4Q17 Global ISG Index

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Global Sourcing and
As-a-Service Market Insights
Hosted by:
Joe Foresi, Cantor Fitzgerald
January 10, 2018
FOURTH QUARTER AND FULL YEAR 2017

ISG Confidential. © 2018 Information Services Group, Inc. All Rights Reserved 2
GLOBAL 4Q17
Esteban Herrera
Partner and Global Leader
ISG Research
Covering the state of the
combined Traditional Sourcing
and As-a-Service industry for
the global commercial market.
Welcome
to the 61st
Quarterly
ISG Index
Barry Matthews
Partner, EMEA
Stanton Jones
Research Director
and Principal Analyst
Michael Witty
Director, Digital
Transformation – Retail

GLOBAL 4Q17
‘‘
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase™
At a Glance
Scorecard 4Q17 4Q Y/Y Full Year Full Year
ACV ($B)* Change ACV ($B)* Change
Global Commercial Combined Market $ 11.3 16% $ 43.3 15%
By Type Traditional Sourcing $ 6.0 8% $ 24.6 3%
As-a-Service $ 5.3 26% $ 18.7 36%
By Region Americas Combined $ 6.3 28% $ 23.1 23%
EMEA Combined $ 3.8 0% $ 15.3 3%
Asia-Pacific Combined $ 1.2 16% $ 4.9 19%
4Q17 Combined Market up 16% Y/Y;
Best-ever quarterly ACV in both IaaS and SaaS;
Traditional Sourcing up 8% Y/Y
For the full year, Combined Market up 15%,
double from year ago
In 2017, Americas up 23% versus 2016 with
Traditional Sourcing up moderately and
As-a-Service ACV up significantly
EMEA up against 2016 with strong
As-a-Service ACV growth but with the fourth
successive yearly decline in Traditional Sourcing ACV
Asia Pacific up 19% over 2016 with As-a-Service
growth slightly outpacing Traditional Sourcing

GLOBAL 4Q17
$18.3
$6.8
$3.8
$6.3
$17.2
$6.7
$4.5
$9.3
$19.0
$5.5
$4.6
$14.1
ITO BPO Saas IaaS
2015 2016 2017
$6.8 $7.0 $5.8 $6.9 $5.3 $6.5 $5.9 $7.4 $6.6 $5.8 $5.9 $5.5 $6.7 $5.8 $6.1 $6.0
$1.8 $2.2
$2.0
$2.0
$2.2
$2.2 $2.8
$3.0 $3.1 $3.1 $3.4 $4.2
$4.5
$4.1 $4.8 $5.3
$8.6 $9.2
$7.8
$8.9
$7.5
$8.7 $8.7
$10.4 $9.7 $8.9 $9.3 $9.7
$11.2
$9.9
$10.9 $11.3
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Traditional Sourcing As-a-Service
Global Commercial Sector Contracting Trends
4Q17 Combined Market ACV up 16% Y/Y as business spends more on technology to drive digital transformation;
for the full year, Traditional Sourcing remains in a very tight range as As-a-Service (specifically IaaS) continues to increase.
Global Commercial Sector Full Year ACV by Type ($B)
Global Commercial Sector Quarterly ACV ($B)
$26.5 $25.1 $23.8 $24.6
$8.1 $10.1 $13.8
$18.7
$34.6 $35.2 $37.6
$43.3
2014 2015 2016 2017
Global Commercial Sector Full Year ACV ($B)

GLOBAL 4Q17
Americas Commercial Sector Contracting Trends
Americas 4Q17 ACV is up 28% Y/Y with As-a-Service seeing continued growth and Traditional Sourcing surging past $3B for the second
consecutive quarter; for the full year, Combined Market is up 23% on record highs in both Traditional Sourcing and As-a-Service.
$2.4 $2.6 $2.7 $2.8
$2.2
$2.9
$2.4
$2.9 $2.9 $2.8 $2.4 $2.4 $2.7 $2.5
$3.5 $3.1
$1.1 $1.4 $1.2 $1.2
$1.3
$1.3 $1.7
$1.8 $1.9 $1.8 $2.0 $2.5 $2.7 $2.5
$3.0 $3.2$3.5
$4.0 $3.9 $4.0
$3.5
$4.2 $4.1
$4.7 $4.8 $4.6 $4.4
$4.9
$5.4 $5.0
$6.5 $6.3
Americas Commercial Sector Quarterly ACV ($B)
$7.3
$3.2
$2.5
$3.5
$7.7
$2.8 $3.0
$5.3
$9.0
$2.8 $3.0
$8.3
ITO BPO SaaS IaaS
2015 2016 2017
Americas Commercial Sector Full Year ACV by Type ($B)
$10.4 $10.5 $10.4 $11.8
$4.9 $6.0 $8.3
$11.3
$15.3 $16.5
$18.7
$23.1
2014 2015 2016 2017
Americas Commercial Sector Full Year ACV ($B)

