© ValueNotes 2009 Executive Briefing Mumbai, 7 August 2009 e-learning Outsourcing 2009: Advantage India

© ValueNotes 2009 Scope & methodology of the study conducted Indian service providers Offshored e-learning work Market size Competitive environment Scope of the study Desk research - advanced search techniques Extensive primary research – providers, buyers, PE firms, others Market size estimated through a bottom up approach Methodology of the study www.sourcingnotes.com Scope

Indian service providers

Offshored e-learning work

Market size

Competitive environment

Desk research - advanced search techniques

Extensive primary research – providers, buyers, PE firms, others

Market size estimated through a bottom up approach

© ValueNotes 2009 The scope for e-learning Definitions: e-learning refers to any kind of learning that takes place through technological means. e-learning is: “technology-based learning - delivery of content via all electronic media, including the Internet, intranets, extranets, satellite broadcast, audio/video tape, interactive TV, and CD-ROM.” - Washington State Department of Personnel Components: Content Technology Services (consulting & support services) User segments: Corporate Academic (educational institutes, publishers, continuing education) Government (department training, public education) www.sourcingnotes.com

Components:

Content

Technology

Services (consulting & support services)

User segments:

Corporate

Academic (educational institutes, publishers, continuing education)

Government (department training, public education)

© ValueNotes 2009 Which are the main buyer markets? Varied maturity across buyer markets Global market sizing difficult Loose definitions Varied estimates/forecasts US most mature market UK, rest of Europe and Australia expanding rapidly Japan and Singapore lead the Asian region, followed by nascent markets like India and China www.sourcingnotes.com Source: ValueNotes Research

Global market sizing difficult

Loose definitions

Varied estimates/forecasts

US most mature market

UK, rest of Europe and Australia expanding rapidly

Japan and Singapore lead the Asian region, followed by nascent markets like India and China

© ValueNotes 2009 Advantage India??? Favorable conditions keeping India just ahead of competition www.sourcingnotes.com Source: ValueNotes Research

© ValueNotes 2009 Industry structure and size ValueNotes estimates the revenues from offshored e-learning services to India at $341 million in CY2008 Employee count in the industry is approx. 14,200 at the end of 2008 Offshore delivery centers of International providers Indian service providers Indian e-learning outsourcing industry www.sourcingnotes.com

ValueNotes estimates the revenues from offshored e-learning services to India at $341 million in CY2008

Employee count in the industry is approx. 14,200 at the end of 2008

© ValueNotes 2009 What kind of companies rule the industry? Contenders poised to grow the fastest www.sourcingnotes.com Source: ValueNotes Research Sample companies Typical characteristics Group 1: The Pioneers NIIT, Tata Interactive Systems Services / client mix: comprehensive e-learning services across all user segments Employees: > 500 Market share: 33% Number of companies: 2 Group 2: The Challengers Aptara, Aptech, Brainvisa, Genpact Services / client mix: comprehensive services to multiple segments internationally Employees: 200-500 Market share: 50% Number of companies: 15-20 Group 3: The Contenders Hurix Systems, MPS eServices, TutorVista, Upside Learning Services / client mix: most services to select international clients; some domestic business Employees: 100-200 Market share: 13% Number of companies: Upto 30 Group 4: The Specialists 24X7 Learning, C2 Workshop, E.I. Design, ZMQ Software Systems Services / client mix: niche services to domestic providers and clients; very few international clients Employees: up to 100 Market share: 4% Number of companies: > 100

© ValueNotes 2009 Market size and forecast Steady growth in revenues till 2012 www.sourcingnotes.com Revenues ~ $341 million in CY 2008 Growing at a CAGR of 15% between 2008 and 2012, to reach $603m in CY2012 Employee count ~ 14,200 at the end of 2008 To touch 22,400 at the end of 2012, at a CAGR of 12% Source: ValueNotes Research

Revenues ~ $341 million in CY 2008

Growing at a CAGR of 15% between 2008 and 2012, to reach $603m in CY2012

Employee count ~ 14,200 at the end of 2008

To touch 22,400 at the end of 2012, at a CAGR of 12%

© ValueNotes 2009 The way forward… Industry consolidation will drive future growth www.sourcingnotes.com Growth by strategic alliances Towards becoming comprehensive learning providers Domestic and international tie ups Growth by strategic acquisitions: Primarily in US and UK Towards stronger onshore presence Advanced, specialized tech. companies Growth by strategic investments: Investor interest in education

Growth by strategic alliances

Towards becoming comprehensive learning providers

Domestic and international tie ups

Growth by strategic acquisitions:

Primarily in US and UK

Towards stronger onshore presence

Advanced, specialized tech. companies

Growth by strategic investments:

Investor interest in education

© ValueNotes 2009 Please note that this is an abridged version of the presentation made at our executive briefing in Mumbai. For more information on how to download the entire presentation, or to find out more about ValueNotes e-learning research, please contact: Rakhi Vig +91 20 66231 717 [email_address] or visit www.sourcingnotes.com/content/view/486/1/ The complete version additionally addresses: E-learning offshoring maturity per component Indian providers’ service expertise Trends in billing rates and margins Key market presence Industry challenges and opportunities for growth