Competitive Landscape: Global Leaders in IT Professional Services Reposition for Future

Gartner RAS Core Research Note G00205369, Allie Young, Sandra Notardonato, Dean Blackmore, 27 September 2010, V2RA10 10032011

This report examines todays IT professional services competitive landscape in the context of how key providers are positioned for success and how they will compete in the near- to midterm future. We specifically focus on those providers distinguished as the global market share leaders and those who have successfully attained high market share gains in the past decade.
Key Findings
Until the economic downturn, growth in the IT professional services market was primarily driven by demand from mature markets in regions such as North America, Western Europe and Japan. Global IT professional services market leaders and those that have made market share gains must increase the focus on the emerging growth markets, such as India, China, Brazil and the Middle East, among other selected targets. The number of locations for global delivery centers will continue to expand as customers look to reduce risk to the IT services portfolio and exploit additional cost savings, and service providers establish local presence in strategic countries/markets. To help ensure customer satisfaction and greater consistency of delivery, providers are investing globally to tap into the global labor pool. Aggressive investment by the emerging market leaders (India-based providers) in consulting, process expertise, program management, and vertical expertise areas of the industry that were once considered insulated from lowcost providers. Primary areas of investment include sales and consulting professionals, vertical market knowledge, and offerings driven by business analytics. All providers, regardless of size, indicated a focus on creating new revenue streams that are nonlabor-based. Although this has always been a goal of the IT services providers, the greater propensity toward cloud adoption, industrialized solutions and utility-based consumption could finally drive success in achieving greater leverage in the IT services model. High technical competency and breadth of service line offerings is the norm. Yet differentiation among providers is driven less by the types of services and solutions offered and more by thought leadership. Thought leadership is developed through customercentricity and deep industry insights, which drive high satisfaction and long-standing relationships. As such, investments in marketing, sales acumen and vertical market expertise are paramount to success of the leading providers in IT professional services.

2
Recommendations
Strategic planners: To ensure your organization is able to identify, prepare for, and respond swiftly to market/business changes, formalize strategy planning sessions with key constituents at regular annual intervals; also include milestone strategy sessions to set a longer-term vision (three- or fiveyear milestones). Reassess your competition; look beyond the market share leaders to also understand how emerging providers are gaining presence. Sales/marketing professionals: Prioritize investments to showcase new offerings (cloud, alternative delivery models) that will differentiate your value proposition and demonstrate proactive value appropriately to their offerings and business models to respond and stay relevant; they also struggle to capitalize on the new technology forces while maintaining current labor-based business as clients slowly make the transition. Chief marketing officers (CMOs): Thought leadership marketing must be a core focus. The companys brand and positioning must form the basis for the development of thought leadership and strategy, and that strategy must be kept in alignment with the evolving direction and capabilities of the service firm. Executive management: In the future, proactive investments for R&D and innovation for the development of one-to-many offerings will be critical; capturing mind share ahead of your competition will be necessary to ensure return on investments. Formal processes to manage R&D in a services market that is not aligned to a client-funded deal will be the new norm. models and new technologies dominated by cloud, and the impact of economic and geo-political actions/events. Although at face value we conclude that the IT professional services market has been largely defined by todays global market share leaders (who have sometimes deftly and sometimes slowly responded to technology and market shifts), in the past decade we have seen an unprecedented occurrence, in which considerably smaller players entered and changed the market through the offshore or low-cost value proposition. Those providers distinguished as being in the top tier IT professional services ranks are global brands with long histories of building credibility, and will likely continue to make market share gains for some time. At a general level, they have grown revenue and client base through: Developing depth and breadth in the life cycle of design-buildrun IT services to gain greater client wallet share Focusing on strategic clients (and preferably reaching the CxO decision-makers and influencers) to accelerate and continue revenue gains Establishing a multinational (or global) presence to optimize reach/opportunity Building ever-deeper domain/vertical/technical expertise to optimize client relevance Acquiring companies to accelerate development of skills/talent, vertical presence, geographic presence and revenue/client base Advancing sales/marketing/branding to effectively reach target clients Service providers that have gained status as market share leaders know that they cannot rely on past success as a guarantee of future growth; and recent history has shown that those aspiring to gain market share can effectively outpace the market and the market leaders with unique value propositions. Those aspiring to become market share leaders have, in many ways, followed the lead of these dominant players building broader and deeper services and expanding to key markets have been the norm to define success. Emulating the market share leaders has seemed logical for most. Achieving high technical competence is a given, and is, therefore, typically less differentiating than other qualitative factors forming brand attributes. Yet, as proven by the market share gainers covered in this research that subset of IT professional service providers that since 2001 have distinguished themselves by unprecedented growth, market share gains, and growing credence as serious contenders for

ANALYSIS

Competitive Situation and Trends

Overview of the IT Professional Services Market
The global IT professional services market, a $624 billion market in 2009, includes a vast number of service providers, ranging in size/ scope from niche providers serving a finite local/target market to full-service providers positioned in multiple countries/regions with thousands of employees and multibillion dollar businesses. The one indisputable characteristic of this market is that it is highly fragmented; the top 10 providers represent only 29% of the total market. Although we consider this to be a mature market due to its considerable size and single-digit growth rates through 2014, the IT professional services market follows technology trends and responds to shifting buyer demand for IT solutions, which can change considerably in economic cycles. It remains, therefore, a dynamic market with considerable opportunity and unpredictability. For example, every IT professional service provider is challenged to address the multitude of varying economic conditions its clients face. Also at work today are the proliferation of new service delivery

2010 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

3
buyers professional services business this market is competitively open and dynamic. This group of providers has taken a different path for success, at least initially, to take advantage of market opportunity. In this subset of providers that we call the market share gainers, we see that success can be attained through offering a new core value proposition that breaks away from the core tenets of competitiveness of the leaders as listed above. In this research, we take a closer look at the market share leaders and market share gainers in IT professional services, why they were selected to be in this Competitive Landscape report, how they are poised for growth after the 2008-2009 economic recession, and what are the core elements of their competitiveness and competitive strategies.

Market Context
Looking toward the future IT professional services market, Gartner research identifies key industry trends and buyer behaviors that are accelerating some of which effectively level the playing field in IT professional services thereby creating both opportunity and stress for the current leaders and the market share gainers: Multivendor sourcing is the norm that effectively opens the door to new competitors and small/niche players being considered in enterprise accounts, raising the bar on competition Globalization increasing demand from clients in growth markets, portends to even greater use of global delivery and continuous mining of new lower cost talent pools; this opportunity is open to all providers Hyper-competition refers to a buyers market in IT services, in which a combination of factors coexist that drive widespread, cost-based decision making; in some cases, providers will accept lower returns to win the engagement that can jeopardize vendor viability and customer satisfaction in the long term. Cloud computing, an emerging style of computing using scalable, multitenant services/processes, represents an open window of opportunity for service providers to embrace for new solutions; through partnering and alliances, providers without infrastructure capabilities can play in this new platform for IT services Alternative delivery options proliferate, expanding options for buyers in how they consume IT services and from whom they buy services Standardized services (one-to-many models) challenges the benefit of traditional, people-centric service options; now traditional providers must prove value against automated services, such as software as a service (SaaS), infrastructure utilities (IUs), and business process utilities (BPUs) Consolidation changes the competitive dynamics overnight, with acquisition being used to incrementally change competitive position; cash-rich companies are positioned well to capitalize on a challenging market for strategic advancement from nonorganic growth Refer to Steering Your Business Through the IT Services and Outsourcing Revolution for other discussions on market trends.

Market Definition
In Gartners definition, the global IT professional services market is made up of thousands of providers worldwide who deliver IT professional services to help their clients with one or more of the following broad business functions: Design Consulting services for business or IT (which includes business consulting services, business process transformation, business process redesign or re-engineering, business performance improvement, corporate compliance, risk management, governance and sourcing advisory) Build Development and integration (which includes application development, deployment and integration) Run IT management and process management (also referred to as IT outsourcing and business process outsourcing [BPO]) Note that in Gartners definition, IT professional services excludes product support for hardware and software; product support is covered in separate research. See Dataquest Guide: IT Services Market Research Methodology and Definitions for an in-depth service line definition and explanation of Gartners forecasting and market share methodology.

Methodology for Research

Our goal for this research was to understand the state of the IT professional services market by analyzing competitive position, areas of investment, and business models. Our research also looks at how key providers have successfully competed to achieve a position of strength. Since the formula for success is inevitably measured through revenue growth and profitability performance, what better way to understand the competitive dynamics of a market than to look at those providers that have distinguished themselves through market share leadership or through notable market share gains in the past decade? However, to arrive at this select list of providers was challenging, given how fragmented the market is. The IT professional services market includes a broad array of providers globally, with strategies that range from full-service, life cycle offerings to support clients needs to design, build and run their IT systems, to more focused/ niche services strategies for a more narrow definition of services all of which have varying degrees of influence on the industry. We relied on Gartners IT services market share analysis (2009 revenue) as a starting point to select providers.

4
Following selection of the providers, we notified providers or our intent to write this research, and invited them to participate in a phone briefing on key questions regarding their strategic positioning, key market dynamics, investments, operating model, culture, and other topics. Providers also completed a written response to specific questions that we compiled. Following the interviews, Gartner analysts developed profiles that were then sent to the provider for factual review. Success in competitive bid situations due to distinctive approach/value, delivery, or relationship models The following providers were included based on this analysis: Deloitte, Tata Consultancy Services (TCS), Infosys Technologies (Infosys), Wipro, Cognizant and HCL Technologies (HCL). See Appendix for further explanation of the provider selection process.

Market Players
Selection Criteria for Inclusion in the Competitive Landscape
In determining which providers qualified for this report, several criteria needed to be met; again, we relied on Gartner 2009 market share data as a key determinant in evaluating provider performance and also qualitative assessment. These criteria can be split into two considerations for qualification: market share position and impact on the market. Market Share Position Top provider: First we examined those providers within the top 10 worldwide IT professional service providers in terms of 2009 revenue. Once a provider qualified by this criteria, we then applied second level of the market share criteria: Diversification of revenue: The provider could not generate more than 80% of its revenue in any of the following: a single region, or in a single vertical market. Based on these criteria, the following providers were included: IBM, HP Enterprise Services (HPES), Accenture, Fujitsu, CSC, and Capgemini. Impact on Market Significant growth: Looking beyond the top 10 market share leaders, we assessed providers of size (greater than $1 billion in IT professional services revenue) that showed a compound growth rate from 2001 through 2009 exceeding 15%. Once a provider qualified by this criteria, we then applied second level of the market share criteria: Diversification of revenue: The provider could not generate more than 80% of its revenue in any of the following: a single region, or in a single vertical market. Accelerated market awareness: An additional qualitative litmus test was used, corroborating the evidence of revenue performance, which was based on client interest; Gartner analysts recognize these players as having gained comparatively more brand awareness in the past 10 years due to their unique positioning and accomplishments, such as: Consistently shortlisted on deals on heightened mention/ interest in end-user Gartner inquiries

Revenue and Market Share of IT Professional Service Providers Covered in this Report
Table 1 provides the list of 12 providers included in this Competitive Landscape, including revenue analysis, market share performance, and ranking in the IT professional services market. (Profiles for each of these providers appear at the back of this report.) Specifically for the market share gainers, we performed additional analysis to validate their inclusion in this report by examining their compound annual growth rate (CAGR) from 2001 through 2009 (see Table 2). As Table 1 shows (see columns for 2009 Rank and Change in Rank Order 2008-2009), every provider included this report that appears in the top 10 ranking IBM, HPES, Accenture, Fujitsu, CSC, and Capgemini was negatively impacted in the 2008-through-2009 market downturn: Each had a negative annual growth rate and some lost points in market share, However, none changed its rank order position. This suggests that the scale/size of their operations is so significant that while the downturn was extremely impactful, they were able to retain their market share ranking. For example, even though IBM lost $3.5 billion in revenue in 2009, which resulted in a loss of 20 basis points of market share, it still holds a $20 billion lead over its next nearest competitor, HPES. Whereas the overall IT professional services market grew 7.1% compounded annually from 2001 through 2009, the market share gains posted by this group of providers ranged from 17% to an astounding 57% compounded annually over that same time period. Deloitte, the largest of this group (and ranked No. 16 worldwide in IT professional services) grew through a distinct strategy of maintaining private status as a professional services organization focused exclusively on an advise and execute business model. The acquisition of BearingPoints public sector business Acquisitions also contributed to Deloittes growth. The remaining market share gainers Cognizant, HCL, Infosys, TCS and Wipro are distinguished by their common orientation of low-cost, India-centric delivery and building their brands first in the North America market, and evolving into Western Europe and increasingly other locations.