GLOBAL 4Q17
Our Contracts Knowledgebase™
is used to determine placements
based on the annual value of
commercial contracts
awarded in the past 12 months.
Traditional Sourcing Market
C3/CustomerContactChannels
CSG Systems *
Ensono
Hexaware
LTI
Luxoft
Mindtree
Syntel
Virtusa
As-a-Service Market
Coresite
CyrusOne
Cyxtera *
LogMeIn
Mulesoft
Ultimate Software *
Black Knight Inc.
Genpact
HCL
Sutherland Global
TeleTech
Total System Services *
Unisys
Wipro
As-a-Service Market
Adobe Systems
Digital Realty
Equinix
Iron Mountain
Rackspace
ServiceNow
Workday
Atos
BT *
Capgemini
Cognizant
DXC Technology
IBM
Infosys
NTT DATA
TCS
T-Systems/Deutsche Telekom *
As-a-Service Market
Amazon Web Services
Google
Microsoft
Oracle
Salesforce
The Building 15 The Breakthrough 15The Big 15
Co. Revenues > $10 B
Sourcing Standouts
AMERICAS Co. Revenues $1 -10 B Co. Revenues < $1 B
Providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings.
the
ISG15
* New to leaderboard

GLOBAL 4Q17
Asia Pacific Commercial Sector Contracting Trends
Combined Market 4Q17 ACV up 16% Y/Y on best quarter ever for As-a-Service awards and moderately good quarter for Traditional Sourcing;
for the full year, Asia Pacific ACV increases 19% on continued growth in As-a-Service ACV and best Traditional Sourcing results since 2014.
AP Commercial Sector Full Year ACV ($B)
$1.02 $1.00
$0.46
$0.74 $0.66 $0.61 $0.57 $0.54 $0.48
$0.60 $0.52 $0.47
$0.35
$0.67
$0.78
$0.61
$0.22 $0.27
$0.25
$0.26 $0.28 $0.28 $0.38 $0.42 $0.45
$0.46 $0.52 $0.60
$0.64
$0.57
$0.61
$0.64
$1.24 $1.27
$0.71
$1.00 $0.94
$0.89 $0.95 $0.96 $0.93
$1.06 $1.04 $1.07 $0.99
$1.24
$1.39
$1.25
AP Commercial Sector Quarterly ACV ($B)
$1.76
$0.60 $0.38
$0.99
$1.45
$0.61 $0.43
$1.60
$1.94
$0.48 $0.48
$1.98
ITO BPO SaaS IaaS
2015 2016 2017
AP Commercial Sector Full Year ACV by Type ($B)
$3.22
$2.36 $2.07 $2.42
$0.99
$1.37 $2.03
$2.46
$4.21 $3.73
$4.10
$4.88
2014 2015 2016 2017

GLOBAL 4Q17
Firstsource Solutions
Hexaware
Luxoft
Ness Technologies
Posco ICT
SsangYong Information & Comm.
Virtusa
WNS
As-a-Service Market
Atlassian
Kingdee
LogMeIn
Mulesoft *
Veeva Systems *
Xero
Zoho
Amdocs *
Harman International
HCL
Samsung SDS
SingTel Optus
SK C&C Co.
Sutherland Global
Tech Mahindra
Telstra
Unisys
Wipro
As-a-Service Market
Adobe Systems
Equinix
Iron Mountain
PTC
Accenture
Atos *
Cognizant
DXC Technology
IBM
Infosys
Nokia *
TCS
As-a-Service Market
Alibaba
Amazon Web Services
Google
Microsoft
Oracle
Salesforce
SAP
Sourcing Standouts
Asia Pacific Co. Revenues $1 -10 B Co. Revenues < $1 B
the
ISG15

GLOBAL 4Q17
EMEA Commercial Sector Contracting Trends
4Q17 Combined Market in EMEA is up 27% Q/Q and flat Y/Y; for the full year, ACV results rise slightly
compared to 2016 with As-a-Service highs offsetting declines in Traditional Sourcing.
EMEA Commercial Sector Full Year ACV ($B)
$3.4 $3.4
$2.7
$3.4
$2.5
$3.0 $2.8
$4.0
$3.2
$2.4
$3.0
$2.7
$3.6
$2.7
$1.8
$2.4
$0.5 $0.6
$0.6
$0.5
$0.6
$0.6 $0.8
$0.7
$0.7
$0.8
$0.9 $1.1
$1.2
$1.0
$1.2
$1.4
$3.9 $4.0
$3.3
$3.9
$3.1
$3.6 $3.6
$4.7
$3.9
$3.2
$3.9 $3.8
$4.8
$3.7
$3.0
$3.8
EMEA Commercial Sector Quarterly ACV ($B)
$9.3
$3.0 $1.0
$1.8
$8.1
$3.3 $1.1
$2.4
$8.1
$2.3
$1.1
$3.8
ITO BPO SaaS IaaS
2015 2016 2017
EMEA Commercial Sector Full Year ACV by Type ($B)
$12.9 $12.2 $11.3 $10.4
$2.1 $2.8 $3.5 $4.9
$15.0 $15.0 $14.8 $15.3
2014 2015 2016 2017

