IT market

1. Analyst Meet
August 27, 2002
“Living up to the promise”
© 2002 Infosys Technologies Limited
State of the market
Basab Pradhan

2. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Today’s Discussion Points
■ State of the Markets – The Frenzy, The Freeze And After
■ IT Spend and Demand For IT Services Bottomed Out
■ Mainstream Acceptance of Offshore Provisioning of IT
Services
■ Infosys’ Position Of Strength To Capitalize on Market
Opportunities
■ Potential Risks In Today’s Market Environment

3. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
State of the Market Today – The Frenzy, The
Freeze, And After
Freeze In Technology
Decisions
State Of The
Market Today
Frenzy Of Technology
Spending
Dot-com Boom
Infrastructure Boom
Click-And-Mortar Race
Dot-com Bust
Infrastructure Crash
Click-And-Mortar Survival
Real E-Business
Build Resilient IT
Strategic New Initiatives
Strong Economy
Internet Euphoria
Time-to-market Demands
Quick Buying Decisions
Weak ROI Models
Weak Economy
Shrinking Revenues
Focus on IT Cost Control
Business Outlook Unclear
Projects Frozen / On Hold
Slow US Recovery
Challenging Stock Market
Selective Projects
Decision Cycles Improving
Focus on ROI Justification

4. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
IT Budgets Have Stopped Bleeding, But
Industries Vary Widely
■ Firms will spend 2.3% higher in 2002 than
in 2001.
■ Insurance and Transportation continues
trajectory of high spending growth
■ Utilities & High-tech continue their spending
slide
■ Shift of spend from app software licenses
into its implementation
■ CIOs continue to defer Big Consulting
Projects
■ C-Level Commitment Is On The Rise
■ Executive sentiment toward use of IT and
belief in IT as business enabler approach or
surpass early 2001 levels
■ However, control of IT spend has tightened,
from 17% in early 2001 to 58% centralized IT
today
Data Source : Forrester Research

5. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
This Market Leads To A Growing Demand For Outsourcing
Data Source : Forrester Research, and Infosys Analysis
Business Driver Implications & Opportunities for IT Outsourcing
Focus On “Core” ■ Growing imperative to differentiate in few areas
Financial
Restructuring
■ Cost Structure Alignment (Fixed /Variable Shift) to increase predictability and variability in
enterprise capacity as well as costs – and to manage economic pressures
Maturity of
Concept
■ Increase probability of success based on realistic customer expectations and better contract
management processes including the management of risks
Accelerating
ROI
■ Accelerate time-to-value by reducing IT and business process running costs for large initiatives,
spend with multi-year payback

6. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Average percent spent on Offshore
providers to increase from 12% to 28 %
Number of large firms using offshore
providers will grow by 50% in next 2 years.
Offshore technology budgets will more
than double.
Source : Forrester survey with 45 IT executives at firms with revenues > $1 billion and currently doing business with Technology service providers
Today, Most of the companies use offshore
providers for routine application development
and maintenance
But plan to broaden offshore providers
responsibilities to include engagements for IT
strategy, application design and IT architecture
More Companies Use “Offshore Providers” For External Spend,
Relying On Them For A Broader Range Of Services

7. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Infosys’ Ability To Provide Business Solutions Using
Technology Becomes A Strength In This Market
■ Despite the centralization
in IT Strategy, business
decisions impact
outsourcing purchases
■ Clients are willing to do
more with their offshore
providers
■ Price-sensitivity continues
to be high, for strategic
initiatives and programs
Opportunity to win business against Big 5 and local
systems integrators in the market
Infosys’ ability to provide technology-based business
solutions in target industries
■ Integrate competencies from across the company on
strategy, process, tech arch, program management etc.
■ Stronger implementation capabilities
Superior price-value proposition
■ Fully leverage market-facing talent and investments to
deliver business solutions
■ Reduce total cost for client based on the cost advantage
of Infosys’ GDM
Better margins
■ Sale based on business value or ROI, not cost
■ Stronger client relationship and stickiness
■ Most wins in competition with pure onsite firms / models
or sole-sourced

8. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Some Recent Client Wins For Such Business Solutions
GreenPoint Mortgage
■ Focus on the client’s business goals and
challenges
■ IT enabled Business process change
■ Advised the client on business process & IT
strategy
■ Client’s loan origination process
■ Technology strategy, roadmap and prioritization
■ End-to-end partnering
■ Advised On Business Process Reengineering
■ Program Manage and Implement Solutions
■ Move To Business Process Outsourcing
■ Relationship highlights
■ Multiple services – business consulting, IT
architecture, package evaluation, and business
process management
■ Executive relationship at the board level
$1B manufacturer
■ Business-critical project with full life-
cycle Greenfield ERP implementation
■ Implementation of J D Edwards
■ Total value of $6 Million, over 1 year
■ End-to-end Partnering
■ Technology Architecture
■ Process Implementation
■ Program Management Office
■ Relationship highlights
■ Integrating multiple Infosys
competencies
■ Fixed-fee, Single-bid, No RFP situation
■ CEO and Executive team sponsorship

9. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
In this market, Infosys is also well-positioned to compete
for the large offshore outsourcing initiatives
■ Managing cost of IT is the
most important driver
■ Besides cost, the ability to
provide flexibility and
scalability to the client’s IT
organization becomes key
■ Clients looking at their
offshore outsourcing
partners to take greater
ownership and risk
■ As clients reduce the total
number of external
consultants, offshore
providers today benefit from
a larger share of the pie
Flight to scale in offshore outsourcing
■ Clients value Infosys’ end-to-end
capabilities
■ Providing clients the ability to outsource a
larger spectrum of their IT needs
■ Take greater ownership to manage the
sourcing relationship and probability of
success
■ Superior price-value proposition
■ Providing more than lowest-cost
resources
■ Greater ownership of project and client
risk
■ Deeper relationships with fewer partners
■ Offshore outsourcing is more strategic
to clients
■ Financial Stability

10. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Some recent wins for strategic offshore outsourcing
Large Financial Services Firm
■ Vendor rationalization with a strong focus on
offshore outsourcing
■ Nine outsourcing providers since 1999 and earlier
■ Vendor rationalization initiative in June 2002
■ Rationalize to four vendors to “Invest” in relationship
■ Two vendors to “Maintain” and three to “Divest”
■ One new vendor introduced to “Pre-invest”
■ All vendors must deliver using the offshore model
■ Redefine outsourcing & offshore objectives
■ Original focus on costs and time-to-market
■ New focus on performance and vendor stability
■ Vendor capability to grow strategically with client
■ Relationship highlights
■ Deeper relationships, with larger business volume
■ Benefits of scale and vendor investments in learning
■ Pricing rationalized – linked to volume
Eastman Chemical Company
■ Designated As Strategic E-Business Partner
■ Expand relationship to take advantage of GDM
■ Dedicated offshore development center
■ Enhance various existing applications
■ Develop new applications
■ Reengineer legacy systems
■ Benefits of strategic offshore outsourcing
■ Flight to scale, quality, and lower risk
■ Broad range of services
■ Broad range of technologies and products
■ Competitive highlights
■ Competition with another top-tier offshore provider
■ Won on superior technology and domain capabilities
■ Competitive pricing critical to success

11. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Business Development – A Team Sport
■ The Sales organization has 3 levels below the HWWS –
RM, GM and BDM/SM
■ They team with Delivery roles like AM and BSM to
address opportunities
■ Pursuit teams are larger for larger deals including more
specialized roles
■ Relationships with clients are multi-level
■ Most CIO relationships are held at RM or GM level but is
not limited to one person
■ Everyone in top management pitches in for relationship
building

12. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Mega Deals
■ We are seeing larger deal sizes – validation of offshore service providers
■ Mega deals (>10 million in one proposal) are of two kinds:
■ Large Total Outsourcing
■ Large Systems Integration
■ Large Total Outsourcing
■ Risk is an important dimension. More than just value/cost
■ Experience counts - local employment track record needed
■ Size matters – revenue, balance sheet
■ Large SI
■ Risk
■ Experience
■ Capabilities – Skill sets, Business Domain competency
■ We are
■ Hiring experienced people into the frontline.
■ Striking Alliances or forming partnerships wherever it helps us.

13. Analyst Meet
August 27, 2002
© 2002 Infosys Technologies Limited
Potential Risks
■ Competitive Pressure Is A Major Challenge, Impacting Margins …
■ In the lower end of the market, differentiation is low
■ Second tier offshore service providers aren’t doing as well and are ‘buying’
business.
■ Clients are expecting significant cost savings
■ Global Competition Driven To Compete With The Global Delivery Model
■ Shrinking demand for services in the market
■ Under-utilized resources at high-cost onsite locations
■ Aggressive pricing to reduce losses and cover costs
■ Significant investments in setting up offshore centers in India and other countries
■ Early moves, but long term competitive threat
■ Geo-political instability no longer an active issue but carries long-term risk
that needs to be managed
■ Proactive communication to clients on Business Continuity Plans
■ Investment in alternate Development Centers outside India

14. Analyst Meet
August 27, 2002
“Living up to the promise”
© 2002 Infosys Technologies Limited
Thank You