3rd Quarter 2010 TPI Index

0 The TPI Index An Informed View of the State of the Global Commercial Outsourcing Market Third Quarter 2010 October 21, 2010 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved. No part of this document may be reproduced in any form or by any electronic or mechanical means,Technology Partners International, retrievalRights Reserved Copyright © 2010, including information storage and Inc. All devices or systems, without prior written permission from Technology Partners International, Inc.

1 Welcome Presenters on today’s call. John Keppel Partner & Managing Director, TPI Research, Analytics and Intelligence, TPI Tom Lang Partner & Managing Director, Industry Verticals and CIO Services, TPI Americas Duncan Aitchison Partner & President, TPI EMEA Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

2 An Informed View Insights into the state of the global commercial outsourcing market Host Cowen & Company – Moshe Katri. 32st Quarterly Insights on commercial outsourcing contracts valued at >$25M. TPI Index Focus on both 3Q10 and YTD trends and comparisons. A weak 3Q10 pushed YTD comparisons into negative territory. Highlights Contract restructurings are leading the way for 2010. TPI Index Summary of the market indicators. Format Analysts invited to ask questions during the Q&A session. For More Slides are available at www.tpi.net. Information Continue the discussion at www.considerthesourceblog.com. Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

3 3Q10 and YTD Headlines A pause in the market recovery has dampened year-to-date momentum. 3Q10 3Q10 Category 3Q10 TCV 2010 YTD 2010 YTD Q/Q Y/Y (based on TCV) ($B) TCV ($B) Growth Growth Growth Global Broader 14.1 -21% -24% 55.0 -4% Market Restructurings 6.8 90% 69% 18.9 56% New Scope 7.3 -48% -50% 36.1 -20% ITO 10.1 -14% -24% 41.2 0.3% BPO 4.0 -34% -26% 13.8 -15% Americas 5.6 -42% -32% 27.5 17% EMEA 6.4 -8% -10% 23.0 -8% Asia-Pacific 2.1 97% -38% 4.5 -49% ■ 3Q10 was weak but data and service provider feedback suggest that a more active 4Q10 is underway. Restructurings include renegotiations, renewals, extensions Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

4 Industrywide Contract Award Trends TCV has declined quarter on quarter. Industrywide Contracts with TCV > $25M: Quarterly Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 35 250 28 200 The third quarter was 21 150 weaker by 14 25.4 30.2 100 both Q/Q and Y/Y. 21.7 23.3 20.8 23.3 17.1 17.9 18.6 17.7 7 14.1 50 0 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Industrywide Contracts with TCV > $25M: 3Q Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts Third quarter TCV results 30 200 25 were similar to 2007 levels. 150 20 15 100 10 18.2 19.2 21.3 21.1 19.6 18.6 15.1 14.1 17.1 14.1 50 5 13.0 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

5 Industrywide Contract Award Trends Restructuring activity was high in the third quarter, up 90% Q/Q and 69% Y/Y. Industrywide Restructuring Contracts with TCV > $25M: Quarterly Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 10 60 3Q10 follows strong 8 6 40 1Q10 restructuring 4 8.6 quarter. 6.3 6.9 6.4 6.8 20 4.6 5.0 2 3.1 4.0 3.6 2.7 0 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Industrywide Restructuring Contracts with TCV > $25M: YTD Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts Six of this year’s nine mega- 25 120 100 deals are restructurings. 20 80 15 60 10 18.3 19.2 18.9 40 12.8 11.5 13.6 12.1 5 9.4 9.8 20 6.8 5.4 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mega Deal: a contract with TCV of $1B+ Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

6 Industrywide Contract Award Trends New scope TCV in 3Q10 is down significantly – about 50% Q/Q and Y/Y. Industrywide New Scope Contracts with TCV > $25M: Quarterly Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 30 250 25 New scope TCV 200 20 150 continues downward 15 23.7 100 quarterly trend since 10 19.0 19.1 5 12.5 16.4 14.8 15.8 14.6 14.7 14.1 50 4Q09. 7.3 0 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Industrywide New Scope Contracts with TCV > $25M: YTD Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts New scope TCV has not 75 500 been at this low level in 60 400 more than a decade. 45 300 30 60.9 58.3 200 46.3 53.1 48.5 50.5 41.2 41.5 43.7 45.2 15 36.1 100 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