GLOBAL 4Q17
Adare Group
Avaloq *
Coor Service Management
Firstsource Solutions
GFT Technologies *
Hexaware
Ibykus
KMD
LTI *
Luxoft
NNIT A/S
Virtusa
As-a-Service Market
Interxion
LogMeIn
OVH
Capita
Carillion
Diebold Nixdorf
Emcor *
EVRY
HCL
Interserve
Sopra Steria
Tech Mahindra
Tieto
Unisys
Wipro
As-a-Service Market
Adobe Systems
Equinix
United Internet
Accenture
AT&T *
Atos
BT
Capgemini
Cognizant
DXC Technology
IBM
Infosys
TCS
T-Systems
As-a-Service Market
Amazon Web Services
Google
Microsoft
Oracle
Sourcing Standouts
EMEA Co. Revenues $1 -10 B Co. Revenues < $1 B
the
ISG15

GLOBAL 4Q17
$1.9 $2.1 $2.1
$1.1 $1.2 $1.1
$2.8 $2.5 $2.7
$5.8 $5.8
$7.1
$2.0 $1.6 $1.6
$4.6 $4.3 $4.2
$1.2 $1.1 $0.8
$2.6
$3.5
$2.7 $3.1
$1.8 $2.3
$2.2
$3.3
$4.1
$0.6 $0.8 $1.2
$0.4 $0.6
$0.9
$1.7
$2.3
$3.3
$0.9
$1.1 $1.4
$1.4 $1.8
$2.6
$0.8 $1.0 $1.4
$1.1
$1.6
$2.1 $0.9
$1.1
$1.6
$4.1
$5.4
$6.2
$1.7
$2.0
$2.3
$3.2 $3.1
$3.6
$7.5
$8.1
$10.4
$2.9 $2.7 $3.0
$6.0 $6.1
$6.8
$2.0 $2.2 $2.2
$3.7
$5.1
$4.8
$4.0
$2.9
$3.9
2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017
Global Commercial Sector Industry Award Trends
Financial Services leads among several industry verticals (along with Business Services, Healthcare and Transportation)
that generated ACV growth in both Traditional Sourcing and As-a-Service segments.
Global Commercial Industries Full Year ACV ($B)
Financial
Services
Healthcare
& Pharma
Business
Services
Energy Telecom & MediaRetailConsumer
Packaged Goods
Travel, Transport
& Leisure
Manufacturing

GLOBAL 4Q17
Michael Witty
Director, Digital Transformation – Retail
Retail Industry: Trends
4Q17 Index Inside Track from

GLOBAL 4Q17
Retail Industry Embraces Automation, Robotics & Cloud to Be Truly Digital
Retail industry has been an early adopter of emerging technologies primarily due to digital-savvy customers driving change.
• Optimization of supply chain
• Increasing share in online retail
• Boosting customer data
Historically, retail industry
under margin pressure
Profit Margin
Stagnant
Top 15 Retailers in the last 5 Years
However, retailers are responding by
Integrated omni-channel presence, personalized in-store
experience, robots, intelligent online order handling,
real-time product tracking in supply-chain
Embracing cloud for flexible cost structure
& collaboration across global locations
Using robots to go in-store for customer
support and in distribution points
to move product
Improving logistics time & cost in e-commerce
by offering nearby pick up options

GLOBAL 4Q17
Key Retail Observations
Omni-Channel for Seamless Experience
Integrated channels in “bricks, clicks, rings, knocks”
enhancing user experience of “offering whatever,
wherever, whenever they want.
Increased IT Outsourcing
Retail companies have been looking to outsource their IT
needs to be agile to changing consumer needs, to reduce
IT costs, scalability and gain innovation capabilities.
Personalization & Engagement
Retailers are creating a more personalized consumer
engagement model via advanced analytics and BI tools.
With the evolving needs from consumers, retailers are
aligning themselves by optimizing their supply chains.
Efficient Supply Chains and Automated Warehouses Blockchain
As consumers and retailers opt for omni-channel
solutions, they will require insights into product and
purchase lifecycle developments.
Industry Trends
User Experience - UX
Retailers are re-aligning their Digital Strategy with the
touchpoints of the customer journey. Emerging technologies
are being piloted, but have yet to be adopted in large scale.
Emerging Technology Trends
Robotics
The retail market is expected to make increased use of
Robots for activities such as; customer interactions in the
local language and personalized engagements.
Augmented Reality & Wearables
A/R and Wearables allow consumers to unlock exclusive
content and track individual health data, to promote
healthcare and lifestyle products based on user behavior.

