yrs
30

31. Billing Rates
Average and Range of Offshore Average and Range of Onsite
Billing rates in USD/Hour Billing rates in USD/Hour
140
50
45 120
45 120
40
95
100
35
85.00
33.5
30 27
25 80 70
60.95
25
25 23.27 60 70
20 45.00
20 18.01
15 40 45
40
10
10 20
5
0 0
Project Design & Testing & Project Design & Testing &
Management & Development Support Management & Development Support
Consulting Consulting
Minimum Maximum Average Minimum Maximum
31

32. The mature delivery models, adopted by Indian service providers enables them to
offer multiple pricing options and hence still remain competitive
Tren
Model Insights
d
• BOT model has the least number of clients and engagements out of all Business Models
• Telecom vertical has seen a maximum increase in the number of engagements over the
BOT last year
• ISV and Computer Peripherals & Storage are verticals in which BOT model is not
followed
• Both the number of clients and number of engagements have increased for the Risk
Risk reward model
Reward • Aerospace, and Telecom verticals have the maximum adoption of Risk reward model
• The number of clients have remained same for the revenue share model, however
Revenue there has been an increase in the number of engagements
Share • Telecom verticals has the maximum adoption of Revenue share model, it witnessed
both an increase in the number of clients and number of engagements
• Fixed price is the second most preferred business model across all verticals except
Fixed Transport vertical where it is the most preferred model
Price • Fixed Price model has seen a tremendous increase in adoption in the Automotive,
Consumer Electronics, Healthcare and ISV verticals
• Time and Material continues to be the most preferred business Model across all
Time & verticals expect Transport
Material
Note:
Source: Zinnov Research and Analysis
32

33. Thank You
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