5
Table 1. IT Professional Services Market: Market Share Leaders and Market Share Gainers Performance, 2009 (Millions of Dollars) Service Provider 2008 IT Professional Services Revenue ($M) 49,297 28,700 23,024 19,400 17,000 12,730 7,249 5,390 4,427 3,484 2,503 1,333 2009 IT Professional Services Revenue ($M) 45,742 25,705 20,267 19,361 15,889 11,616 7,202 5,452 4,362 3,794 2,893 1,672 2008 Market Share (%) 2009 Market Share (%) 20082009 Annual Growth Rate (%) 7.2 10.4 12.0 0.2 6.5 8.7 0.6 1.2 1.5 8.9 15.6 25.4 2008-2009 Revenue Change ($M) 3,555 2,995 2,757 39 1,112 1,114 47 63 66 310 390 339 2008 Rank 2009 Rank Change in Rank 2008 to 2009 0 0 0 0 0 0 2 (+) 1 (+) 0 5 (+) 5 (+) 14 (+)

IBM HPES Accenture Fujitsu CSC Capgemini Deloitte TCS Infosys Wipro Cognizant HCL

7.5 4.3 3.5 2.9 2.6 1.9 1.1 0.8 0.7 0.5 0.4 0.2

7.3 4.1 3.2 3.1 2.5 1.9 1.2 0.9 0.7 0.6 0.5 0.3

1 2 3 4 5 6 16 22 25 35 45 74

1 2 3 4 5 6 14 21 25 30 40 60

Source: Gartner (September 2010)

Table 2. IT Professional Services Market: Performance of Market Share Gainers, CAGR 2001-2009 vs. Total Market (Millions of Dollars) Provider Deloitte TCS Infosys Wipro Cognizant HCL Total Market Source: Gartner (September 2010) Annual Revenue ($M) 2001 2,020 747 407 478 76 259 361,607 Annual Revenue ($M) 2009 7,202 5,452 4,362 3,794 2,893 1,672 625,319 Revenue Change ($M) 2001-2009 5,182 4,705 3,955 3,316 2,817 1,413 CAGR (%) 2001-2009 17.2 28.2 34.5 29.6 57.6 26.3 7.1

The Future of Competition

The goal of this research is to take a broader view of these players in the context of the current market environment and challenges, by examining their revenue performance, key factors shaping competitive actions, investments for growth/future, and finally to provide summary profiles as to how each provider competes.

Actions Taken in 2008 Through 2009 to Address Economic Crisis

From interviews with leading providers in this research, and other Gartner research, the following behaviors among IT professional services companies were the key actions to address the challenges of the global economic crisis: Preserve profits

6
Reduce head count: In some cases, workforce rebalancing was used (moving labor from high cost areas and expand head count in low cost areas), but other companies simply used downsizing (reduced head count to improve profit margins) Shift delivery to low-cost areas Improve processes, standardize processes globally, and streamline administrative functions Focus selling efforts around infrastructure solutions such as virtualization, and other cost containment initiatives Despite the challenges to the top line, IT services providers executed through this past business cycle more successfully than earlier cycles particularly when it came to operating profitability. Several strategies drove this result, including rebalancing the workforce, shifting delivery to low-cost areas, refocusing efforts in areas that are deemed more mission-critical, such as infrastructure, and de-emphasizing areas that were considered more discretionary. The result was that most companies were able to maintain operating profits, and some companies were actually able to expand profits. A specific strategy taken by the large global providers was to reduce head count in mature markets and aggressively expand in low-cost areas. This resulted in providers being able to reduce prices for their clients and reduce overhead expenses. It has led to some concern from users, somewhat dissatisfied with the resulting service, though that may be mainly due to transitional problems, lack of comfort with offshore services delivery staff, and poor communication from the providers about the changes. The offshore providers on the other hand, did not have to rebalance the workforce per se, but instead rebalanced the workload. A larger percentage of work was delivered from global delivery centers, reducing the on-site effort. This also resulted in reduced costs to the end customer. In the end, the economic crisis increased transparency in the IT services industry and sustained profitability. Revenue growth, however, was negatively affected and the after-effects of the actions taken during the economic crisis continue to impact the top-line. These after-effects include revenue cannibalization as more services are delivered from low-cost areas deal sizes are naturally going to shrink. Also, the costconscious buyer behavior has driven higher demand for moreindustrialized, automated, solutions, which also has an impact on deal sizes and revenue growth. From a sales perspective, some providers increased efforts and investments in honing industry knowledge, sales acumen, and emphasizing solutions around areas such as infrastructure management, portfolio rationalization, and platform integration. Examples of providers that outperformed due to this strategy include Cognizant, HCL and Wipro. Deloitte also outperformed other providers, some of which was due to its acquisition of BearingPoint and some to its position as one of the only pure plays focused on the advisory side of the market. In the end, this economic crisis has had a lasting impact on the IT services industry. We will not see a return of the industry as we knew it and more important, successful providers will see the generation of new, more-profitable streams of revenue in the coming years. A key part for provider success in the coming decade of IT professional services will be based on ability to selectively pursue nontraditional service delivery models.

Competitiveness Built on Core Services, Skills

As the IT professional services market has matured, quality and breadth of core services (consulting, development, management) and skilled resources in these services is a given once a competitor reaches a certain size, and as such, differentiation based on service line alone is difficult. Service line skills are the core of competitiveness, although greater differentiation comes from how providers take these skills to market, package (or customize) offerings, approach client relationships, articulate value, respond to market changes, and organize to meet shareholder and client expectations. However, these providers heavily rely on their service line breadth, or depth or most likely both to deliver a reliable customer experience. Another aspect of the development and evolution of core services is the global delivery expansion these providers have adopted for competitive pricing, access to a broader talent pool, and to be responsive to client demand for broader options for resourcing skills. Overall, the level of investments in quality services and delivery resources is very high, and without quality services/people, leading providers would be unable to retain this position. Other Gartner research (SWOTs, Magic Quadrants, Market Scopes and Vendor Ratings and Profiles) drill down into more-focused or niche areas of IT services, where many of these providers are featured, and will be the primary source for ongoing evaluation in services capabilities and execution. Figure 1 shows for each provider evaluated the distribution by service line across the four major categories of IT professional services revenue: consulting, development and integration, IT management (IT outsourcing equivalent), and business process management (BPO equivalent). For all providers analyzed (excluding Deloitte), there is some level of participation across the full life cycle of IT professional services: Design Consulting represents a proportionately smaller portion for these providers revenue, but a critical area for growth Build Development and Integration represents an important part for all providers revenue streams, and for the market share gainers, was the core offering for market entry Run ITO and BPO (to a lesser degree) represent the largest portion of the market leaders IBM and HPES, as IT outsourcing was how they built their service business; Accenture entered through design/build offers, but has steadily evolved outsourcing. BPO is for most an evolving business, and typically very focused, and represents 15% or less of each providers revenue.

7
Deloitte has the unique position of being solely focused on the design/build portion of the IT professional services market. It has evolved a robust business by concentrating on the front-end advisory services and design/development of IT solutions. Although it will do some level of application management for clients where it has built the applications, it does not use it as a go-to-market primary offering. Sales Process for IT Professional Service Providers At this level of competition, the differentiation from one providers solutions offering to another takes a secondary role to the providers ability to communicate value via its sales process. The long-term nature of the professional services relationship and the evolving potential for IT services providers to impact organizations success imposes particular demands on the marketing and sales functions for providers to communicate their business value. As such, the one area providers continue to make investments is in quality sales professionals with vertical industry expertise. Some of the greatest investment in this area comes from the India-centric providers acquiring a mix of consultative and sales skills from the large global providers as a conduit to moving up the value chain in their offering. Reorganization has also been used extensively in the past two to three years by almost every provider to optimize the fulfillment of strategy. Alongside the explicit investments in hiring consultative and sales personnel, organizational models were used to accomplish one or more of the following: better align skills internally for service lines or offerings, focus on vertical markets, support new go-to-market strategies, or strengthen client presence. As providers emerge from the recession and demand increases for professional services, new opportunities for providers to refresh their marketing messages, positioning, and corporate branding present themselves. We see indication that more providers are considering new directions for their marketing given the changing market (see Marketing Essentials: How to Adapt Your IT Services Value Proposition to a Changing Market). Refer to the company profiles for a discussion of providers brand attributes.

Key Trends Influencing Competition in the IT Professional Services Market Today

Today, these market share leaders and market share gainers all face the same reality cost-focused buyer objectives, buyers seeking speed and agility, emerging alternative delivery models, consolidation, and very aggressive competition which Gartner refers to as hyper-competition. Furthermore, the collision of two forces traditional labor-based service delivery and that of an industrializing IT services market is reshaping value propositions and buyer demands. Furthermore, innovative delivery and pricing models are shaking up the traditional development/integration and outsourcing models, as buyers are investigating and incorporating new approaches into existing models for scalability, cost, agility or speed to market. Even more fundamental to competitiveness in the professional services market is a providers ability to address the complexity, uncertainty, and an increased buyers risk in the fast-paced global economy. Building deep vertical market insights and building/acquiring consultative capabilities have become part of providers actions to gain trust and confidence. In our interviews, these providers identified the following as the major technology-related trends/forces that are shaping their strategies, investments, and solutions that they believe will be critical for their competitiveness:

Figure 1. IT Professional Services Market: Service Line Distribution of Revenue, 2009

IBM HPES Accenture Fujitsu CSC Capgemini Deloitte TCS Infosys Wipro Cognizant HCL 0 10 20 30 Americas 40 50 Percent 60 EMEA 70 Japan 80 90 100

Asia Pacific

Source: Gartner (September 2010)

8
Standardizing platforms Customization (a key driver for IT professional services in the past) is migrating toward business process and technology standardization as a way to enable speed, agility, and to lower ongoing costs of operation. Virtualization Leading to new business models, such as pay-per-use offerings the emerging new alternative to laborintensive solutions and to the emergence of technology as a service (multiple options and new labels including technology-, platform-, software-, and business process-as-a-service). Online advisory services (OLASs) (consulting or advisory services that are partly or wholly delivered using automated online technologies) will evolve in a virtualized world. Nonlinear growth initiatives, industrialization and consumerization: These forces change the nature of IT services and how solutions will be delivered to market: private, public and hybrid clouds for cost savings, asset-light, flexibility; cloud infrastructure services, cloud computing solutions (e-mail, collaboration, cloud development and test); cloud platforms are examples here. Mobility New mobile platforms (such as iPhone, BlackBerry), and mobile industry applications must be factored into solutions, integration issues, and management. Predictive and business-focused analytics Mining internal/ external data, customer/performance intelligence, master data management; ultimately leads to a reinvention of the provider/ customer relationship and the opportunity to exploit data for new business insights. Globalization and global service lines Globalization of businesses and IT labor pools is an important growth opportunity: Global delivery is mandatory; beyond India to a multiregion approach to global delivery centers; expansion of markets/opportunities for clients and providers themselves, but process consistency is a priority and a top investment for global services. Role of government Regulation, compliance, privacy/ security, and oversight now impacts vertical markets and must be addressed in solutions. Economic, environmental and sustainability environmental and corporate social responsibility awareness; the imperative for IT professional service providers to integrate these three stakeholder values in sustainable solutions is a mainstream concern, supported by government tax incentives, operational cost improvements and represents business opportunities and challenges for providers. Although innovation is a broad and all-encompassing concept, behind each of these business or technology initiatives, providers are expecting that investments in service or product innovations will be tantamount to long-term success. Innovation can certainly include a focus on specific technologies (cloud, analytics and mobility) or services or business processes, but more relevant is the fact that organizations acknowledge that innovation must be prioritized through leadership directives, incubation groups, innovation labs, etc. They are not letting innovation occur in a haphazard way. Innovation is core to the client value from technical investments.