7 Industrywide ITO Contract Award Trends Just over $10B was awarded in 3Q10, down by almost 14% Q/Q and 23% Y/Y. Industrywide ITO Contracts with TCV > $25M: Quarterly Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 25 200 ITO TCV has been on 20 160 15 120 a steady Q/Q 10 22.8 19.4 80 decline since 17.0 15.9 5 13.6 11.2 13.6 12.0 13.2 11.7 10.1 40 4Q09. 0 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Industrywide ITO Contracts with TCV > $25M: YTD Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts Consistent ITO 60 400 50 performance 300 40 since 2006. 30 56.3 200 44.8 48.4 47.3 20 42.5 40.6 38.9 41.7 41.1 41.2 36.0 100 10 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

8 Industrywide ITO Contract Award Trends Most ITO mega-deals awarded have bundled Infrastructure and ADM together. Industrywide ITO Contracts With TCV > $25M: YTD - TCV Awarded Comparison ($B) 2006 2007 2008 2009 2010 Much of the activity in this space is Restructuring-related 17.9 17.3 16.8 16.6 16.6 14.4 11.9 11.0 8.9 8.6 8.4 8.5 8.3 7.6 6.2 6.5 5.0 4.9 3.9 4.1 ADM Infrastructure Network Services ADM + Infrastructure Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

9 Industrywide BPO Contract Award Trends 3Q10 BPO TCV declined more than 25% Q/Q and Y/Y. Industrywide BPO Contracts with TCV > $25M: Quarterly Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 10 100 3Q10 continued slow 8 75 6 BPO award pace. 9.7 50 4 8.1 8.4 7.3 5.9 5.9 5.4 6.0 2 5.0 4.0 25 3.9 0 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Industrywide BPO Contracts with TCV > $25M: YTD Comparison ($B) Industrywide TCV ($B) Total Industrywide Contracts (#) TCV # of ($B) contracts 30 200 While BPO TCV is 24 160 typically comprised 18 120 27.2 mostly of new scope, an 12 22.5 80 20.1 6 17.9 14.1 19.5 14.7 16.2 13.8 40 increasing amount is 11.4 7.0 0 0 restructurings. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

10 Industrywide BPO Contract Award Trends YTD contract award comparisons are mixed for most BPO processes. Industrywide BPO Contracts with TCV > $25M: TCV ($B) YTD Comparison 2006 2007 2008 2009 2010 5.2 4.8 4.4 4.2 3.0 3.2 3.1 2.7 2.2 2.2 2.3 2.1 2.1 2.3 2.0 1.8 2.0 1.7 1.6 1.4 1.4 1.0 1.0 1.1 0.9 0.8 0.8 0.6 0.6 0.4 Contact Centers FSO HRO F&A Industry-Spec Multi-Proc. BPO BPO Processes not featured include: Document Management, Facilities Management, Procurement, R&D/KPO, Supply Chain Management Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

11 Industrywide Regional Contract Award Trends Americas was down 42% Q/Q and 32% Y/Y but up YTD due to strong first half. Industrywide Contracts with TCV > $25M: Quarterly TCV ($B) of Contracts Awarded 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 18.8 12.3 9.3 9.6 9.2 8.6 9.6 7.4 7.9 8.1 7.1 7.0 6.4 5.6 4.3 3.4 1.2 2.1 1.3 1.1 2.1 Americas EMEA Asia-Pacific Industrywide Contracts with TCV > $25M: YTD TCV ($B) of Contracts Awarded 2006 2007 2008 2009 2010 37.2 33.2 27.5 26.7 23.5 24.9 23.0 19.1 21.1 21.3 7.7 8.9 6.1 5.9 4.5 Americas EMEA Asia-Pacific Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

12 Industry Segment Comparison Financial Services growth has been supported by large mega-deal restructurings, but Manufacturing and Telecom continue to lag. Industrywide Contracts With TCV > $25M: YTD TCV Awarded Comparison ($B) 2008 2009 2010 18.5 15.5 13.8 14.1 14.3 12.7 12.2 7.7 7.5 6.2 6.0 6.4 4.8 4.7 4.3 4.8 3.9 3.3 3.5 3.6 3.9 2.1 1.3 1.5 Business Energy Financial Healthcare & Manufacturing Retail Telecom and Travel, Services Services Pharma Media Transport Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

