GrowIT.in Nagpur IT Landscape Report 2011Q1

For emerging city Nagpur an initiative by in association with growIT.initiative Nagpur IT/ITeS Landscape understanding the local IT industry 2011Q13/8/2011 Copyright (c) pManifold 1

About this report...• Content • Objective – City Attractiveness – Make information on Nagpur’s IT • Benchmark and competitiveness landscape easily accessible. as identified by world leading industry sources – Industry Profile • Exports & Domestic sales, distributions by business models, top performers – Thriving Eco-system • Valuable for • Industrial Associations, User & Developer groups, IT Parks & SEZ – IT Professionals to stay updated on – Talent the local IT landscape of Nagpur • Fresh , lateral talent & potential – Global IT companies looking to set Inflow – middle and senior level up shop in Nagpur – Recent changes in the landscape – Local IT companies to attract talent • M&A activities and business opportunities3/8/2011 Copyright (c) pManifold 2

IT Businesses @ Nagpur – Expert Opinions, Ecosystem ATTRACTIVENESS3/8/2011 Copyright (c) pManifold 3

IT @ Nagpur on Radar of Industry Experts• India Top 100 – 3 from Nagpur • 25 most competitive cities in India. • 31 Emerging Global Destinations• Persistent #5, Micropro #76 & Excellon • Nagpur #9 overall; 1st in Tier-III cities • 3 cities of India. Nagpur among them#88 • Overall competitive score : 54.87 • Nagpur – Educational Hub; Lower crime•List based on Revenue for the year 2009 • Infrastructure score: 55.28 rate, Pollution & cost of living • Nagpur – Lower Attrition LevelsSource: PWC – Global Software Top 100, Dec 2010 Source:City Competitiveness Report, 2010 Source: KPMG –Exploring Global Frontiers – New Emerging Destinations, Feb 2009• Nagpur identified `Challenger’ to • Nagpur among Top 5 Tier III cities. • 15 Growth Centers in India assessed`Leaders’ like ‘Bangalore’ • Nagpur and Kolkata - Only tier 3 cities • Nagpur is #1 - People and Infrastructure.• Mentions Nagpur as - Location with with comparable supply of manpower to • Nagpur #3 – Business Environmentcompetitive labor, infrastructure and Pune. • Overall rank – #2enriching living environment. • Cost of Manpower 15-20% less than Kolkata and Pune.Source: Location Roadmap for IT-BPO Growth in India, 2008 Source: India -Next IT Offshoring Locations -Tier 3 cities, Q1, Source: Emerging Growth Centres, India, Q1 2007 2007 *Read these reports on http://bit.ly/bundles/webmanage/13/8/2011 Copyright (c) pManifold 4

IT Business CSFs in Emerging City Nagpur CSF – Critical Success Factors Key shortcoming Partial gap On trackElements Dimensions of framework Score* Description/Rationale • Cost of real estate • Lower than most tier 1 and tier 2 cities. Location1 Attractiveness • Occurrence of natural • Low risk of both droughts as well as floods. Seismic zone 2. calamities • Fresh talent availability • Fresh talent is available in abundance with a number of engineering Hard and schools around Nagpur and talent flows from central India region.2 Soft Infrastructure • Availability of Lateral • Potentially better or wider opportunities available in cities like Talent Pune, Hyderabad and other metro locations attract experienced talent • Most companies believe they have difficultly in attracting mid- management level talent • Infrastructural facilities • STPI & MIHAN have incubation facilities. News IT Parks coming up. • Top class Internet connectivity from multiple ISPs is available • High reliability Power supply zone (Zero Load Shedding) • Infrastructure to reach • Limited industry events locally to tap into global or domestic market Access to markets • Limited direct flights to destinations abroad3 markets Nagpur score evaluated for local IT Businesses from various qualitative sources (pManifold analysis) 3/8/2011 Copyright (c) pManifold 5

Broad Demographics, Distribution & Exports INDUSTRY PROFILE3/8/2011 Copyright (c) pManifold 6