Investment Strategies
Industry forces are a major factor influencing provider investment strategies, to ensure leading-edge, relevant and profitable services and meaningful client solutions. These 12 providers have taken a strategic position on investments, and have adopted methodical approaches to determine their investment priorities. Key areas of investment noted by the majority of providers include: Geographic expansion (with a high focus on emerging markets) Acquisitions (for technical, vertical, and global delivery resources) Vertical skills/domain expertise (sales skills) Business analytics Cloud-based offerings Business process solutions (and related outcome-based services pricing models) From a geographic perspective, it is no surprise that these providers are looking to burgeoning growth from emerging markets, such as Brazil, China, India or Russia, as potential new revenue streams from these domestic markets; interestingly many also include the Middle East in their growth plans. In particular, buyers from India and China are investing heavily in infrastructure and its citizens and technology services will play an integral role. However, while the emphasis placed on selling efforts within these regions (domestic opportunities) has increased, a parallel strategy focuses on the expansion and evolving global delivery center presence. The examples in the market of strategic acquisitions among these providers are extensive, and none will be singled out in this report. Acquisitions did not play a significant a role during the throes of the uncertainty, as service providers looked to preserve cash and capital. However, we anticipate that the pace of acquisitions will accelerate the challenge will be in integrating these acquisitions, in which historically the service industry has not been very successful. Investing in vertical market and domain expertise is a top initiative for IT professional services firms. The level of granularity that a provider can display plays a key component in winning new business. Specific areas of investment from a domain perspective include infrastructure, business analytics and business process, while from a vertical perspective there seems to be a trend toward public sector, healthcare and energy. Business analytics is shaping up as one of the more-important trends noted by each of the providers, having importance across all the technology industry, including IT services solutions. As the

9
IT services industry becomes more automated and industrialized, the infrastructure and application layers begin to look more homogeneous from one end user to another. As such, business analytics as a means to gain specific insight for a client is the way IT services providers will help customers drive competitive differentiation at the business process layer. Driving this competitive differentiation at the business process layer is the intelligence behind the data which hinges on business analytics. As such, we see great investments in this area. Cloud computing was another area of investment mentioned by all providers. After a rather long period of modest uptake, cloud computing has become the hottest thing in IT services. Although still proportionately small compared with traditional, labor-based services, the promise of multitenant, multiclient externally delivered IT and process services as the future platform is one that cant be ignored. Other Gartner research explores provider investment in cloud services in more detail.

Global Expansion of Operations Is Essential for Delivery Operations and Revenue Growth
With the economic crisis of 2008 through 2009, the global market opportunity represents an even more important aspect for competition and the evolving business models for these providers. Interviews with providers revealed that globalization of their opportunity for revenue growth and wallet share expansion is being exploited, along with strategic global expansion of delivery operations. As the mature markets (North America, Western Europe and Japan) slow and economic uncertainty lingers, pursuing global markets is an option to offset shrinking opportunities. Therefore, at the same time providers focus on efficiency and cost controls to improve contract and project margins, and also seek to win their fair share of new business in mature markets, they are also looking at increasing their global presence by implementing new delivery centers to better serve their customers from all areas of the world (not just India). To varying degrees, the emerging economies are viewed as key opportunities for expansion by the majority of providers we interviewed. This includes India, China, Latin America (target countries such as Brazil are favored), and the Middle East was also mentioned by multiple providers. This consistent theme underlines the fact that providers will follow demand. This globalizing strategy also positions these providers to better support global clients, or those clients in the process of globalizing operations. To understand what countries/regional markets these providers serve today, we provide an analysis of service revenue by major regions of the world (see Figure 3). For all providers, with the

Vertical Strategies Dominate

Vertical strategies among these providers were consistently emphasized as essential to respond to client needs and a core part of providers specialization and ability to innovate. Providers are also getting very serious about how vertical expertise must be perfected in their go-to-market strategies; to this end, some providers have reorganized to optimize the vertical alignment of their services/solutions, and others are inculcating vertical teams in their global delivery network. Figure 2 provides an assessment of these providers service revenue, based on Gartner market share assessment.

Figure 2. IT Professional Services Market: Distribution of Revenue by Major Vertical Market, 2009
IBM HP ES Accenture Fujitsu CSC Capgemini Deloitte TCS Infosys Wipro Cognizant HCL 0 Financial Services Healthcare 10 20 Manufacturing Transport 30 40 50 Percent 60 70 80 90 100

Communications Utilities

Government Services

Wholesale/Retail Other

Source: Gartner (September 2010)

10
exception of Fujitsu (headquartered and largely serving the Japanese market), presence in the most mature markets, Americas (dominated by a North America client base) and Europe, the Middle East and Africa (EMEA) (dominated by a Western European client base) is the norm. In our research, we learned that providers can achieve operating profits that are double, and sometimes triple, that of the current levels through delivering cloud-based services. With some vendors indicating plans of growing nonlinear-based revenue to one-third of the business, the profit margin expansion potential cannot be ignored. The goal to create more leverageable streams of revenue has always been a focus for the industry. What seems incrementally different coming out of this recession is that IT service providers are more inclined to put capital behind the trend and spend more on product and services R&D in areas of development, tools, infrastructure, and software. While we do not expect this to have a meaningful impact in the near term, we do predict that over the course of the next 18 to 24 months, we will see more revenue generated from alternative delivery models, which will have a positive impact on operating margins.

Business Operating Models

Historically, growth in the IT services industry has been directly correlated to the ability to increase head count. Additional factors contributing to growth that are all contingent on the labor-based model include the ability to increase bill rates, chargeability of the billable employees, and increasingly volume or output. Supply and demand, therefore, is tied to a vendors ability to recruit, train and retain the right people. As such, the highest percentage of costs in the IT services business model is that of its employees. Until recently, people costs and lack of leverage (of individual output) capped the operating margin potential. What we are seeing in the current business environment, however, is a movement toward nonlinear growth, or more leveraged growth for business solutions, which is driven less by labor and more by technology (i.e., standardized, repeatable services). Consulting and advisory services are less impacted in this area. The movement toward cloud adoption, automated services, and utility-based consumption is the foundation of this new aspect of providers operating models, bringing much promise to the industry from a profitability perspective, as well as speed, cost-effectiveness, transparency, and leveragability to clients.

Competitive Profiles
The following are company profiles of the providers selected for this report (in alphabetical order). Please refer to the Methodology section of the report for the specific selection criteria. For each provider, we review the following to understand how these providers compete: strategic position; key investment areas for future growth in IT services market; brand attributes; and culture. We then provide a Gartner assessment for the provider (see Note 1).

Figure 3. IT Professional Services Market: Distribution of Revenue by Major Region, 2009

IBM HPES Accenture Fujitsu CSC Capgemini Deloitte TCS Infosys Wipro Cognizant HCL 0 10 20 30 Americas 40 50 Percent 60 EMEA 70 Japan 80 90 100

Asia Pacific

Source: Gartner (September 2010)

11
Note 1. Excluded Vendors For the service provider selection, for the evaluation of top 10 market share leaders in IT professional services, the following providers were excluded based on the methodology for qualification of revenue diversification by region/country: Lockheed Martin: 94% of revenue is from the Americas NTT Data: 93% of revenue is from Japan SAIC: 99% of revenue is from the Americas NEC: 94% of revenue is from Japan Asset-light infrastructure service offering: Continuation of strategy to pursue infrastructure outsourcing opportunity with asset-light solutions to better capture market share of bundled deals and establish mind share in cloud computing. Expansion in growth markets: Balanced new wins in existing client base in targeted markets, such as China, India, South Korea, Brazil, Mexico and Russia. R&D: Invest alongside its clients and engage with leading technology providers on new efforts; building and licensing software for select vertical market opportunities as well as third party enhancers modules that complement existing enterprise software products that are in the marketplace. Key Investment Areas for Future Growth in IT Services Market Application development and management; focus on new technology skills necessary to support cloud computing, interfaces, development and integration.

Accenture
Theme: Accentures demonstrates unwavering focus on Global 2000 clients, with relationships based on technology expertise and industry depth, applied to solving complex business problems. Core expertise in application development and management are complemented by asset-light infrastructure support and business process services, delivered globally and increasingly through alternative models. Strategic Position Technology independent: Vendor-agnostic, but aligned strategically with key technology companies such as Cisco, Oracle, Microsoft, SAP, and salesforce.com; eco-systems of partnerships in mature and emerging technology markets to better service its clients needs. High-value relationships: Engaging conversation at the CxO level to demonstrate business/technology knowledge and capture IT services spending; focus on complex business problems but also operational IT initiatives. Diamond clients: Promote high-touch, high-level relationships with key accounts as a major driver to top-line growth. Global presence and delivery: Able to support multinational engagements; client delivery teams leverage full capabilities of global delivery model at competitive price; increasing penetration in mature and emerging markets. Augment BPO with utility-based services: Leverage deep industry knowledge and technical depth as growth engine for business process utility services; implement with software tools and reusable assets to drive more profitable revenue.

Newer architectures, technologies and delivery models, such as cloud computing, SaaS, OpenSource, predictive analytics, and mobility. Building and licensing software for select vertical market opportunities as well as third-party enhancers, modules that complement existing enterprise solutions in the market. R&D talent, labs, and vendor partnerships with vendors create platform for innovation. Marketing campaign; build on brand equity with new marketing campaign that stresses innovation, execution, and thought leadership. Development of intellectual assets. Brand Attributes High performance delivered (strategy of executing improved business performance) Premium provider status, based on consultancy heritage High-value relationships: bring knowledge, insight Strategic partner to clients Complex work that requires global integration, subject matter expertise Ability to execute business transformation

12
Culture Global diversity High standard of professionalism across the organization that drives superior execution Commitment to clients, deep understanding of business issues Career development philosophy, partnership-track model as well as nonpartner professional career track Gartner Assessment Since becoming a public company in 2001, Accenture has expanded into the outsourcing business and aggressively built a global delivery organization creating a more-resilient organization with a balanced portfolio. In the recent economic cycle, its global delivery has been critical in ensuring the companys cost competitiveness and maintaining its profitability. Over the years, Accenture has benefited from its unique position, delivering highly customized, labor-intensive solutions in response to the demand for enhancement and transformation. However, the current economic environment and emerging trends in IT services are challenging Accentures high-touch value proposition as the market moves toward repeatable solutions and away from customization. One of the strategies the company is taking is in creating and licensing software for its clients, both as stand-alone modules in select market segments and third-party enhancers that complement existing enterprise solutions from vendors such as Oracle and SAP. This is a very aggressive, unique move on Accentures part, which should help expand its margin profile over the long term. In its outsourcing business, the companys asset-light strategy for infrastructure services has proven to be a fortuitous move as the market shifts toward off-premises, cloud-based offerings. Although the company is investing in alternative delivery models in areas of applications and business process (SaaS, BPU and cloud), the company needs to move quickly to establish mind share for its offerings as the IT services industry evolves. Some of its long-held value propositions will need to be repositioned and redefined in a marketplace that is shifting toward speed, agility, low cost and less customization. in both the Western European and U.S. markets to be supplemented by strategic acquisitions in Asia/Pacific and Latin America. Client-centric relationship model: Has developed its Collaborative Business Experience to bring a common discipline across Capgemini in terms of account development and management, and putting together the appropriate global teams to support clients business issues/needs. Seeks to work with clients, and not for, clients by developing business partnerships; becoming more of a preferred partner to create longer-term relationships and repeatable revenue streams. Growth of strategic accounts and business partner orientation: Achieved through the combination of a full spectrum of services (consulting, system integration, IT and process management, with a transversal concentration on five global service lines newly identified) and cross-discipline country boards, account management teams and account-based marketing. Cost competitiveness through Rightshore delivery model: Strategic focus on globalizing workforce; more than one-third of employees deliver services from Capgeminis Rightshore locations with the majority of it located in India (28,000 employees); by 2015, this will be about 50%. Aggressive hiring in offshore locations during this period means actual numbers of offshore employees will more than double, while onshore employee levels will remain constant. European nearshore alternative and market share expansion: Support European client base through Eastern European service delivery; will transfer the maximum amount of transactional work to lower-cost locations (for example, India) while leveraging the relatively higher-cost delivery centers (Poland, Romania and so forth) to focus on high-end processes that require language expertise or require data that must reside in Europe due to legislations/regulations. Capgemini is also growing other delivery locations (Argentina, Brazil, Chile, Guatemala and the Philippines). Technology-agnostic: Remaining independent from any technology provider allows Capgemini to focus purely on the interests of its clients and remain objective/agile to pursue key technology alliances. Leading-edge technology focus: Leverages Technology Alliance programs to form strategic technology partnerships/alliances for new/alternative service development (for example, Google, Amazon Web Services) and core software platforms (Microsoft, SAP, Oracle, EMC and IBM Rational) for which it will play the role of technical integrator. Develop ITIL processes: To offer a more-holistic set to clients, while also developing PMO and project capabilities. Focus on fast-growing areas of demand: Dynamically targets service lines, vertical markets and/or growth market segments

Capgemini
Theme: Capgeminis focus is to become one of the top-five IT professional services providers worldwide by 2015, through a combination of organic growth and acquisitions, global expansion, strategic client relationships, formation of an ecosystem of technology partners, and global delivery model expansion. Strategic Position Global IT services leader position: Extend global footprint to serve global/multinational clients; strong market positions

