Transcript Keeping the promise

Analyst Meet
August 27, 2002
“Living up to the promise”
Challenges in the European market
Srinjay Sengupta
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Agenda
1.
2.
3.
4.
The Market In Europe
Infosys Europe Performance
Key clients
Europe : Investment For growth
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
The Europe IT services market
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Total market size is $158B and CAGR is 7%
The UK is the largest IT market in Europe.
3 countries contribute to 60% of the European market
Others’ comprises multiple countries including Spain,
Italy, Finland, Denmark, Portugal, Greece
Europe- Areawise IT Market (2002)
Others
23%
Sw itzerland
3%
Sw eden
4%
BENELUX
10%
UK
26%
France
15%
Germany
19%
Source : Gartner
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Europe market - Segments
Europe- Segments (2002)
Biz Process Mgt
16%
IT Management
23%
Hardw are
Maintenance
Softw are
13%
Maintenance
7%
Consulting
8%
Education &
Training
Development &
3%
Integration
30%
Europe IT Services-Segm ent Grow th ($ MM)
200,000.0
Biz Process Mgt
IT Management
150,000.0
Development & Integration
100,000.0
Education & Training
Consulting
50,000.0
Softw are Maintenance
0.0
2001
2002
2003
2004
2005
Hardw are Maintenance
Source : Gartner
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
United Kingdom - market
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$39B market – CAGR of 7.4%. IT services market closely tracks the US
UK economy is one of the better performing European economies. GDP
growth average of 2.5% per annum since 2000
US and Indian companies view UK as a springboard into Europe. Financial
services/ public sector/ utilities and manufacturing are large sectors
Large number of redundancies announced in the market during 2001
continues
Application outsourcing and BPO are large growth areas
UK IT Services market ($ MM)
50,000.0
Biz Process Mgt
40,000.0
IT Management
30,000.0
Development & Integration
Education & Training
20,000.0
Consulting
10,000.0
Softw are Maintenance
0.0
Hardw are Maintenance
2001
2002
2003
2004
2005
Source : Gartner
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Germany - market
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$27B market – CAGR of 5.9%.
German economy slowed down since 2000. Manufacturing, public
sector and financial services are big sectors
Offshore is becoming more accepted including Eastern Europe
suppliers. Language is a challenge.
Applications outsourcing and BPO are large growth areas
Germany IT Services market ($ MM)
35,000.0
30,000.0
25,000.0
Biz Process Mgt
IT Management
Development & Integration
20,000.0
15,000.0
10,000.0
Education & Training
Consulting
5,000.0
0.0
Softw are Maintenance
2001
2002
2003
2004
2005
Hardw are Maintenance
Source : Gartner
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
France - market
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$22B market – CAGR of 5%.
GDP growth has been relatively strong. Expected to grow 2.5%+ in 2002
Outsourcing rates in France are among the lowest in the large Western
European economies.
Biggest challenge is to overcome language and cultural barriers
As with UK and Germany, applications and BP outsourcing are large growth
areas.
France IT Services market ($ MM)
30,000.0
Biz Process Mgt
25,000.0
IT Management
20,000.0
Development & Integration
15,000.0
Education & Training
10,000.0
Consulting
5,000.0
Softw are Maintenance
0.0
2001
2002
2003
2004
2005
Hardw are Maintenance
Source : Gartner
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
State of the Market
Overall
■ The economic downturn has led to sluggish growths in the IT service market since H2
2001
■ Consulting and systems integration (CSI) has been the worst affected. Spending has
shifted from e-com capabilities to CRM, application integration and ERP consolidation.
Multiple vendor redundancies in this area
■ The network IT services market has had mixed results. Software maintenance and
support is a high growth area as also IT security services (post Sept. 11). Telco
operators are also investing heavily in customer care, billing and mobile infrastructure.
Financial stability is an important criterion for vendor selection
■ IT outsourcing and BP outsourcing are the fastest growing sectors in Europe. Some of
the key drivers are cost reduction, focus on core competencies, process improvement
and access to new technologies. To win, vendors need to demonstrate capabilities,
relationship models and flexible engagement structures. Offshore vendors have the
strongest play in this area.
