Sudhakar Ram, Chairman and Managing Director, Mastek Ltd

Indian IT: Shifting sights from America to Europe Is that the solution? Sudhakar Ram Chairman & Managing Director Mastek Ltd www.mastek.com 13 February 2008

Indian IT/ITES: Low penetration in large markets
Attempts to ‘shift focus from America to Europe’ assumes that the industry’s current challenges are geography-led, not business model led
Market penetration data paints a different picture
The US accounts for ~67% of India’s IT/ITES export, but our share of addressable market is very low
Penetration is relatively better in the UK!
UK has traditionally been more open to higher-end services
The Mastek experience (LCC, NHS)
Results in relatively higher penetration
*Nasscom Strategic Review 2006 & 2007; CY2006/FY2006 estimated figures

‘Solutions’ is the solution
Indian IT industry heavily focused on ‘services’
IP-led offerings, IT consulting, & SI account for <5% of Indian IT/ITES exports
Limited presence in higher-end segments = Lower market penetration
Shifting focus to Europe not the answer
‘ Services’-led model accentuates language and cultural barriers
Move up the value chain, from ‘services’ to ‘solutions’
Engage in higher-end consulting and IP-led activities
Strategic applications of IT

Ride the ‘third wave’ of Indian IT
Wave 1 (1969-1999): Establishing capability of the Indian professional
Wave 2 (1995-2015?): Establishing India as a destination for offshore programming
Wave 3 (2005 – 2020?): Indian IT players achieving world dominance
Scale Play
Niche Strategy
~$1bn ~$20bn ~$100bn

Top-end presence drives broader market share
Progression up the value chain drives greater market penetration
Higher-end presence does not preclude lower-end market share
A solutions provider naturally gets to maintain delivered applications
Shift towards IP-led IT solutions can enable:
deeper inroads in both American and European markets
better margins to offset wage inflation & rupee appreciation
IP System integration Custom application development and implementation Application management

Shift focus to ‘solutions’, drive growth in both US and European markets!
Thank you

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Sudhakar Ram, Chairman and Managing Director, Mastek Ltd

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