13
as the market changes; in particular heavy investment in recent years in its BPO and financial services offerings. Three Capgemini-developed initiatives formalize its commitment to technical leadership: TechnoVision (technology impact on clients); (Rapid Innovation, with Intel Capital); and Rapid Design and Visualization (RDV). Industrialized solutions: Will continue to develop repeatable, vertical-specific offerings (example, SMARTEnergy) to leverage its IP-based solutions and ensure profitable revenue growth. Key Investment Areas for Future Growth in IT Services Market Independence and technology agnosticism Global expansion: Acquisitions have been made in Asia/Pacific and Latin America as a way of expanding its service portfolio. Further acquisitions are being sought in these regions, as well as North America. Acquisitions will play a key role in the companys target of reaching a top-five position by 2015. Alliance program: Strengthens technical expertise and also enables certification and strategic development relationships. New business models: Vertical technology platforms in energy (management of smart meters) and healthcare (management of electronic data interchange) and procurement-as-a-service and accounting-as-a-service through its platform BPO offering. Vertical depth through centers of excellence: Sector-specific domain expertise is developed through centers of excellence (for example, life sciences, manufacturing and energy); these environments provide solution accelerators, innovation with thought leadership and people and skills development with domain-specific training. Innovation: Specific funding for centers of excellence to develop vertical solutions with clients, and such initiatives as Rapid Innovation (RAIN) to bring solutions to clients more quickly and reliably (than custom-built approaches). Global service lines initiative: Through 4Q09, five new packaged offerings were launched (application life cycle services, infrastructure transformation services, business information management, testing and smart energy services). In 1Q10, these accounted for one-third of bookings and one-quarter of revenue. Language investment: Serve all clients across Europe in local languages; investing in hiring talent with technology skills and language skills. Public sector expansion: Will diversify into the federal sector, based on core base of business today in the U.S. federal government. Employee development: Personalized career planning, training and competency development; Capgemini University serves as a learning center and training facility. Deep client relationships Formal mission statement: Enabling Transformation: Capgemini aims to enable its clients to transform and boost their freedom to achieve superior results Innovative, thought leadership in vertical markets, consulting-led Culture Capgemini Group 7 values: honesty, boldness, trust, freedom, team, spirit, modesty and fun Client-centricity, collaboration with clients Business partner, forms long-term client relationships Vertical competency, deep technology skills Gartner Assessment Capgemini is focused on building a global brand based on its strong European heritage and market position as a provider of full-scope high-quality services, deep client relationships, and vertical industry-led engagements. Although it does not pursue the low-cost provider status, it is seeking cost-competitiveness through its Rightshore delivery model a key initiative for growth and an essential element in addressing client demands for IT cost reduction. Capgemini aims to be a top-five player in the worldwide IT professional services market by 2015; today it is ranked No. 6 globally, with approximately a $4 billion gap between itself and the No. 5-ranked CSC. An acquisition of size will be required to bridge that gap. However, with consolidation in the market likely to continue, it will be challenging for Capgemini to acquire the right company(ies) at the right price; other contenders for market leadership are also pursuing acquisition strategies. From its history, Capgemini has proven that it will not shy away from what it sees as strategic acquisition targets: the acquisitions of Ernst & Young (2000) and Kanbay (2006) were of significant size. The company has formally stated that its acquisition strategy will align to its overall strategy, technology and service line expansion goals. Productivity improvements: Goal of reducing internal costs for provisioning of services, management of billable professionals, and procurement initiatives to drive higher operating profits; better profits on leveraged approach to deliver services should also contribute to higher profits. Is also investing to increase productivity through rolling out lean methodology to support client engagements with these new processes. Brand Attributes European heritage, multinational/globalizing provider

14
Deep consulting skills and vertical expertise will remain a cornerstone of Capgeminis competitiveness. However, it has also identified the expansion of its outsourcing business, which is more resilient in economic cycles, as a key growth priority; today, outsourcing accounts for about one-third of its total revenue. Capgemini is a competitor for large, complex, full-service outsourcing, where it can bring vertical/consultative expertise, yet it rarely pursues mega-deals (more than $1 billion in total contract value). The company is addressing the market shift to utility services (cloud-based, pay-as-you-go models) in specific relationships with key technology partners, although the success of these relationships has not always been well communicated or understood (a good example is the recent announcement of the deployment of Capgemini Immediate e-service platform at Royal Mail Group). Capgemini is investing in new business models, and will likely focus on vertical technology platforms (such as its Smart Meter solutions) and platform BPO (such as the e-procurement platform acquired from IBX). From a competitive perspective, the success of the Indian IT services providers is a continuing threat to full-service providers such as Capgemini. The India-based providers success in shifting from the purely application services space (where their brand is very strong) and into application and infrastructure management ITO deals means they are competing directly with Capgemini on many midsize ITO deals. The Rightshore initiative is Capgeminis reaction to this threat, and its continued investment in this area is critical. As the company builds out its global delivery strategy, and accelerates hiring in low-cost countries (Poland, for example), revenue is likely to be further cannibalized, but profits should expand. Capgemini has not been able to expand its operating profits at the pace of its peers, due to its cost structure. The convergence of telecommunications providers (Telefonica and France Telecom), providers with a strong product heritage (Dell and Xerox) and disruptors (cloud-based providers) could also become a more-direct competition. Gartner considers Capgemini to be well positioned within the IT services market because of its strong brand in EMEA (which represents the second-largest buying market) and a growing brand awareness in North America (though still lagging behind the awareness it has in Europe). We anticipate that the company will pursue acquisitions in the coming two to three years, although growth by acquisition in the services industry has historically resulted in challenges in driving a return on invested capital, and integrating intellectual assets. Capgemini demonstrates strong leadership discipline and a strategic vision for its growth and client success. To achieve its growth objectives, in addition to acquisition, it must prioritize organic growth opportunities through greater focus and investment in account management and sales, which will be essential to accelerate cross-sell in established clients as well as new client development. Its value proposition must be clear and strong in todays market, where cost remains at the forefront of end users minds when selecting a service provider. Because weak economic conditions persist in Europe, where Capgemini derives almost 80% of its revenue, it must be prepared for cost-focused decision-making. Cognizant Theme: Cognizant emphasizes a high-touch experience with a client engagement model that provides ongoing interaction from client relationship management to service delivery. The companys strategy continues to be to drive growth and targeted operating margins that allow for consistent investments in clients, people, processes, and new solutions. Strategic Position Selective, targeted growth strategies: Four regions (U.S., U.K., Continental Europe and Asia/Pacific), four vertical markets (financial services, healthcare; manufacturing and retail; telecom and media), and four service lines (business consulting, business process, applications, infrastructure) as a road map to maintain focus for growth. Differentiation based on vertical depth: orients go-to-market strategy, hiring, and investments to develop vertical market expertise and establish referenceable client base. Reinvestment in growth: Long-standing, board-approved practice and philosophy to reinvest non-GAAP operating profits (above 20% of revenue) to maximize client wallet share and build long-term customer relationships; no change to this strategy is expected for the near future. Messaging targets CIO business and technology issues: Via full-spectrum service line coverage (consulting, business process, applications and infrastructure); driving client success in areas of optimization and efficiency, but expanding into transformation, innovation and growth. Client segmentation to align growth opportunities: Client base is segmented into three categories (cost-focus, innovationfocus and growth-focus); Cognizant has primarily delivered to the cost-focus client, but its investments in new skills, vertical knowledge and consultative capabilities expand its opportunities with other segments of client spend. Targeted acquisition strategy: Continue to focus on selective acquisitions to gain skill, regional expansion, and vertical market expertise; recent areas of focus include business process capabilities and program management skills. Financial rigor: As a U.S.-based company, corporate governance standards comply with SEC guidelines and the oversight of other federal governmental bodies; visibility of operating model results in consistent financial performance. Investment in alternative delivery models: Milestones mapped through 2012 for areas of investment in cloud sourcing that include business process as a service, SaaS, infrastructure as a service, and platform as a service (which has already been rolled out).

15
Key Investment Areas for Future Growth in IT Services Market Vertical competency and orientation: Cognizant has identified the four broad vertical groups in which it will continue to build deep knowledge and expertise; in each of these verticals the company is expanding subvertical focus to develop business acumen in order to expand its service offering with the goal of moving its relationship to the CIO level. New capabilities: Enterprise analytics practice (EAP), Engineering and manufacturing services (EMS), BPO, and IT infrastructure services. Verticalized BPO: Cognizant is leveraging the BPO skills acquired through the acquisition of the UBS captive in 2009 further into the financial services vertical industry and into healthcare. Client relationships: The flexibility of the Cognizant targeted operating model, with inherently lower, but consistent, margins than its comparable peer group, results in the companys ability to invest alongside the client at Cognizants expense, which leads to greater revenue per client growth. Regional investments: Expansion into new regions as part of its revenue growth strategy; areas include further penetration of the U.K., Continental Europe (including France, Germany, Switzerland, Benelux and the Nordics, among others); Latin America; and Asia/Pacific (through existing clients). Limited emphasis on China as a market until the company has a better understanding of the opportunity in that region. Strategic hiring during the downturn and continued investment in new hires in business consulting and program management, positioning the company for economic rebound. New business models: Focused on BPaaS (what Gartner refers to as BPU) software, platform, and infrastructure as a service; emphasis on finding revenue streams driven by models that require less human labor and a greater reliance on tools, processes, software, and repeatable solutions. Tuck-in acquisitions, selective alliances (some of which are slated to be announced later this year). Building Cognizant brand in India to further acquire premium talent at the graduate university level. Cognizant Capital: Initiative to invest in its employees ideas and innovative solutions; decisions to invest are based on growth opportunity, total addressable market, and the creation of nonlinear revenue streams. Brand Attributes Customer intimacy: Building stronger customer businesses and client first approach Visionary: Market trends/forces that will impact clients CIO focus: vertical market expertise drives impact at the client Invest for growth: Listens to clients and responds; understanding its target markets and clients business needs Innovation focused; create new approaches to solving clients problems Culture Serve clients well; Prove they understand what clients value and create the right solution, positive experience, and client loyalty Culture of client-centricity and rigorous processes, with an undertone of humility Technical depth plus business orientation; top recruiter of MBA and engineering talent out of India Global orientation: Indian heritage blended with U.S. management and sales practices High achievement: High standards of performance based on rigorous metrics-based analyses; passion for making a difference Gartner Assessment Cognizant demonstrates leadership in the clear articulation of its strategy for growth: invest in core business; develop and grow new capabilities, and invest for long-term growth. Cognizants market leadership in terms of revenue growth throughout the downturn evidence of its client-relationship orientation is also attributable to its disciplined focus on strategy. Further, delivering consistent non-GAAP operating margins at 19% to 20% provide the company with the flexibility of investing in its clients, people, processes, and new solutions. This strategy, which is a unique foundation for Cognizants differentiation in the market, and its ability to mine client relationships in the downturn, has yielded dividends and has likely been a key factor for the companys higher market share gains versus its comparable peer group and the global providers. Another strength of Cognizants is its global executive leadership team, which maintains close observation of the market and its client base, and clear strategic goals set annually and over a fiveyear period. As part of its mapping of investment milestones for alternative delivery models, Cognizant has set forth what may prove to be a conservative strategy, if the company wants to capture mind share in the early stages of a changing IT services industry. Early