Developed Industry Indicators – Steady evolving ITlandscape over stable Demographics & Enterprising base Macro IT Landscape Broader Nagpur Demographics No. of IT • 160+ (secondary research) including Geographic Central India (with zero mile marker); companies companies serving domestic markets Location Flying distance from Mumbai 1.5 hrs • 97 registered w/ STPI (w/ 46 actively Area 218 sq. km. reporting) serving export market Population 2,420,000 No. of IT Parks 5 devoted IT parks: (Density) – 2006 (11,101/sq.km) • MIDC IT Park @ Parsodi Literacy rate 84.18% • MIDC IT Park @ Sadar • Lambent IT Park @ Besa (private) Languages Marathi, Hindi, English • MIHAN Weather • Extreme weather with 3 main seasons – • Empress city IT Park (upcoming) Pollution levels Summer, Monsoon and Winter • Avg. temp: Max 46 °C; Min 10 °C Total Export Rs. 13,498 lac. (USD 28.72 million) • Avg. rainfall: 124.2cm (2009-10) • 8.23% CAGR in last 3 years • Amongst the top 3 Green cities in India Approx. 3500+ (only for export oriented Ranking • Fastest growing richest cities in India employment companies) Stability • Political: No significant riots • 15% year-on growth • Environmental: Almost zero probability • 8% attrition of earthquake, volcano and flood; • Avg. 3-5 yrs. Experience Moderate to severe drought prone classification No. of big M&As in Two major • Social: Amongst lowest and further last 2 years decreasing criminal rate, 68% reduction in last 5 yrs. Source: Public websites, STPI, Nagpur NIC 3/8/2011 Copyright (c) pManifold 7

Matured industry with wide global presence and clientele Age of Companies Front Office Locations (other than Nagpur) 16% 29% 48% 11% 22% 74% n = 89 n = 38 Co. Websites* Co. Websites* 0 to 5 years 5 to 10 years 10+ years USA Europe Others (Australia, Japan, etc)• A significantly large number of local • Most companies serving the export companies are older than 5 years market have office locations outside• A good number of fresh startups are India mushrooming around the matured • Over two-third companies have companies primarily in the product offices in the USA space * As per data available 3/8/2011 Copyright (c) pManifold 8

Strong Software Exports higher than National average with higher riskmitigation from recession – IT Services dominates over Products in bothExport and Domestic marketsExport sales from STPI registered active cos. Distribution of Exports by Business Models 3% 20,000.00 CAGR 8.23% 23% 15,000.00 Recession hit Export in INR (Lacs) 49.69% 10,000.00 74% 5,000.00 Devlopment/Application : ITES/BPO & Other : - FY 2007-08 FY 2008-09 FY 2009-10 Embeded Software : Product based : Source: STPI, Nagpur Source: STPI, Nagpur• The YOY growth for FY08-09 was • Most of the Sales in the IT 49.69% against National IT growth of Outsourcing space. 26.84% 3/8/2011 Copyright (c) pManifold 9

Heterogeneous Landscape by Business models and Sectorsserved Products vs. Services Industry Served 1 1 2 15% 23% 3 7% 13 10% 23% 8 n = 22 22% n = 89 Co. Survey* Co. Websites* Products Services - ITO Services - ITeS Education Healthcare BFSI Services - BPO OPD Services - KPO IT Hospitality Infrastructure• Mostly Services companies dominate over • Almost all sectors are served by local the Product companies primarily due to companies. export market • BFSI, Healthcare and Education lead the• The Product companies are also significant pack. in number but primarily target the domestic market * As per data available 3/8/2011 Copyright (c) pManifold 10

Strong Domain Knowledge across Technologies with client coverage in Niche areas for both Export and Domestic Markets This is only an indicative slide using a representative sample of the local IT companies. A more detailed study is in progress and the results will be available towards end of 2011Q1.Application Development & Maintenance 11 Other 19 Product Development & Maintenance 9 Database - SQL Server 10 Project Management - Agile Project… 9 Web Development & Maintenance 8 Enterprise/Server - .Net 9 ERP / Business Management Software 8 Database - MySQL 9 Mobile 5 Web Based - ASPX 7 IT Support 5 Cloud Computing 7 Other 4 Web Based - PHP 5 Technology Consulting 3 Web Based - JSP 5 Web Based - HTML 5 Electronic Data Interchange 3 Oracle 5 Business Intelligence 3 Mobile - Blackberry 5 TechnologyConsulting 2 Linux 5 TechnologyArchitecture 2 Enterprise/Server - C++ 5 NetworkingSolutions 2 Mobile - Windows 4 Mobile - Android 4 Internet Marketing / SEO / SEM 2 Internet Rich Applications - Flex 4 GIS 2 Mobile - Symbian Java 3 Data Mining 2 Mobile - iPhone 3 SystemsIntegration 1 Mac 3 SAP 1 Internet Rich Applications - SilverLight 3 Locationbasedservices 1 Internet Rich Applications - JFX 3 Project Management - Waterfall… 2 IT StrategyandTransformation 1 Mobile - Symbian 2 Game Development 1 IBM Technologies 2 Data Transcription 1 Enterprise/Server - Objective C++ 2 Animation 1 Mobile - Symbian C++ 1 n = 22 HP technologies 1 Co. Survey 3/8/2011 Copyright (c) pManifold 11