■ Alliances and partnerships are becoming increasingly important in service provisioning
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Market : Trends in Europe
Pricing
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Market pricing continues to be under pressure especially in large
outsourcing deals
Largely driven by need to burn the bench and utilize excess capacity
Due to better access to people, in-sourcing has started to become an
attractive sourcing option
Other Market Information
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Decision cycles continue to be significantly longer than before
Offshore sourcing is gradually becoming a strategic choice for clients
Many outsourcing decisions run into roadblocks because of tough labour
laws. Vendors need to demonstrate the capability of hiring people from
client companies to overcome this roadblock
BPO is fast becoming a focus area especially in UK and Germany
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
“Living up to the promise”
Infosys in Europe
How Infosys has fared in Europe
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Infosys in Europe : increasing share of company
revenues…
Financial
Year
Europe
Revenue
(USD mn)
Infosys total
Revenue
(USD mn)
Europe
Revenue as
a % of total
2001-2002
106.10
545.05
19.5
2000-2001
77.88
413.85
18.8
1999-2000
30.07
203.45
14.8
1998-1999
11.32
120.96
9.4
Revenues from Europe for Infosys has crossed $100 Million for the year 2002.
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Europe Key Clients : Banks, financial services, and insurance
(A mix of global as well as regional and national players)
European operations of global corporations
European multi-nationals as well large pan-European corporations
Regional and national banks and financial institutions
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Europe Key Clients : Retail and manufacturing
The best brands and leaders in engineering
Retail & Distribution
Heavy Engineering
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Europe Key Clients : Hi-tech, telecom, energy, and utility companies
Systems and equipment manufacturers, and service providers
Hi-tech Manufacturing
Telecom and Information Technology
Energy and utilities
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Infosys Europe : Investing for Growth
$11.32m
1999
265%
Germany Office
Business development investment
Large expansion in local delivery team
Expansion in consultants
Paris office established
Expansion of BDM team
Local marketing activity
France Office
Benelux Office
New office in Holland
Country Manager Appointed
Expanding sales and delivery teams
Nordic Office
New office in Sweden
Expanding BDM team
Swiss Office
New country sales team
Marketing activities
New business
$30.07m
2000
© 2002 Infosys Technologies Limited
258%
$77.88m
2001
139%
$106.10m
2002
Growth
Infosys first
Established in
Europe, UK
UK Office
Acquisition (IQ Financial Systems)
Business development investment
Industry focus
Regional Manager
$$$.$$m
2003
Analyst Meet
August 27, 2002
Investing for Growth : Specific go-to-market Solutions
Go-to-market : ISIN Conversion
From 22 April 2003, the six digit numeric Wertpapierkennnummer
(WKN) currently used in Germany to uniquely identify securities is
being replaced by the new International Securities Identification
Number (ISIN), a 12 digit alphanumeric code. German banks need to
transition all relevant IT systems to the new standards.
Infosys has introduced its Security Number Conversion Services
which can ensure total ISIN/alpha-WKN compliance before April 2003,
in synchronization with system enhancements and business
demands.
Go-to-market : BASEL II Solution (Europe)
Infosys has introduced its Basel II service and has won its first Basel II
client
Go to Market : Public Sector Services
S-Cat Empanelment, NHS projects
© 2002 Infosys Technologies Limited
Client win
BHF Bank
Analyst Meet
August 27, 2002
Investing for Growth : Europe focused marketing
Wharton Infosys Business Transformation Award (WIBTA) – France Paris, May 16, 2002.
recognizes organizations that have transformed their business or industry through the creative application of technology.
All Global 2000 companies are eligible to be considered for this Award. Awards will be based on the level of innovation,
thought leadership and transformational results represented by the entry and will be presented in May 2002. The winners
will receive a trophy and certificate of honor.
Winners based in Europe and Rest of the World recognized at a special ceremony during a gala dinner at
Chateau de Versailles, as part of the Wharton-INSEAD Economic Forum 2002 in Paris on May 16. (Capital One,
National Stock Exchange of India, GreenPoint Mortgage, Schlumberger, Warren Lieberfarb of Warner Home Video and
Takeshi Natsuno of NTT DoCoMo win the inaugural Awards)
Milan in Europe – Monte Carlo, November 7-9, 2002.
Infosys flagship customer relationship event will be held at MonteCarlo
Key clients and prospects will be invited to this three day meet, which will be the flagship event in Europe marketing
Europe Leaders visit Infosys
Tony Blair was an honored guest at Infosys, Bangalore
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
Europe continues to be a growth Engine for Infosys!
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8 office locations with state of the art networks and systems
2000+ global delivery consultants focused on Europe
European Alliance Program established
European Regional Marketing established
The Infosys Global Delivery Model (GDM) available across all
European regions to deliver and support any requirement in any
country
© 2002 Infosys Technologies Limited
Analyst Meet
August 27, 2002
“Living up to the promise”
Thank You
© 2002 Infosys Technologies Limited