16
market adopters will be watching to see which providers will take an aggressive position; we do not see Cognizant as a trailblazer in cloud/alternative delivery models, but taking strategic steps to address this long-term market shift. To that end, the company has formed Cognizant Capital to fund the development of innovative alternative delivery solutions; it will invest in ideas that employees introduce which demonstrate the ability to drive top-line growth through new revenue streams. In our opinion, Cognizant will also need to evolve a well-defined ecosystem (partners and strategic alliances) to support industry-focused solutions that are aligned with its overall vertical market strategy. In the near- to midterm, application development and maintenance are likely to be the strongest areas of growth for the company, augmented by core infrastructure and business process where it is making key investments. The companys ability to capitalize on the business process market will be necessary if it wants to continue to move up the value chain because it will be at the business process layer that vendors will be able to use to guide its clients to drive true competitive differentiation. Furthermore, while Cognizant has reached its targeted goals of penetrating the European region, its growth will be contingent upon its ability to further leverage its strategic alliance in the region, but, more important, accelerate its organic strategy to capture a greater share of what is a growing opportunity beyond the financial services industry. IT transformation (including cyber, applications, cloud and modernization/transformation techniques); business-focused analytics (building on applications, BI and industry vertical expertise; and Industry vertical BPO (leveraging vertical expertise, IP and IT infrastructure and cloud heritage and cyber capabilities). Support the CIO: Continues to sell to the CIO CTO buyer, but creating vertically focused/value-added services that can be consumed in a utility-type model: more interface with business stakeholders. Next-generation cloud investments: Vision is for vertical wrappers for cloud solutions, and use IP as leverage into productized services Expansion and diversification in its global footprint: in both delivery model and in target client base, CSC will broaden its position and reach. Align with technology partners and service competitors to participate in value chains: Aggressive identification of key technologies to be included in CSC solutions and cloud offerings will position CSC with particular technology partners and ecosystems. R&D commitment: Leverage R&D investments to identify the key technologies/vertical industries where it sees the most opportunity for revenue growth and brand building (healthcare, cloud services, business analytics, for example). Business outcome focus: Shift from time-and-materials contracting to outcome-based business engagements through packaged solutions, delivered in fixed-fee engagements, that enable clients to adopt new technologies sales and marketing redefined: New attention/investment in evolving global sales/ marketing strategy to driving top-line growth; Cross-pollinate brand and technological expertise developed in public sector and harvest in commercial arena. Cost-competitive services: Leveraging low-cost centers globally to bring services expenses in-house at lower cost expansion of onshore low cost centers. Cyber security: Will cross-pollinate brand and technological expertise developed in the public sector and harvest in commercial arena. Key Investment Areas for Future Growth in IT Services Market Brand: Rebranding CSC, sales and marketing investments to support rebranding Industrialized services: cloud, cloud-based platform, technology as a service offerings development (greater emphasis on applications and process layers, but also evolve infrastructure platform)

CSC
Theme: CSC continues to build on a heritage of being financially sound and customer-responsive. Proactively enhancing traditional portfolio with industry-vertical-focused business process and applications services underpinned by new cloud/industrialized infrastructure offerings across the infrastructure, applications and business process layers to anticipate market changes and accelerate growth. Strategic Position Industrialized services: Building on ITO/technology heritage to expand into industrialized managed services, cloud offerings, and applications-centric solutions (but complemented with customized services as needed); focus on business first approach emphasizes the importance of the business process and applications layers. Managed services: Building ITO/technology heritage to expand into industrialized managed services, cloud offerings and application-centric solutions. Will build on current position to leverage and enhance midsize/single tower deal market presence. Balanced portfolio for growth, leverage outsourcing/ annuity-based services with discrete offerings and vertical solution-based offerings; will also expand into midsize deals and single tower deals Reorganized to support clients more effectively: Go-to-market strategy and organization has shifted from a geographic orientation to a business process and vertical focus in four areas: Premises-free business services (building on cloud, cyber, applications and social networks); next-gen

17
Communications solutions: Flexible service delivery, including on premise, hosted, cloud, or hybrid solutions, telepresence and video solutions Vertical solutions: Targeting federal and state and local government, manufacturing, healthcare, financial services, chemical energy and natural resources, and technology and consumer, and cross-vertical solutions; target and leverage federal and commercial experience and client base. New focus to move toward global public sector vertical industry. Security: Cyber security (suite of services in commercial area) Partnerships: Particularly in cloud and alternative delivery models (such as iRise, Cordys, Google and Cisco) Analytics: Business intelligence/analytics, business collaboration Emerging markets: Focused on high growth regions, especially Latin America, Eastern Europe and China. Asia/Pacific: New facilities and service centers in Beijing, Shanghai, Gungzhou, Tianjjin and Hong Kong, large investment in Kuala Lumpar, Malaysia to expand application and BPO capabilities, acquisition of First Consulting Group in Vietnam Brand Attributes Ingenious, passionate, purposeful Viability: Longevity, fiscally sound and reliable Customer-centric Technical/engineering roots, systems focus Adheres to process and delivery methodologies; process centricity in delivery Operational, service delivery excellence Multivendor communications solutions Culture Creative/consultative culture in which individuals creativity is encouraged and honored (to add value to customers) Respect and empowerment of CSC employees Do right by the client: manage relationship and contract Technical prowess Gartner Assessment In the past two years, CSC reorganized its go-to-market strategy from a geographic orientation to a vertical industry orientation to better serve clients. It also has been invested in transforming its brand and image in the IT services market from a steady as you go IT outsourcer known for its large, multiyear IT outsourcing deals and strong federal government business toward a brand that associates CSC as a more-aggressive, forward-thinking vertical solutions provider. Although more success has been realized in the U.S. than in Europe (which still is not fully integrated in the new CSC way), CSC still has more work to fully reach its goals of a consistently understood, revitalized brand. CSC is repositioning its service portfolio. It has taken bold, strategic moves to align its skills to the future IT services market and the services that it envisions its clients will need: cloud services, new applications skills, vertical solutions, analytics, and collaboration, among others. To this end, CSC is capitalizing increasingly on its consulting and applications skills, vertical experience, and emerging platforms for alternative services delivery to recreate its image, opportunity and client perception. In the network outsourcing space, CSC envisions a new role as a communications integrator in which it can leverage multivendor integration and management capabilities. Focus on sales/marketing has been a priority to drive this new image, generate new business and increase market awareness of CSCs applications skills, global delivery, cloud, cyber security, desktop virtualization, and vertical solution. Although new deal pursuit has been the target for these services, one of CSCs greatest opportunities will be to roll out these new offerings to its installed base. CSCs strong revenue underpinning of its annuity business and federal government contracts, significant wins of large outsourcing deals (including the only megadeal signed in 1Q10 with the extension of its United Technologies contract and key clients such as Zurich and Raytheon) contribute to CSCs image as a successful, reliable, financially viable and responsible provider. Yet it recognizes that it must also tap into pent-up demand for value-added services and emerging cloud solutions to continue its growth trajectory, and it is decisively moving in this direction. CSCs aligning itself in value chains with key alliances, and optimizing its own IP in-client solutions through accelerating innovation internally, shows a new energy to take a strong position in the future services market.

Deloitte
Theme: Deloittes focuses on a business-led approach to solving clients problems: focus on high-touch client relationships, established through business and advisory services and a partnerled business model; takes clients complex problems and focuses on outcomes by applying functional skills with industry insight/ knowledge.

18
Strategic Position Private partnership status: Partner model; ability to manage growth and profitability achieved through breadth/depth of offerings and ability to reinvest for long-term growth, without reliance on capital markets; high performance expectations and focus on ROI. Partner-led model: Partners have delivery goals (billable hours) and client pursuit and engagement management responsibilities; Global Lead Client Service Partner (LCSP) model allows clients to have one point of contact and coordination on a global level. High-touch relationship model: Focused on consulting and advisory services, execution and implementation in the IT professional services market; value-based approach to client relationships; assumes a solution agnostic positioning in the market. Consulting and advisory services focus: Core capability areas include strategy and operations; human capital; enterprise risk; finance; technology and integration; and audit and tax advisory services. Value-driven approach in client engagements: This means a business-led and IT-enabled positioning in the market; approaches a client problem with deep competencies and capabilities. Meets the needs of senior business executives across business functions: Expertise and brand grants access to the C suite in client organizations, where it seeks role of trusted advisor, this means relationships are often driven from the top down and can be strategic. Industry focus and expertise: Differentiates on depth of industry insights that it can bring to each of its capability areas; the vertical aspect of its functional capabilities is essential to its ability to differentiate its solutions and win business. Talent development and retention: Focus on hiring and developing talent through formal programs, Deloitte University (soon to be launched), and career development; the partnership model attracts and retains high-quality talent. Balanced growth globally: Views mature/developed market as an engine to growth in the near term, but also places priority on emerging markets (China and India) as critical to future growth opportunities. Operating and investment discipline: Talent investment in a labor-based model is critical, but also focuses on costcompetitive market realities; will avoid capital intensive outsourcing business (exceptions are its hosted application management services offering and select engagements where their clients ask for their involvement in managing applications) and focus on lowering costs of services in implementation business. Global delivery capabilities/hiring: To complement (not displace) labor pool, and attract deep skills. Being relevant to clients changing business needs: Annual strategy review, complemented by long-term planning to avoid missing key opportunities or risk under-investment in growth opportunities particularly in times of disruptive change. Key Investment Areas for Future Growth in IT Services Market Talent and skills development: Investments in hiring talent (even through the downturn), but also in developing resources in key services; when demand shifts, will invest to move skills to other strategic growth areas. Talent investments also take the form of internal training/development via Deloitte University (a $300 million investment) (plans for a similar university in Asia); and Project D-Think, an internal knowledge sharing/capture project. Global delivery resources: Near- and long-term expansion of its resources in lower-cost countries and both offshore and nearshore global delivery centers (India and China are priorities) to ensure its cost-competitiveness, while ensuring alignment with Deloittes business model (high-value services); focus on hiring quality skills that complement and integrate with key lines of services; HR model, training and development and certification expectations are consistent with near and on-shore model. Acquisitions: Continuation of targeted acquisition strategy to acquire capability, talent and tools and methodologies either through large acquisitions (such as BearingPoint) or smaller, tuck-in acquisitions (ReportSource in the U.K.). Capability investments for emerging business challenges: building capabilities in service lines (hiring and training/ re-training) with emphasis in identified growth opportunities: Business analytics, risk/compliance, M&A, climate change and sustainability, sovereign wealth funds and central bank services, international financial reporting standards/extensible business reporting language (IFRS/XBRL), and HR/talent. Brand Attributes Deloitte formal brand: The Standard of Excellence for our clients, our employees and the communities in which we serve Business led and IT-enabled solutions Value-driven relationships Deep industry sector expertise

19
Culture Traditions and heritage of the Deloitte partnership model talent matters and is the critical asset for the firm Strive for excellence Helping clients diagnose and solve their most-complex problems Trusted advisors (industry and microindustry perspectives and solutions) Deep industry insights to be trusted by and relevant to the C-suite Objective and solution agnostic Gartner Assessment Deloitte is uniquely positioned among global leaders in IT professional services as having maintained its one firm status as a heritage leader in tax/audit services with an independent professional services arm (consulting/advisory services). The breadth, depth and uniqueness of its consulting and advisory capability and related competencies set it apart in terms of experience and expertise on a global basis; complementing its IT skills, the firm also offers tax, audit and related consulting services, which it delivers globally. Furthermore, it is a private firm with a partnership model, which arguably gives it more flexibility in decision making on investments, depth of investment, and timing of investments. Deloitte has deliberately avoided investment in capitalintensive infrastructure outsourcing services (data centers). Yet, it cannot be considered conservative or risk averse in terms of its investments as a private company. Deloittes investments tie to its vision for the macroeconomic challenges that it believes its global clients must address, which include the following Economic uncertainty and financial restructuring Increasing role of government and regulation Rise of environmental and corporate social responsibility issues Demographic and talent trends Continued globalization and expanding markets The e-commerce revolution in information and technology. Deloitte has made some bold moves that it deems will deliver growth impact; for example, Deloitte continues to use acquisition for growth, and not necessarily only small/tuck-in acquisitions. In the past year, it invested more than $350 million to acquire the Leverage long-term client relationships for sustainable growth; invest in new client engagement model based on the Fujitsu heritage of customer centricity; promote orientation toward serving CIO objectives; and increase near-term focus of closely integrating employee with client. assets of BearingPoint (including BearingPoints North Americas public sector practice, Middle East Public Sector practice, and additional assets in Canada). Although this was a recent and notably sizable acquisition, Deloittes numerous targeted acquisitions have shored up unique capabilities in specialty areas such as analytics, security/privacy, risk, and sustainability. These deals, while smaller, are strategically important, because Deloitte gains specialization, which differentiates it in the market. In the area of global delivery, Deloitte acknowledges that client expectations for cost competitiveness necessitates that it have an offshore presence; while it is actively expanding its global delivery footprint, its aspirations for its global delivery strategy is to complement its value-based relationships not displace the hightouch labor component. Although it lags behind the other global IT professional services providers in the percentage of workers it has in its global model, it believes that its goals are unique, and it is not seeking to emulate the enormous scale of other leaders. As the market evolves toward cloud services, Deloitte is investing in its cloud capability and services partnerships; for example, Deloitte is one of salesforce.coms global partners. In the near term, the company is likely to play the role of assessing clients readiness for going from a traditional environment to cloud computing. However, Gartner also believes that client demand for repeatable solutions will accelerate, and is as yet an untapped growth opportunity for Deloitte. Although investments in cloud appear necessary to remain competitive, longer-term we see Deloitte best-positioned to capitalize on other critical technology innovations, such as analytics, that are squarely in the firms sweet spot, and to play a service aggregator role in services value chains, that capitalizes on Deloittes deep business insights and client relationships.