13 Service Provider Insights In-depth comparison of India-heritage and Multinational providers. Examination of two distinct groups of Service Providers. India-heritage providers (TCS, Infosys, Wipro, Et al.) Multi-national Service Providers (IBM, HP, Accenture, CSC, Capgemini, Et al.). Impressive growth of India-heritage providers seems contradictory to the low market growth that TPI has observed. Creation of three market views to better understand the potential disconnect. Method 1: Traditional view comparing market share by Number and TCV of contract awards. Method 2: An analysis of services revenues which incorporates a broader range of services that may not have been considered in the TPI Index. Method 3: Cross-referenced TPI-advised transactions to analyze interactions between these two sets of Service Providers. What does this tell us about competition in the outsourcing market today and in the future? Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

14 Service Provider Insights India-heritage providers have steadily increased market share since 2000. Industrywide Contracts With TCV > $25M: # of Contract Awards MNCs India-heritage Rest of Market 27% India-heritage 34% 31% 35% 33% 36% 37% 38% 33% 32% 31% 22% providers have 2% 3% 3% 5% 4% 9% 12% 20% 24% 27% 66% achieved 20% share 65% 63% 62% 60% 54% 50% 47% 44% 51% 42% of awards since 2007. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Industrywide Contracts With TCV > $25M: TCV of Contract Awards MNCs India-heritage Rest of Market TCV share for 13% 18% 20% 18% 29% 26% 25% 21% MNC’s has ranged 31% 38% 31% 1% 1% 1% 4% 2% 5% 8% 18% 16% 20% from 50%-60% since 13% 87% 81% 79% 78% 70% 66% 2007 and has 64% 51% 59% 58% 49% slightly increased since 2009 due to 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD restructuring activity. Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

15 Service Provider Insights The impact of India-heritage provider on the overall market size is modest but increasing in importance. Services Revenue Share %: Top 10 MNC’s versus India-heritage Providers Revenue India- MNC’s Growth heritage MNCs India-heritage Category Providers 6% 13% Y/Y Growth 10.1% -8.4% 3-Year CAGR 10.8% -1.4% 5-Year CAGR 25.0% 2.5% 94% 87% Size differences between India- heritage firms and MNCs determine how their growth rates can affect the broader market. 5 Years ago Current Market Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

16 Service Provider Insights With average TCV declining, MNCs and India-heritage providers are converging on the middle of the market. Industrywide New Scope Contracts MNC sweet With TCV > $25M: Average TCV ($M) spot While they Total Contract Value occasionally attack each other’s sweet spot, $25M-$199M is 358 becoming the battleground 238 221 210 206 184 153 130 129 India-heritage 110 105 sweet spot 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Functional Towers/Processes Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

17 Service Provider Insights ■ MNCs still control the lion’s share of the market ■ Remain ITO leaders ■ ‘Big-game hunters’ ■ Incumbents in contract restructurings which generally have high win rates ■ India-heritage providers have enjoyed high growth ■ Penetrate and Radiate strategy has altered competitive dynamics ■ Clear and focused strategies in pursuing ITO and BPO functions ■ Broader value proposition aside from low cost delivery ■ Next five years will bring… ■ More head-to-head battles ■ Intensified competition at all TCV levels ■ Continued change to service provider landscape Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

18 Summary Broader Market TCV has declined 4% for the year. Restructurings are overshadowing new scope. ITO weakened in 3Q10 but remains much stronger than BPO. By Region and Industry The Americas saw activity slow in 3Q10. The Financial Services sector in EMEA has done particularly well so far in 2010. Outlook 4Q10 will be a typically strong 4th quarter but probably not as robust as 4Q09. Full year 2010 is expected to be down slightly from 2009. Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

19 Market Trends & Insights Report on Service Lines Available October 31st! For this and further information visit www.tpi.net/TPIMomentum.html For details about TPI Momentum Services and Information Products, contact tpimomentum@tpi.net or: Paul Reynolds John Keppel Director and Chief Research Officer Partner & Managing Director Americas TPI Research, Analytics and Intelligence TPI Momentum TPI paul.reynolds@tpi.net john.keppel@tpi.net +1 508 625 2194 +44 7879 432 212 Copyright © 2010, Technology Partners International, Inc. All Rights Reserved

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3rd Quarter 2010 TPI Index

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3rd Quarter 2010 TPI Index — Presentation Transcript