Established Excellence and Global Delivery Model - Top10 Exporters, by revenue, in FY09-10 Company Key Products/Services Primary Business Models Persistent Systems Ltd. Software Development IT Outsourcing Infospectrum India Pvt. Ltd. Software Development IT Outsourcing Globallogic India Pvt. Ltd. Mobile Computing IT Outsourcing Infocepts Technologies Pvt. Ltd. Business Intelligence IT Outsourcing Easypack Software Inc. ITeS / Software IT Outsourcing/ITes Development Zeon Solutions Pvt. Ltd. Software Development IT Outsourcing Suyash Software Pvt. Ltd. Medical Transcription IT enabled Services (now Cbay Systems) Zeta Softech Pvt. Ltd. LPO, BPO IT enabled Services Ascent Business Solutions Medical Transcription IT enabled Services RF Arrays Systems Pvt. Ltd. Hi-Tech, RFID IT Outsourcing Source: STPI, Nagpur & pManifold analysis 3/8/2011 Copyright (c) pManifold 12

Average Experience, Access to skilled Talent TALENT PROFILE3/8/2011 Copyright (c) pManifold 13

IT professionals employed by local industry are growingWorking professionals 4000 3320 • Avg. 3-5 years experienced 3135No. of Employees w/ STPI 3000 2523 talent registered cos. 2000 • Industry attrition lower at 1000 8% 0 • Limited access to lateral FY 2007-08 FY 2008-09 FY 2009-10 talent because of still Source: STPI, Nagpur smaller industry size3/8/2011 Copyright (c) pManifold 14

Fresh Talent is abundantAvailability Multinationals recruiting• Engineers • Major IT recruiters have visited the – 32-35 Engineering Colleges (2010) campuses in Nagpur to recruit mostly with approx 12K students Engineers & Management graduates graduating every year • Maximum salary for an engineer – Significantly large number of graduate was Rs.10.5 Lac per annum students are from IT & Computer and average salary being 3.5 Lac per Engineering degree annum* • Top recruiters visiting Nagpur:• Postgraduates & Polytechnics – Nagpur has 44 PG & has around 7 Polytechnic Institutes (2010)• General – Around 27 colleges of Arts & Commerce which can be potential tap for BPO services (Nagpur has a neutral English accent) * Based on data available from top engineering schools in Nagpur3/8/2011 Copyright (c) pManifold 15