Fujitsu
Theme: Fujitsus future builds on a continuation of the strategy to move from a Japan-centric orientation to a global IT professional services provider by extending the deep customer-service heritage and sustainability objectives of its Japanese roots to all targeted regions. Strategic Position Consolidation of the IT-related subsidiaries outside of Japan to form the Fujitsu Global Business Group (GBG) which, alongside Fujitsu in Japan, aim to become a global service provider and deliver a more-consistent, full-spectrum of services and client experience around the world. Increase Fujitsus service revenue, margins, and brand recognition outside of Japan to support growth rates at industry levels; this aligns with the corporate goal to increase the percentage of business outside Japan.

20
Ambition to provide a full spectrum of services rooted in strong infrastructure capabilities in all regions; will leverage alliances to round out business services capabilities; and invest in cloud services to complement current infrastructure services. Strategic shift from defensive to offensive to grow client base, moving from predominantly protecting current base to aggressive pursuit of new client opportunities. Actively seeking growth in emerging markets (Brazil, Russia India and China, [BRIC]); will leverage Fujitsus product-based business to expand into professional services opportunities. Country-level focus may vary for some time. Key Investment Areas for Future Growth in IT Services Market Cloud computing: Fujitsu has a cloud platform in Japan that serves 30 clients (reports a pipeline of over 300 clients, half of which are established and half of which are potential new clients). Fujitsu also serves clients in the U.K. and some in Germany with cloud services, and is looking to make strategic alliances for the business process layer. Emerging markets: Expansion initially in the BRIC countries; It has stand-alone offshore centers in Russia and India (mainly serving application needs); a data center is being built in Southern China, which will be operational in 2011 and will support the regional Chinese government of Guangdong province. Vertical depth: There is a move toward aligning vertical offerings on a global basis; this changes a strategy in the past where solutions have been built and operated locally. Client engagement model: Replicate the customer service attributes of the Japanese culture across all regions. Selective acquisitions: Largely a tuck in acquisition strategy. Brand Attributes Responsive to client needs Genuine, based on customer service heritage (Japanese roots) Ambitious: Focus on clients success for sustainable growth Culture Japanese heritage of being close to clients and providing highlevel client service (fosters attitude that it is a privilege to serve and support). Focus on clients success: Employee engagement program emphasizes building a culture that promotes a consistent behavior toward clients and clients success. Local accountability: Local teams are empowered to make decisions quickly to adapt to client demands, confident that the organization will mobilize to deliver. Gartner Assessment In 2009, Fujitsu integrated three separate North America IT subsidiaries, creating Fujitsu America. The companys growth strategy in North America is based on increasing its coverage in the midsize and large enterprise segments, with improved integration of its platform and service offerings. Building on its existing experience with platform and application services, the company is investing in additional application managed services and infrastructure service capabilities. Also in 2009, Fujitsu moved into the No. 3 worldwide IT professional services market share leader position, displacing Accenture and proving the impact of Fujitsus consolidation strategy has been positive initially; continuation of this trend to grow market share will be an important measure of executing the integration. From a financial perspective, the company has returned to cash-flow positive, and is poised to grow 5% in 2010 and deliver operating margin expansion. While evolving toward a globally integrated service provider, Fujitsu has built its leadership position in Japan (the second-largest country in terms of IT professional services spending) which accounts for 62.5% of its revenue. However, given that Japan is likely to underperform other major geographies in the coming five years (five-year IT services CAGR of 1.5%) and Western Europe growth is threatened by continued near-term economic weakness (five-year IT services CAGR of 2.5%), Fujitsus growth objectives will necessitate a rebalancing of its portfolio to favor North America and emerging markets. One challenge for Fujitsu will be to fully integrate the different business units, especially platform products and services, as it has done in North America. Even in Japan, full integration under one strategy has not been achieved yet and with the global expansion this alignment will only become more complex. Recent upheaval in Fujitsus Japanese senior executive leadership is unsettling, but should not impact the overall corporate direction toward global expansion/integration. Global diversification of services leadership at the country/regional level in the past year will establish a strong platform to enable the successful execution of the companys services growth strategy. However, this period in the services market is marked by hyper-competition in mature markets and a gold rush in emerging markets. Fujitsus limited services experience and low brand awareness in targeted growth areas (geographical areas and vertical industries), and the overall Fujitsu brand associated with technology (versus services), will prove challenging in the early stages of execution. As such, investment in services sales/marketing activities, brand awareness and program management must accelerate immediately if Fujitsu is to win its fair share of business, and achieve its goals in professional services expansion.

HP Enterprise Services
Theme: HP Enterprise Services prioritizes market share growth and leadership in IT professional services post-integration of the EDS acquisition; the next stage of transformation to continue strategic investments in cost structure, ongoing closer alignment

21
with HP Technology directions and product set, and cross-selling of services into HP accounts. Strategic Position Services as integral to HP overall corporate growth and financial rigor: Technology plus services as a core HP customer value; HPs intent is to grow at, or above, market growth levels in all regions, in three main parts of its business, which are ITO, BPO and applications services. Accelerated competitiveness post EDS integration: Strategic investments to rearchitect HPs commercial data centers (for client delivery) to deliver more-cost-effective services and comply with the Converged Infrastructure blueprint HP applied to its own internal operations. Organic plus acquisitive growth: Will rely on a combination of large and tuck-in acquisitions to complement organic growth; although an acquisition the size of EDS is unusual, bold actions by HP cannot be ruled out given the companys acquisition history (neither can divestiture of nonstrategic or underperforming units). Aggressive actions to reposition HP Enterprise Services strategy: Service innovation, automation of service delivery, operating discipline, expansion of sales coverage capacity, and financial rigor are key underlying elements in HP Enterprise Services ongoing direction and growth strategy. Financial focus shifting from bottom line improvements (integration) to top-line growth: Expanding the HP Enterprise Services sales force with the explicit goal of increasing share of wallet in targeted existing and new clients; combination of large outsourcing deals (deals more than $100 million) and smaller services contracts to penetrate current base and new clients (270 new logos added since EDS acquisition). Excellence in automation and productivity: HPs ability to apply automation to services will be a key element in HPs competitiveness, both from a cost-competitive position in deal pursuit but in its internal cost structures (improve HPs services profitability operating model). Alliance strategy: A continuation of the EDS Agility Alliance, HP ES Agility Alliance develops key partners on the services side to offer end-to-end services and also to expand technologyrelated offerings/services; through joint go-to-market strategies and collaboration, HP expands offerings and geographic reach, and improves win rate success (HP Enterprise Services notes that greater than 70% of its strategic services relationships have an alliance component are used in these alliances). Example of alliances include PricewaterhouseCoopers, and KPMG (recent new service alliance partner) and technology alliances with SAP, Oracle, Microsoft, Alcatel Lucent and BT. Workforce actions: Continuation of both layoffs and strategic hiring actions to rebalance skills and to strengthen HP Enterprise Services competitive position and HP services brand. Alignment of services opportunity with HP technology business: Upsell and cross-sell across the HP client base, expand services to support HP technology. BestShore global delivery strategy: A continuation of the EDS BestShore model will be a critical aspect of HPs services competitiveness; 70,000 employees in HP ESs global delivery network (includes 14,000 employees from the Mphasis acquisition). Industry solutions: Strengthened focus on industry solutions, particularly in applications services business and BPO Broaden service delivery options: HP Enterprise Services will offer on (client) premises, remote, and cloud offerings. Expansion into cloud will occur through internal R&D, partnering and potentially through acquisition Key Investment Areas for Future Growth in IT Services Market Service delivery automation: Major focus on commercial data centers, announced $1 billion investment (June 2010) to consolidate and modernize HP commercial data centers (HP Converged Infrastructure), sales coverage expansion, and drive ongoing profits (restructuring charges to be taken over multiple years) HP service portfolio expansion: Increase HPs services competitiveness with broader HP portfolio Next generation services: specific focus in the areas of cloud (including private cloud infrastructure services) and desktop as a service Organization streamlining and management disciplines: Steps to consolidate and refine operations represent ongoing investments, to meet internal performance goals and customer objectives for cost-efficiency HP Agility Alliance: Alignment and expansion of alliance partners to bring more-robust and end-to-end service offerings Mergers and acquisitions: Strategic actions (sizeable or tuck-in) to fill key skill areas or round-out service portfolio complement alliance strategy Personnel investments in global delivery and sales: Will add an estimated 6,000 new employees in these areas, showing continued investments to globalize delivery and to increase HPs market reach/visibility, capitalize on strong pipelines and keep growth momentum

22
Brand Attributes Viability: Financial strength of HP and long-term viability of one of the worlds largest technology providers and global corporations Technology, innovation Customer service and client intimacy Integrity, commitment and collaboration Culture Client focus to build client loyalty Disciplined technologists Quality services, process excellence Partner well Operational discipline (tightly managed by a detail oriented and operationally grounded executive leadership team) In the past two years, HP took a bold move to advance its share of the global IT professional services market with the decision in 2008 to acquire EDS, the No. 2 services market share leader (at that time). Prior to the EDS acquisition, HP did not appear in the top 10 leadership ranking in IT professional services market, as its service revenue was skewed toward product support. Through the EDS acquisition, HP moved conclusively into the No. 2 position, displacing Accenture; and by adding its existing professional services revenue to EDS more than $20 billion in revenue, created a gap of approximately $5 billion between itself and Accenture. However, an acquisition of such a large company as EDS, with a strong culture and operating approach, required an aggressive plan. In the past two years, HP undertook workforce reduction and decisive steps to improve operational discipline a necessity to ensure acquisition success, and that a profitable business resulted. Yet the impact of the integration has been felt by employees on both sides, which is not surprising. HP Enterprise Services is evolving into the new organization that it will become; the EDS culture of the past is largely gone. In HPs view, the first phase of the EDS integration (consolidation into the Enterprise Services organizations) is over and it now will focus on the next phase of growth further investment for longterm return from standardizing and automating service operations, and leveraging its scale of operations globally. It believes that service automation will be a key element to enhance its competitiveness in both the near and long-term. In the next phase of growth of HPs professional services business, HP Enterprise Services will need to balance growth in outsourcing (EDS core client base) with other core infrastructure and applications services, as well as vertical solutions and nontraditional cloud-based offerings. From all appearances, HP will need to fill some gaps in high-end solutions, business consulting and industry skills through alliance partners or a strategic acquisition. HPs technology bias is an area that must be carefully approached by HP Enterprise Services sales; one of the oftenheard client concerns is that the technology-neutral position of EDS is now replaced with an HP-centric technology approach. Another area that must be carefully developed is HP Enterprise Services vertical strategy. Although EDS brought some pockets of vertical expertise, it is not clear how investments will be made to preserve and growth this expertise. The HP Enterprise Services organization allows regional leaders to make decisions regarding vertical strategies. Although regional variation is a reality for industry requirements, it will be critical for long-term success that HP Enterprise Services is able to ensure IP/solutions leverage and consistent practices globally; further, HP Enterprise Services will need to make important investments to become recognized for strong industry orientation.

HCL
Theme: HCL prioritizes aggressive sales actions and accelerating employee-first focus during the downturn generates increased internal and external satisfaction, and drives market share gains. Positioned to pursue both applications and infrastructure outsourcing; vertical-specific solutions; and leveraging recent acquisition to better penetrate the enterprise applications market. Strategic Position Convert existing clients to growth accounts: Maximize opportunity through more-sophisticated account management and sales acumen to gain greater wallet share of client spending and increase number of $50 million or more accounts; moving from project work to managed services. Strategic acquisitions for growth: Continue to expand business into new service offerings, emerging growth countries/ geographical areas, and increase scale via acquisitions; complement organic growth strategy. Focus on CIO office: Raising profile with the business decision makers to capitalize on IT investments. Vertical and regional growth initiatives: During the next three to five years, 80% of growth will come from noncore markets in terms of vertical (media, energy and utilities, public sector and healthcare), country markets Brazil, India, China, Middle East, Continental Europe) and client segmentation. Pursuit of larger deals: Retooling its sales force and expanding solution offerings to augment strength in application and infrastructure with BPO capabilities to capture a greater share of multiservice deals in the marketplace. Employee-first program: Empower the employee to own the client relationship to drive value based on increased accountability.

