This document summarizes a study of client data from the top five Indian IT vendors - TCS, Infosys, Wipro, Cognizant and HCL. The study found that TCS has maintained its leadership position in terms of revenue growth and number of large clients. While Cognizant grew the fastest over the past six years, it may face challenges ensuring it does not spread itself too thin across industries and geographies. Infosys' leadership position is fading and it needs to show it can execute its strategy in the next few quarters. HCL will need to build out its service offerings and acquire more large deals. The document also briefly discusses other mid-tier and smaller Indian IT vendors.

1. Research | Strategy | Advisory

2. Sudin Apte, CEO & Research Director
At Bangalore, October, 2012

3. EvaluatingTopVendors’ClientData
Premise
With 90% business coming from
their existing clients, study of client
data and its movement is very
important.
Client data behaviour not only
throws up interesting insights, but
also tells possible reasons and its
impact in the long run.
It also indicates vendors’ grip on
accounts and relationships with
key decision makers, and their
ability to sell incremental revenue
that will decide future of these
companies in coming five years.
What we did and why?
Findings from client data
of top five vendors
Understanding their
strengths and issues
Discussions and Q&A
Agenda

4. ResearchMethodology
 Studied growth, profitability, detailed client
data and metrics of top Indians over past 8-10
quarters
 Interviewed key providers to know their views
and reasoning
 Compared and contrasted some of the
findings in competitive situation
 Built study findings and our assessment

5. Basics
 TCS emerged as first Indian to become 10B IT
services company. Maintained its lead over
peers
 Pecking order changed with Cognizant
growing far faster than the peers, increased
its revenue seven times in past six years
 All, exceptWipro, grew total client count

6. TCSmaintainsleadershipandpace
Movement of quarterly revenue (million US$) for past 6 quarters
Source – Offshore Insights, company websites
500
1000
1500
2000
2500
3000
Q4 FY11Q1 FY12Q2 FY12Q3 FY12Q4 FY12Q1 FY13
TCS
Infosys
Wipro
Cognizant
HCL

7. Changingpeckingorder
Revenue growth (absolute $ terms and %)over past six years
(LTM revenue in million US$ on ( 31 March 2006 and 30 June 2012)
Source – Offshore Insights, company websites
0%
100%
200%
300%
400%
500%
600%
700%
800%
0
2000
4000
6000
8000
10000
12000
TCS Infosys Wipro Cognizant HCL
LTM revenue on 31 Mar, 2006 LTM revenue on Jun 20, 2012
% Growth in this period

8. All,exceptWipro,grewtotalclients(netno.)
consistently
300
400
500
600
700
800
900
1000
1100
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TCS
Infosys
Wipro
HCL
Cognizant
Growth of total number ofActive Clients in last two years
Source – Offshore Insights, company websites

9. Clientdatadebunksvendorgrowthmyths
(orshallwesaypropaganda)
 Increase in total client count do not assure
growth
 Even growing 100M accounts not essentially
means overall, fast revenue growth
 Trends in sub $20M and large deals (50M and
100M annually) show distinct trends
 TCS and Cognizant show overall growth, but
Cognizant had to open several new verticals
and geos to get that growth

10. Everyonegrew$1millionclients,thoughTCS
andHCLwerefasterinthelot
250
300
350
400
450
500
550
Q2 FY11Q3 FY11Q4 FY11Q1 FY12Q2 FY12Q3 FY12Q4 FY12Q1 FY13
TCS
Infosys
Wipro
HCL
Total number of clients that give more than $1 million business
in preceding 12 months
Source – Offshore Insights, company websites

11. HCLandTCScontinuedtheirMarchin$5M
clients slab
100
120
140
160
180
200
220
240
260
280
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TCS
Infosys
Wipro
HCL
Total number of clients that give more than $5 million business
in preceding 12 months
Source – Offshore Insights, company websites