INDUSTRY SUPPORT SYSTEM3/8/2011 Copyright (c) pManifold 16

Developed and evolving Support System – IT Parks, 1 emerging SEZ, various Industrial Associations, Technology User groups etc. Nagpur IT Support System Software Technology Parks of India (STPI), Nagpur Private Software Parks VASE – Vidarbha Association Software Exports • www. mah.stpi.in (Est. 1991; 97 Members) • Lambent IT Park (occupied by Globallogic) • (Est 1995; 50+ Members) • Sharing best practices, offering solutions &IT Parks @ Nagpur • 2 IT Parks, Incubation facility available • 2 Incubation blocks at Parsodi (1500 sq ft each), 30 • Upcoming bringing professionals together in IT industry terminals per block • Empress City Mall IT Park, Nagpur • Seminar ‘Opportunity Nagpur’ and • 1 Incubation block at Sadar with 12 terminals Destination Nagpur ‘ showcasing Nagpur IT • Quick statutory clearances, quality infrastructure and • Announced jointly with Nasscom & VED Leased line connectivity • Mantri Group’s IT Park • Networking dinners, sports, cultural • 3300+ IT professionals working in STPI registered • DLF IT Park events., social causes. Industrial Associations companies at Nagpur VCMDWA - Vidarbha Computer & Media Dealers Welfare Association • www.vcmdwa.org (Estbl. 1991; 100+ MIHAN, Nagpur Technology User Groups Members) • Emerging business hub spread over 3454 hectares with • Linux User Group • Restricts unfair trade practices, creates • awareness on products, services andSpecial Economic Zone (SEZ) state of the art infrastructure, facilities and services Java User Group • Claimed uninterrupted power supply, internet practices in IT • Microsoft User Group • 2nd best association in India as per DQ-ITC User Groups connectivity and water supply • Open Source Groups • Caliber Point and Ebix are already 2 operating cos. from survey 2010. ‘Compex’ – Megaevent held • Joomla, Drupal, Netbeans, etc every year in January since last 18 years MIHAN. Majors like TCS, GE, Microsoft, L&T, Patni and others are holding land, but move is awaited pending negotiations. 3/8/2011 Copyright (c) pManifold 17

Typical industry setups• Almost all export oriented companies • Available built-up facilities are registered with STPI – STPI • Most home grown local companies have started using STPI incubation and moved out into their own facilities• Most large companies have their own • http://www.mumbai.stpi.in/nagmemlist.asp building infrastructure either in the STPI IT Parks or their own land – MIHAN • Located 12km away from the city. Currently hosting a few companies • http://www.madcindia.org/mihan.html – Regus • Located centrally in the city inside a large mall.• Upcoming Facilities Suitable for short term, small space required by established companies starting up fresh in – IT Park @ Empress city Nagpur • Promoted by KSL Industries • www.regus.co.in/ • 60,000 sq. feet of space in the city besides the biggest mall in Nagpur • Ready in 6 months (as per current info) – Custom built • http://www.kslindustries.com/contents • Quite some companies occupy privately owned, custom built space /empresscity.html • Some of the real estate developers are able to provide managed office space 3/8/2011 Copyright (c) pManifold 18

Active Technology User and Developer Groups create stronglocal ecosystem for IT professionals Active voluntary groups on technology and • Microsoft User Group development are an indicator of the thriving – Microsoft DreamSpark Yatra - an initiative ecosystem a developer could benefit from. to broader the technical horizon of the students about technology and to get a chance to meet Software Industry Experts – http://nagpurug.org/• A number of technology and user groups meet-up and host technical events at Nagpur including meet-ups on twitter and open source applications. • Linux User Group – Yahoo-group mailing list connecting Linux enthusiasts and supporting Linux users in Nagpur – http://www.nagpur-lug.com/ • Java User Group• Recent events in the tech space at – Unite Java Developers & students to share their ideas & promote JAVA in the city. The Nagpur include, group has organized meetings on JAVA – IBM DEVELOTHON 2010 Developer, Demo on SUN SPOT technology, JSF, Rock Star Developer – Dreamspark Yatra 2011 – www.jugnagpur.com3/8/2011 Copyright (c) pManifold 19

Steady Inorganic growth through M&A M&A’s in the recent years RECENT ACQUISITIONS indicate that Nagpur based companies grow into best in class Persistent, a 5400+ strong global and become acquisition targets Feb 2011 company, acquisition of Infospectrum for global corporations. HQ’ed at Nagpur Ebix, USA (Fortune 500 company) indirect acquisition of Premier Technology Group Oct 2009 at Nagpur through acquisition of EZ Data• Key leverage points in USA gained by acquisition of local companies Cbay System, a UK based health – Cost advantage services BPO, acquisition of Suyash Nov 2007 Software - a local medical transcription – Maintaining company among top 10 exporters competitive advantage – expand to new Induslogic, USA. now Globallogic a markets by acquisition 4000+ people strong of customer base Apr 2006 company, acquisition of Lambent Technologies of Nagpur – Brand build-up3/8/2011 Copyright (c) pManifold 21