23
Focus on infrastructure offerings: Enhance solutions that are targeted for the midsize enterprise market in areas of remote infrastructure management. Key Investment Areas for Future Growth in IT Services Market Sales and marketing: Focus on improving the front office reach to the client: expanding the model to strengthen client reach and relationships, and developing the client partner role Branding initiative to focus on HCL differentiation: Building the HCL brand with ad agency Wieden & Kennedy; and generating brand awareness by leveraging third-party industry relationships to showcase the HCL story. Customer advisory council: Modeling the success in the U.S. to gain insight into HCLs business effectiveness; similar investments planned in Europe and Asia/Pacific to increase customer intimacy. Expanding global delivery: Building out scale and processes around the globe to support its multinational growth strategy; example areas of investment Brazil and Poland. R&D spending at the business unit level: Each line of business head is authorized to allocate up to 6% of its P&L to pursue opportunities. Leadership investment: Hiring local talent to raise value of services provided across various solution offerings. Managed services offering: Targeting sets of solutions to the SMB client segment, expanding its total addressable market. Nonlinear growth initiatives: Applying innovative modeling to expand repeatable solutions, particularly applicable at the infrastructure layer and longer-term at the application layer. Brand Attributes Employee-first: Formal internal program has enabled HCL to drive competitive advantage through stronger client relationships. Value-centricity Trust, transparency and flexibility Culture Entrepreneurship, passion and speed of response Empowered individuals who place the customer experience and satisfaction as their top goal and priority HCL was one of the fastest-growing IT services providers in 2009. Although the majority of its growth was through acquisitions, it, nevertheless, was one of the more-aggressive companies in terms of sales focus and outsourcing contract pursuit in the down economy. HCLs balanced portfolio in terms of vertical mix and service line mix (and, to a much lesser extent, regional mix) means it is not overly reliant on one revenue steam. This diversification was a prominent factor in it being able to ride the recession much better than many of its competitors, as well as putting it in good position for when the uptick arrives. HCL has also been successful in its pursuit of annuity outsourcing deals another factor that can positively impact the formation of long-term client relationships. HCL is targeting the emerging countries of Brazil, India, China, the Middle East, and the more-developed Western Europe countries as growth areas in the coming two to three years. European growth, however, has proven to be a particular challenge to HCL; as a target region for growth in the past, it has successfully penetrated the U.K. market. Future focus is to expand its French operations. HCLs increased work around branding will definitely aid this expansion within other Continental European countries, but key initiatives to build local presence, and a strengthened sales strategy will be required. Although HCL acknowledges that low brand awareness is one challenge, its aggressive posture on sales and account management and critical investments in its customer advisory council are positive signs that HCL is methodically addressing brand issues. Additionally, HCLs high focus on retaining satisfied clients and supporting the CIOs success are other strategic areas that will have positive long-term impact. Recognized as a strong-player in full-service and infrastructure outsourcing, it is positioned to take on relatively large outsourcing contracts (greater than $100 million) where it can also bring deep applications competencies for bundled ITO opportunities. Flat culture and open communication with upper management (Harvard Business School case study on HCLs culture) Gartner Assessment

Infosys
Theme: Infosys competitiveness emphasizes a shift from a lowcost alternative to global provider of transformational, operational, and innovative solutions, driven by investments in new offerings and vertical solutions capabilities, as well as creating a partner ecosystem. Strategic Position Portfolio of solutions: Equal focus on transformational deals, managing client operations, and new engagements models that increase growth, profitability and asset efficiency for clients; emphasis on value-driven results Creating new lines of business for revenue growth: Accelerating growth through additional service offerings, expanding geographic reach, and broadening vertical market expertise Nonlinear growth to increase profitability: Driven by platformbased solutions, IP-based offerings, pay-per-use models

24
Focus on client loyalty: Ninety-seven percent repeat business achieved through quality of delivery, service innovation, and value creation; focus on existing customers also drives profitability Partner ecosystem: Technology-agnostic with the ability to create best-of-breed partnerships to increase relevance with clients Global delivery model: Providing best value remains core tenet; management of on-site/offshore mix core to business model and operating profit performance Talent acquisition: Continue to leverage brand name recognition in India to attract high-quality talent; creating mind share in new geographies to replicate talent acquisition model Key Investment Areas for Future Growth in IT Services Market Strengthen sales acumen: Hiring client partners to improve opportunity to further penetrate customer relationships; local hiring to boost capabilities in new regions Intellectual assets: Align talent management activities with client priorities, business model, and employee aspirations Nonlinear growth through new engagement models: Building offerings and capabilities in areas such as cloud computing, ticket-based maintenance, SaaS and platform-based solutions (based on enterprise software, such as SAP, Oracle, Sterling Commerce, Tibco, and Documentum); examples of industry-specific solutions include telecom (Flypp), healthcare (iTransform) consumer and packaged goods (supply chain visibility) Alternate shore expansion and penetration in emerging markets: Expanding into Australia, China, Brazil, Mexico, Czech Republic, and the Middle East; investments delivery standards, brand recognition through a mix of local and India-based talent; areas represent delivery diversification as well as revenue opportunities Global delivery expansion: Selective expansion into alternateshoring models, including China, eastern Europe (specifically the Czech Republic), Brazil and Mexico to support its revenue growth targets New vertical markets: Establishing U.S. subsidiary in Washington, D.C., to penetrate the public services market, an area that was once considered insulated from India-based competition Brand Attributes Trusted partner: Driven by transparency and integrity, ensuring delivery predictability, execution excellence, domain knowledge, and enduring relationships Thought leadership: Management plays an integral role in the shaping of its employees, the organization, the industry as well as spreading global awareness of India Focus on earning respect: Success is measured by the ability to understand clients businesses, investing in talent and creating a meritocracy to maintain high standards of delivery and promote a flat organization driven by ideation Metrics-driven environment: Although it is a company that promotes a hierarchy of ideas, its metrics are driven by delivery, financial results, talent management and sustainability Giving back to society; taking care of the environment Gartner Assessment Infosys has been a pioneer of the global delivery model, shaping industry standards through thought leadership, government influence, and increasing awareness worldwide. The Infosys value proposition is in a transition period. The company lost footing in 2009, underperforming many in its comparable peer group in terms of revenue growth. One of the challenges for Infosys is maintaining its margins while continuing to invest in growth. Although challenged in 2009 due to macroeconomic factors, the company added 27,000 employees and grew its strategic account base. Coming out of the downturn, Infosys has stepped up its investments in three important trends: new business models that drive efficiency; new solutions that drive competitive differentiation; and creating value-based solutions. The underlying theme across all investment areas is a shift toward nonlinear growth and higher leverage. Our research indicates that profitability under new engagement models, such as ticket-based pricing, can be substantially higher than the full-time-equivalent model. Although it is only a small percentage of revenue today, the profits are offsetting headwinds such as wage inflation, rupee appreciation and limited price increases. In the longer term, however, as these models reach Infosys targeted 33% of revenue, operating margins could expand from current levels. Not all the profits will flow to the Transparency and strong corporate governance: Provide insight on delivery model, financial data for its employees, shareholders and clients Predictability: Outcome-driven results based on rigorous methodologies and processes drives customer satisfaction; industry-leading operating margins Global partner: Business spreads across global geographies and economies with a target of reaching revenue diversification of 40:40:20 among U.S., Europe, the rest of the world, respectively, over the long term Quality, service innovation, and value creation: drives almost 100% repeat business, improving revenue visibility Culture

25
bottom line; Gartner believes that clients will eventually demand some cost-benefit sharing. Infosys is well-positioned going into the recovery from a risk management perspective. The company has established a process of monitoring, reviewing and approving risk on a quarterly basis. This model was tested during the last business cycle, and its success can be measured by its ability to reduce accounts receivable, manage credit worthiness of its clients, and establishing short-term currency risk hedging strategies. Its challenge will be in accelerating growth ahead of its peers that arguably invested more heavily over the last 12 to 18 months and seem to have more momentum coming into this year. As evidence of the momentum Infosys is experiencing and the overall health of the market, the company raised its guidance for full-year revenue growth from 16% to 18% in April to 19% to 21% in July for fiscal 2011. An important theme in Infosys future is its ability to create a partner ecosystem to position itself at the core of the changing models in IT services, as well as the convergence of technology trends. In the traditional environment, the company benefited from being technology-agnostic, delivering based on clients business and IT needs. Infosys is placing bets now on key providers of the infrastructure and application layers to deliver more-standardized automated solutions, on top of which the company can layer its business process expertise. It is at the business process layer that external service providers will drive a competitive advantage for its clients and where the companies are likely to drive the most attractive margins. Profitable revenue growth: Changes in internal process to lower costs in services business and greater leverage of IP-based assets and global talent pool contribute to IBM corporate profit margin goals Asset reuse: Industrialization initiatives in IT services applies to technology assets and IP assets, such as vertical solutions that will enable outcome-based solutions and speed to value for IBM clients Cross-business leverage: Integrate internal best practices for applying key skills, learning, and solutions from one IBM business unit (GBS, GTS, IBM Research, Software Group (SWG), Systems and Technology Group (STG), and Global Finance) or vertical area to another for increased efficiency and predictability for clients (Smarter Planet, asset leverage, identify new applications of technologies and solutions). Applying domain expertise in an industry context: Taking technology-driven skills/data and applying it to clients business processes; focus on vertically driven competency (nine priority industries for Smarter Planet) and domain expertise (business analytics, SAP and change management). Define next generation of global delivery for IBM differentiation: Will continue to expand percentage of revenue delivered through global delivery model, but emphasis will be on globally aligned and optimized capabilities, resources, and centers of competence. By 2015, more than 50% of GTS professionals will work in a global delivery center; in GBS, more than 60% of practitioners will work in delivery centers (Source: IBM Investor Day, May 2010). Acquisitive growth: Target acquisitions for key solutions/ skills/or vertical expertise (public sector analytics via National Interest Security Company, and customer management analytic capabilities via RedPill). Key Investment Areas for Future Growth in IT Services Market Repeatable asset-based solutions: Leverage IP and solutions to client base Vertical competency/solutions: Deeper industry insights, and specialized industry solutions (example, Smart Retail, Intelligent Transportation) Smarter Planet: IBM corporatewide investments, marketing, branding initiatives in verticalized solutions for services (as well as smarter delivery models and just-in-time delivery capabilities) Acquisitive growth: Targeted acquisitions for skills in business analytics and optimization (particularly in GBS) and rollout of analytics solutions centers globally

IBM Global Services

Theme: IBM Global Services theme is that of a globally integrated enterprise with common processes, focused on profitable growth through discipline in operating practices, global workforce, a broad services portfolio, asset (IP) reuse, expansion in targeted growth markets, analytics, cloud, industry-specific solutions and leadership in next generation services through its Smarter Planet agenda. Strategic Position Innovation through R&D: Leverage IBM Research to focus on developing new types of assets, researching new models and other innovation that can be used to provide differentiated business outcomes to clients; leverage, efficiency and/or change the customer experience Global integration: IBM promotes its common processes, tools, and methodologies across GBS and GTS; a top initiative for IBM today and the future to ensure services common practices for global leverage Market share leadership: Through a portfolio that includes core/existing service lines (GBS and GTS), new business opportunities (Smarter Planet, Cloud, Business Analytics and Optimization), innovation in offerings that command a premium price, and leverageable/standardized solutions that may serve niche markets or particular service categories

26
Next-generation data center/cloud services, platform services, cloud test Global expansion: Key target will be the growth markets (BRICs and other selected countries business intelligence); analytics for its own internal (business) operations (BI 4 IBM business); to improve IBM performance, sales, and so forth Market analysis: IBM-funded primary research studies such as CFO and CEO surveys provide IBM with insights on its clients/ prospects Brand Attributes Market share leadership position across service lines and all regions (except Japan) Premium service provider status; quality services and solutions in an industry context Global brand: global stature and reach, globally trusted brand Deep technical roots, funding innovative solutions led by IBM R&D Viability: IBM as a financially secure and reliable global brand Sales and marketing prowess; cohesive messaging Take on broad global issues with societal impact Culture Formal IBM values: Dedication to every clients success; innovation that matters to our company and to the world; trust and personal responsibility in all relationships High caliber of services professionals and leaders/managers Committed to innovation that delivers business outcomes for clients Local presence, combined with global operations Hierarchical corporate structure Community relationships: Charitable donations and employees time, IBM Peace Corps Sustainability: Making IBM operations green Gartner Assessment As the global market share leader in IT professional services, expect IBM to continue to be a strong competitor in all sectors and service lines. IBM Global Services is focused on retaining its strong leadership position in services, contributing to demanding corporate financial goals, and still creating mind share as an innovator in the service market. Although IBMs market share is less than 10% of the total IT professional services market, its position is almost double that of its nearest competitor (HP Enterprise Services) and 2.5 times larger than the combined revenue of the top five India-based market leaders. However, this position of leadership comes with challenges, as the industry undergoes major shifts toward globalization of labor, standardization of solutions and industrialization of services consumption each of which introduces some degree of commoditization, pricing pressure, and competitive alternatives causing varying degrees of downward pressure on revenue growth as well as opportunities. As such, IBM has been focused on pursuit of profitability and has been at the forefront of building capabilities to meet these trends. Although acquisitions will be an avenue to revenue expansion in the next few years, profits will come from continued discipline to reduce the cost of operations, leveraged resources, and solutions innovation that create business value, such as business analytics and optimization and industry-specific solutions. IBM was one of the early service providers to look at services as reusable assets, and invest in productizing these assets in its portfolio. IBM must continuously balance and rebalance a portfolio of service business that has high portions of labor-intensive work (traditional outsourcing) with its goals to be the leader in cloudbased offerings. IBMs commitment to cloud-based offerings and industrialized solutions is promising, and with many cloud-based product announcements in the past 18 months, its potential to capture mind share is attractive. IBM will need to move aggressively to promote cloud services in the coming year to capitalize on its position as a dominant force in the future services market across all layers of the stack: infrastructure, applications, and business process. Other important growth opportunities for IBMs service business will be to leverage its global delivery network as a means to adjust labor costs and continue to deliver cost-competitive services, capitalize on the full extent of industry insight that resides across the IBM organization, business analytics and optimization, and also tap into the IP that resides in the software business to capture client knowledge and evolve repeatable industry solutions. Lastly, the corporate initiative Smarter Planet is an example of how IBM brings multiple business units together (services, systems, and software) for the collective impact of IBMs innovation in solutions and over-arching global brand value in an industry context that is most relevant to clients.