GLOBAL 4Q17
Intelligent Automation Software Market
Stanton Jones
Research Director
and Principal Analyst
4Q17 Index Inside Track from

GLOBAL 4Q17
Intelligent Automation Taxonomy
Cognitive TechnologiesRobotic Technologies Autonomic Technologies
Executes actions as
if it were a human, based
on pre-configured
instructions.
Analyzes unstructured input
(e.g., voice, text) and answers
questions, provides
recommendations and/or
makes decisions.
Analyzes semi-structured
input (events, tickets)
and orchestrates
entire processes
or environments.
Example
Firms

GLOBAL 4Q17
RPA – A Growth Story
Positives
100% +
2018 Projected Growth
Opportunity to sell
to new clients and to expand
with existing clients is significant
Desire to replace BPO
with Automation will
continue to expand
What could slow growth?”
After initial fast start, growth will
eventually slow to 60%+ over the next
3–5 years
Some companies getting stalled
on implementations
Sales and marketing costs are likely
to be high to accommodate hyper-growth
as deal sizes are already smaller in
RPA JourneyMarket Leaders
In RPA Software
Annual licensing between
$75K and $100K
Project
high growth
in coming
years

GLOBAL 4Q17
RPA Vendors Will Attempt to Move
Up the Enterprise Value Chain

GLOBAL 4Q17
Full Year 2017 ISG Index - Global Summary and Outlook
● Combined Market saw double-digit Y/Y growth for the quarter led by the Americas and Asia-Pacific
● For 2017, As-a-Service segment continued to surge ahead with Public Cloud leading the market;
SaaS and Traditional Sourcing segments still showed slow but positive growth
● Financial Services grew both its Traditional Sourcing and As-a-Service profile; other industries such
as Business Services, Travel and Healthcare also featured similar gains
● Changes in U.S. tax laws should free up money to be invested in projects and digital transformation,
ensuring that both IaaS and SaaS will flourish
● Expect to see As-a-Service growth of 20%+ in 2018 with 4% growth in Traditional Sourcing
Summary
Outlook

GLOBAL 4Q17
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GLOBAL 4Q17
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Learn More
Esteban Herrera
Partner, Global Leader
ISG Research
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Partner, Chief Research Officer
ISG Momentum
+1 508 488 6361
paul.reynolds@isg-one.com
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and Partner, ISG Digital Services
+1 303 748 6599
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+44 1737 371523
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GLOBAL 4Q16
GLOBAL 4Q17
Appendix: Score Card for TCV
FOURTH QUARTER 2017

GLOBAL 4Q17
4Q 2017 TCV Scorecard
The ISG Index has moved to ACV as the primary measure of the Broader Market.
We will continue to provide a high-level TCV view of the market via a Scorecard analysis.
*Contracts with TCV ≥ $25M from the ISG Contracts Knowledgebase™
Scorecard
4Q17 4Q Y/Y Full Year Y/Y
TCV ($B)* Change TCV ($B)* Change
Global Commercial Combined Market $ 31.1 30% $ 116.8 12%
By Type Traditional Sourcing $ 23.4 33% $ 88.9 9%
As-a-Service $ 7.7 21% $ 27.9 23%
ITO $ 16.0 38% $ 64.3 13%
BPO $ 7.4 22% $ 24.6 1%
IaaS $ 4.0 30% $ 14.1 51%
SaaS $ 3.7 12% $ 13.8 3%
By Region Americas Commercial $ 15.0 46% $ 55.6 17%
EMEA Commercial $ 12.7 16% $ 47.8 8%
Asia Pacific Commercial $ 3.5 24% $ 13.4 12%

ISG Confidential. © 2018 Information Services Group, Inc. All Rights Reserved.
Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic
or mechanical means, including information storage and retrieval devices or systems, without prior written
permission from Information Services Group, Inc.
isg-one.com
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firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the
world, ISG is committed to helping corporations, public sector organizations, and service and technology
providers achieve operational excellence and faster growth. The firm specializes in digital
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technology expertise, and world-class research and analytical capabilities based on the industry’s most
comprehensive marketplace data.

4Q17 Global ISG Index

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