12. 40
60
80
100
120
140
160
180
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TCS
Infosys
Wipro
HCL
…HCLandTCScontinuedtheirMarchin
$10Mclientsslabaswell
Total number of clients that give more than $10 million business
in preceding 12 months
Source – Offshore Insights, company websites

13. InfosysandTCSgrewin$50Mclients,HCL,
Wiprostartedsaturating
0
5
10
15
20
25
30
35
40
45
50
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TCS
Infosys
Wipro
HCL
Total number of clients that give more than $50 million business
in preceding 12 months
Source – Offshore Insights, company websites

14. TCSsurpassedeveryoneinlargedeals ($100M+)
0
2
4
6
8
10
12
14
16
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TCS
Infosys
Wipro
HCL
Total number of clients that give more than $100 million business
in preceding 12 months
Source – Offshore Insights, company websites
Note – Numbers are small and may vary quickly

15. Today’sClientDataDecides Tomorrow’s
Prospects
 TCS will continue its growth story, enjoys huge
opportunity
 Infosys too, has potential and client base, but
need higher leverage of existing relationship
 Cognizant need to ensure it do not spread too
thin, as it opens up newer verticals and geo
 HCL will face challenges to add real large deals
as they lack number of services
 Wipro has set of challenges it needs to address
on client front

17. Topstrategicthemes
 Clients need next level of benefit from IT
firms and various camps prepare for wining
newTech reality
 Shift from Ops IT centric business to IP led
business
 Age old offshore advantages vanished, but
clients need further saving
 Gaps between offshore capability and client
demands – domain, account management,
consultative selling, account management
and relationship sophistication
 Increasing role of IP and platform play

18. TataConsultancyServices
 Strengths:
 Traditional strengths continue – scale, skill, GDM, lower rates
 New client centricity model and client partners
 Extended service line and domain capabilities to offer high end
services
 Good strategy on IP and patents based solutions
 Superior automation and productivity initiatives giving next level
of saving
 Young, energetic organization
 Issues:
 New/emerging technology strategy is average and have limited
traction
 Still some way to go on Sales and Marketing upgradation,
 Our take –
TCS will maintain its leadership position in coming 3 years

19. Infosys
 Strengths:
 Right strategy and market understanding in BTE
 Good domain and consulting capabilities
 Superior IP/Platform strategy, investments and traction
 Solid BU level strategy for leading BUs serving traditional
services
 Issues:
 Though leadership position fading away
 Uncertainty about leadership and its fall out continues
 Lower S&M spend
 Our take –
Next two-three quarters are critical for Infosys to show its
ability to execute the strategy

20. Cognizant
 Strengths:
 Continuity of successful strategy around client centricity
and business focus
 Growing brand image attracting clients as well as talent
 Higher account level investment and mining capabilities
 Focus and commitment to emerging tech (SMAC stack)
 Issues:
 Positioning of SMAC evolving technical and over emphasis
on emerging technology’s potential
 Strategy, while successful, is not updated substantially
 Our take –
Next 18 months will decide if Cognizant is able to manage the
growth it is experiencing

21. HCLTechnologies
 Strengths:
 High energy, aggressive engine
 Rapid adoption of emerging models (pricing, engagement)
 Good traction on emerging technology and winning deals
around these capabilities
 Ent Apps and transformational capabilities
 Issues:
 Dropping profitability
 Limited service line offerings, limited ADM practice
 Our take –
Will HCL be successful in building broad service line portfolio
and grow large deals (50M/100M)??

22. Wipro
During the study process,Wipro opted to back
out from the research and do not want to be
featured in the report

23. Interesting“Midtierandsmall”players
Mahindra Satyam +Tech Mahindra
Genpact
iGate
Hexaware
L&T Infotech
MindTree
KPIT Cummins
Persistent
Syntel
Synechron

25. Thanks
Research Garage, 12 Shailesh Society,
Ganesh Nagar, Pune – 411 052, INDIA
Email – sudin@offshoreinsights.com
Phone – (020) 2545 9851 / 9852