TCS
Theme: TCS strategic intent for growth will focus on shifting from a reactive approach to meeting clients requirements for low-cost solutions toward adapting a portfolio of solutions that explore and exploit emerging IT services trends; this will be core to its future objectives to drive global market share leadership. Increased investments in people, emerging business models, and marketing and branding support TCS goal of maintaining its success in establishing market share leadership among India-based providers.

27
Strategic Position Globally integrated approach to customer intimacy: Continue to build out industry expertise across 18 autonomous business units to foster customer intimacy and ensure agility; business units are integrated to promote consistency of service offering with globally standardized solutions. Shift brand to value: Revitalize brand recognition with new customers and expand awareness with existing customers beyond its moniker as a low-cost solution provider. Moving up the value chain: Build out higher-touch consulting services to augment core solution offerings; hiring new talent to establish business-led relationships and domain expertise. End-to-end solutions: Augment application heritage solution offering with infrastructure outsourcing, laying the groundwork for a knowledge base that is necessary to compete in cloud computing. Redefining service portfolio: Build out leverageable service offering around asset reusability, platform BPO and IT as a service. Solutions are packaged by vertical industry, such as financial services, government, retail, telecom and life sciences, built around highly standardized business processes, and targeted toward not only enterprise customers, but also the SMB markets. Driving innovation: To stimulate innovation, employees are motivated to create new concepts and service lines. Provide incentives for nonlinear solution development: Establish new investment targets and metrics to align revenue growth goals for alternative delivery models. Shift toward nonlinear revenue drives higher profits: Profitability of new nonlinear revenue is substantially higher than the corporate average. Although it is currently just a small percentage, new revenue profits are offsetting headwinds, such as wage inflation, rupee appreciation and pricing pressure. As higher profit revenue expands to 10% or more of the revenue mix, average corporate operating margins should expand commensurately. Flexibility conducive to changing business cycles: Manage growth through prosperous periods as well as difficult economic times by creating diversified solution offering, geographic distribution, and balancing investments. Expansion of global footprint: TCS global network delivery model continues to expand and support its goal of geographic diversification into South America, China, and Eastern Europe. Key Investment Areas for Future Growth in IT Services Market Expand branding and marketing strategy HR; opportunistic hiring during the downturn; diversity in employee base Geographic distribution: Building out delivery and sales centers globally; expanding in emerging markets of as Latin America, Asia/Pacific, Eastern Europe and Africa Productized solutions, consultative solutions Strategic acquisitions: CGSL, FNS, CMC, TIL, Pearl Group and Comicron Educating internally around initiatives that include improved branding, marketing and a more focused value-proposition in campaign management analysis now with plans for launch in nine to 12 months Global network delivery model to create a standardized, consistent solution offering to drive better execution and increased certainty from the customer experience Innovation: Three percent of overall revenue in R&D activities; included here are emerging business models, cloud services Brand Attributes Experience certainty Customer-centric organization; delivery on time-on budget; one global service standard Trusted provider: Focus on needs of clients Delivering quality of experience; increased transparency in client relationships and metrics Innovation and transformation Embodies the Tata brand promise: Leadership with trust Employee-centric model: Asserting that employee is the way to deliver quality of service. Agile and anticipatory of market changes Culture India culture: Focus on needs of those around you; leadership with trust; organization based on core Indian values of customer-centricity that transcend delivery globally

28
High performance; effective work practices; process-oriented expertise Innovation is in DNA Workforce diversity Organization and learning Gartner Assessment TCS is in a position of market share leadership as the largest Indiabased IT professional services organization. In 2008, the company recognized the challenges of the law of the large numbers and the need to ensure its agility in a highly fragmented marketplace. In response, TCS made strategic investments to redefine, revitalize, and reorganize its company around new branding initiatives, vertical expertise and customer-centric values that are standardized on a global platform. Further, there has been a noticeable shift in the companys more-active approach toward innovation and future vision versus its historical position as a low-cost provider reacting to market demands to do more with less. Recognizing the demand for bundled solutions and client demand to contain IT costs, TCS expanded its application heritage into infrastructure outsourcing. Its end-to-end solution offering increased its ability to capture a greater share of the larger outsourcing deals in the marketplace. The momentum gives TCS a competitive advantage in the area of mega deals in comparison to its peers, as evidenced by contract signings. Furthermore, its globally standardized solutions and innovative approach to delivery have resulted in attractive profits on deals from which other vendors continue to shy away. TCS market share gains have slowed over the past two years, faced with the law of larger numbers at $5.4 billion in revenue as of calendar 2009. Its investments in people, emerging business models, and marketing/branding are critical to TCS ability to maintain its position as the leading India-based provider. In terms of profitability, new nonlinear revenue can be substantially higher than TCS current corporate operating profit levels. Although it is a small percentage of the mix, new revenue profits are offsetting headwinds, such as wage inflation, rupee appreciation and pricing pressure. As higher profit revenue expands to 10% or more of the revenue mix, average operating margins should expand commensurately. Lastly, TCS envisions itself as a global market share leader. Although impressed by its ability to penetrate the top 25 list of professional IT services providers (the only India-based company in that tier), moving to the next tier may be driven by a large acquisition or several smaller deals that augment organic growth. Notably, growth strategies in the IT services industry based on consolidation have not driven attractive returns potentially creating a challenge for TCS.

Wipro
Theme: Wipros future as a multinational service provider status builds on a background of its Indian heritage in application services; BPO expansion and increased solution-oriented approach, resulting in greater emphasis on creating and enhancing business value for clients defines its goals. Strategic Position Innovation and R&D: Core to Wipros strategy is innovation in business models and technologies (cloud and virtualization, mobility, collaboration, social computing, sustainability, and analytics and security); innovation focus emphasizes increased collaboration, both within customers enterprises as well as with their clients. Client engagement program for strategic (large) accounts: Wipros revenue growth model is designed to drive a higher share of wallet in client organizations by providing system integration and transformation-led services, which are long term and predictable in nature. The client engagement model (CEM) relies on domain and consulting skills. Integrated services portfolio: Wipro goes to market with an integrated service portfolio encompassing consulting services, IT services, BPO and engineering. Increased emphasis on consulting, developing stronger client relationships, driving business impact, as well as delivering services that demonstrate the business value of IT. Leverage expertise in infrastructure outsourcing to evolve into cloud services: Pursuing cloud sourcing strategy in areas of remote management, virtualization; using cloud services strategy internally to provision for services as means of reducing time to market for its clients and reduce costs. Large deal pursuit: Expanding focus on large deals that will require stronger differentiation against global providers; evidence of this success is shown in winning large deals against large global competitors. Global expansion through established client relationships: Leverage relationships with large accounts in developed geographies and expand into emerging geographies based on clients needs; recent successes include expansion into Africa through existing relationship with large European telecom provider. Key Investment Areas for Future Growth in IT Services Market Intellectual assets: Over the past 12 months Wipro has focused on building domain strength and functional expertise, as well as hiring senior level sales/account managers who are integral to forming deeper client relationships; Wipro has hired 30 partnerlevel consultants in the past six months.

29
Sales and marketing: Hiring senior-level expertise to build stronger relationship with strategic accounts; client engagement program is about developing stronger client understanding, business alignment and consultative selling. Productized solutions: Architecting and productizing domain, platform and integrated technology and product engineering solutions. The goal is for solutions to solve a clearly defined business problem and should be repeatable and more than 70% reusable; an example would be The Digital Customer Experience (DCxP) platform, which helps retailers to manage e-commerce operations and integrates various mediums of customer experiences; currently nonlinear revenue represents roughly 10% of revenue with attractive operating margins. Global, but local, workforce: Trying to increase its number of local employees, in particular in the U.S., China and Latin America to improve continuity of delivery and increase connection with local markets. Service delivery via alternate models: Creating a dedicated organization to commercialize solutions around emerging technologies such as cloud, sustainability, mobility, social computing, collaboration, information management (including analytics) & security; investments are mapped toward increasing nonlinear delivery by building IPs frameworks, accelerators and differentiated services such as IDAM in a box and ISDPS for retail. Strategic acquisitions: Building on its history of filling gaps (string of pearls acquisition strategy) in solution offerings; enhancing domain & technology competence; expanding service line portfolio or expansion into new geographies. Alliance partnerships: Continued investment in alliances with five strategic alliance partners (SAP, Oracle, Microsoft, Cisco and EMC) toward delivering enhanced customer proposition through co-innovation and co-creation of solutions. Brand Attributes Adaptability and agility Customer-centricity Focus on process, consistency, delivery and quality Culture Core tenets: Key elements of trust, transformation, business value and innovation. Company specific spirit of Wipro logo: Aims to communicate innovation, energy, and the multifaceted nature of the organization. Ability to work collaboratively and co-innovate in an ecosystem of partners, customers, and/or competitors to create flexibility, productivity and financial performance to drive success. Performance-driven culture (performance rating linked to salary, promotion and career movement). Process excellence Gartner Assessment Wipro has grown to become a top 30 global IT professional services provider, with a 2009 growth rate of 9% on revenue of $3.8 billion. To a degree, the companys outperformance in comparison with some of its peers was driven by its full-service offering from applications to infrastructure and BPO. It is one of the more-acquiring companies among the Indian providers, having made a number of small acquisitions in EMEA and the notable acquisition of Infocrossing in the U.S. This experience of integrating acquisitions into its business will be of paramount importance in it achieving its goal of becoming a truly global company. Within Western Europe, Wipros strongest presence is in the U.K. Its strategic goals are to expand into other countries, which will be achieved through a combination of organic expansion and also through targeted acquisitions. Potential countries to strengthen presence would be the Nordics or the Netherlands, due to their similarity in culture to the U.K., where Wipro already has sizeable revenue streams and the experience of servicing U.K. clients. Although Germany is the second-largest IT professional services market in Western Europe, cultural issues will make penetration into this country more challenging. For true global coverage, expanding its revenue from Asia/Pacific will also be required; Wipro will need to replicate its success in its home market, India, the Middle East, and other Asia/Pacific countries. The company has gained traction in Australia with the transformational deal with Origin Energy and more recent wins in the Australian education sector. Wipro is committed to building a nonlinear stream of revenue. Wipro plans to accomplish service delivery optimization by leveraging assets it develops and acquires, such as ownership of proprietary software solutions and reusable frameworks, standardizing solution offerings, and system integration through a lean approach. Wipros focus is not on incrementally hiring more people, but rather on driving growth from investing in tools, frameworks and shared service models. Roughly 10% of Wipros revenue comes from nonlinear initiatives, and its goal is to double this in the next 18 to 24 months. This strategy will also enable margin expansion balanced with revenue growth. One of the challenges Wipro continues to confront is lack of differentiation versus its Indian peer competition and a clearly defined global brand. Additional investments in marketing will be essential to maximize growth in the coming two to three years; the ability to clearly articulate its strategy through sales and marketing programs must be prioritized. Investments and new leadership in sales and marketing are making a difference, but it is still too soon to gauge the level of long-term success the investments may drive in terms of revenue outperformance. Greater visibility of Wipros co-CEOs in clarifying Wipros value to clients will raise awareness of the Wipro brand.