Innovative startups are coming up… Multiple innovative startups are mushrooming in the software product / platform space Officebox is an innovative cloud based offering automating office applications for small and medium sized businesses in India. The startup is founded by Shreesh Vakil who Examples Few was ex-Center head of Persistent Systems at Nagpur. and more in store*… http://officebox.in/ Dr. M SAAS is an interesting cloud based An innovative location based services software offering for hospitals. The software platform company headed by Shaheer is conceptualized and promoted by Dr. Murli Ahmed. The startup has most recently of Hope Hospitals and has won accolade on launched Indias first off-board, voice being the Best Healthcare Innovation. guided, turn-by-turn Navigation application http://www.drmsaas.com with Airtel. http://www.locationguru.com * This is NOT a comprehensive list, but only a sample show case. More detailed database to be built @ GrowIT.in. Please register.3/8/2011 Copyright (c) pManifold 22

This report is made available as part of the, GROWIT.INITIATIVE3/8/2011 Copyright (c) pManifold 23

Partners for emerging city NagpurAbout NagpurFirst.org Nagpur a global city by 2020www.pManifold.com www.GrowIT.initiative• pManifold is a young consulting • This initiative is driven by pManifold’s IT company providing solutions for Practice in an endeavor to grow the IT businesses to improve, scale-up and industry in emerging cities, starting with Nagpur, by addressing the challenges it diversify. has identified from interactions with diverse stakeholders, including local IT• pManifold was started in July 2010 by business leaders, global investors and Faiz Wahid and Rahul Bagdia, both professionals. ex-VNITians, having worked and studied abroad decided to relocate to • To discuss more on how this initiative India and help fuel local business could benefit you and/or how you could growth. contribute towards the greater good, please get in touch with Faiz Wahid (+91 880 565 5069) or Godwyn Francis (+91 787 501 6957)3/8/2011 Copyright (c) pManifold 24

Connect, learn and share your thoughts with otherprofessional and business leaders at www.growit.inOnline Portal – GrowIT.in Upcoming Report• Stories, interviews and conversations on • What matters to IT Business leaders? Nagpur’s IT industry – Survey results from top IT managers and http://growit.in business leaders from Nagpur on, • Business Effectiveness • Detailed Talent Profile• Over 100+ IT companies listed at Nagpur • Why Nagpur? made discoverable through the online • Business Challenges company directory http://growit.in/discover-companies.html • In association with Vidarbha Association of Software Exporters.• Industry intelligence disseminated through the online portal http://growit.in/industry-reports.html • Publication due at end of March 20113/8/2011 Copyright (c) pManifold 25

• DISCLAIMER – pManifold Business Solutions Pvt. Ltd. (“pManifold”) engaged to prepare this presentation as part of it’s Growth Initiative for Nagpur’s IT Industry. – All rights reserved. All copyright in this presentation andCONTACT related works is solely and exclusively owned by pManifold. The same may not be reproduced, wholly or in part in anyIT Practice material form (including photocopying or storing it in anyFaiz Wahid medium by electronic means and whether or not transiently+91 880 565 5069 or incidentally to some other use of thisFaiz.Wahid@pManifold.com presentation), modified or in any manner communicated to any third party except with the written approval of pManifold.Godwyn Francis – This presentation is for information purposes only. While dueGodwyn.francis@pManifold.com care has been taken during the compilation of this presentation to ensure that the information is accurate to theIndia (Main office) best of pManifold and its partner’s knowledge and belief, theCrystal Plaza, Level 2 content is not to be construed in any manner whatsoever as a276 Central Bazaar Road, substitute for professional advice.Ramdaspeth – pManifold and its partner’s neither recommend nor endorseNagpur - 440010 any specific products or services that may have beenMaharashtra, INDIA mentioned in this presentation and nor do they assume anyhttp://www.pmanifold.com liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. – Neither pManifold nor its partners shall be liable for anyUSA (Liaison Office) direct or indirect damages that may arise due to any act orMr. Dinesh Jain omission on the part of the user due to any reliance placed or2020 Calamos Ct., guidance taken from any portion of this presentation.Suite 209 – Logo’s and pictures are properties of their respective owners.Naperville, – With no existing consolidated database of localIL 60653, USA companies, the information presented is not comprehensive, but first effort to raise a community of IT+1 630-853-3520 industries through GrowIT.in portal, which hopes to get alldinesh.jain@pManifold.com local companies registered on it and actively engaged.3/8/2011 Copyright (c) pManifold 26

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GrowIT.in Nagpur IT Landscape Report 2011Q1

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