Annual General Meeting © Infosys Technologies Limited 2002-2003 State of the Markets Basab Pradhan Senior Vice President and Head – World-wide Sales &

© Infosys Technologies Limited 2002-2003

AnnualGeneralMeeting

State of the MarketsState of the Markets

Basab PradhanSenior Vice President and Head –

World-wide Sales & Retail ( North America )

June 14, 2003 © Infosys Technologies Limited 2002-2003


This presentation may contain certain forward looking statements. The company may not achieve results as expressed or implied by such forward looking statements. Actual results could differ materially from those expressed or implied in such forward looking statements due to a number of factors including those discussed under the head "Risk factors" in the company's filings with the United States Securities and Exchange Commission. Do not place undue reliance on these forward looking statements. This presentation contains references to findings of various reports available in the public domain. The company makes no representation as to their accuracy or that the company subscribes to those findings. They are provided only by way of information.



Agenda

» The Numbers : Overall IT Spending & IT Services

» Changing Buyer Preferences

» Our response

» Competitive Landscape

» Implications for Infosys



2003 IT spending growth : Estimates may vary but a slow recovery or growth compared to 2002 is likely.

Gartner estimates 6.9% growth for IT Services during 2003



IT buyers are asking for business alignment and higher value-for-money in their IT spend

Expected Vendor Offerings

– Business solutions innovation

– Demonstrable insights on how to leverage IT for business needs

– Ability to bring industry best practices or benchmarks into client engagements

– Commitment to business outcomes

Bu

sin

ess

Alig

nm

ent

Bu

sin

ess

Alig

nm

ent Buyer Characteristics

• Believes IT plays an important role in staying competitive

• Seeks alignment of IT projects with business needs

• Believes IT spending must be justified on RoI

Buyer Characteristics

• Believes IT plays an important role in staying competitive

• Seeks alignment of IT projects with business needs

• Believes IT spending must be justified on RoI

Expected Vendor Offerings

– Higher Predictability – timelines, budgets

– Smaller, phased projects

– Generate savings to fund new projects

– Robust Global Delivery ModelHig

he

r V

alu

e

for

Mo

ne

y

Hig

he

r V

alu

e

for

Mo

ne

y Buyer Characteristics

• IT budgets under pressure

• Looking for significant cost reductions

• Wide acceptance of offshore IT Services

Buyer Characteristics

• IT budgets under pressure

• Looking for significant cost reductions

• Wide acceptance of offshore IT Services



These buyer characteristics – business alignment and higher value-for-money – are borne out by analyst surveys

Source: Forrester



Infosys is investing in Business Solutions, and in extending its lead in Offshore Strategic Sourcing Solutions

Creation of Vertical Practices / Initiatives– Retail – Automotive & Aerospace– Telecom– Healthcare

Building horizontal and vertical solutions

Hiring business process & industry experts

Bu

sin

ess

So

luti

on

s

Bu

sin

ess

So

luti

on

s

Consulting & SI Portfolio• Business consulting services• CRM / SCM / ERP solutions

Investments in Solutions• Joint solutions with Alliance

partners

Consulting & SI Portfolio• Business consulting services• CRM / SCM / ERP solutions

Investments in Solutions• Joint solutions with Alliance

partners

Strengthen Strategic Sourcing Approach

– Solution frameworks for outsourcing– Leadership in execution excellence– De-risking the Global Delivery Model – Client education & change management– Pricing and risk/reward models

So

urc

ing

S

olu

tio

ns

So

urc

ing

S

olu

tio

ns Broaden IT Services

Portfolio• Application development • Applications outsourcing• Infrastructure management• Systems Integration services

Broaden IT Services Portfolio

• Application development • Applications outsourcing• Infrastructure management• Systems Integration services



The Market now demands that Business Solutions must be executed in the Global Delivery Model

GDM Excellence

Bus

ine

ss S

olut

ion

Exc

elle

nce

Infosys

Global SIs – ACN, IBM

Other GDM Firms

Imperative to create and

integrate GDM capabilities

Imperative to create a solution focus to services



In the Strategic Sourcing arena, the market demand will be robust… and the deal sizes will be larger

Number of EnterprisesUsing Offshore Sourcing

for the First Time

Early adopters of sourcing programming in India include:

• Financial service

• High-Tech manufacturing

Type A : Early Adopters

Type C : Laggards

All types of enterprise (for example, healthcare, retail and energy companies) are piloting or outsourcing to India.

Largest segment of enterprise

buyers comprise this category;

thus, there will a large volume of

activity

Type B : Pragmatists

Time 1995 to 2001 2002 to 2003 2004 and Beyond

Global delivery (nearshore or offshore) moves to the mainstream.

Source : Gartner



Infosys, a pioneer in Offshore Strategic Sourcing Solutions continues to stay in the forefront…

This aggregates the preferred vendors across three categories of outsourcing (applications, infrastructure & BPO). Infosys stands 2nd for application outsourcing

This aggregates the preferred vendors across three categories of outsourcing (applications, infrastructure & BPO). Infosys stands 2nd for application outsourcing

Source: Forrester



The competitive landscape…

Business Solutions» Major competition – Global SIs» Global SIs like Accenture and IBM have business capabilities and

business buyer relationships that exceed ours» However, the market demands that the Business Solution be delivered

using GDM. Global SIs have not yet proven their ability to deliver using a GDM

Offshore Strategic Sourcing» Major competition continues to be Indian companies – TCS & Wipro» Pricing under pressure because of

» Supply overhang in a low growth IT services market» Clients seeking significant cost reductions in IT spends

» Global SIs still not credible competition



Implications for Infosys

For Offshore Strategic Sourcing Solutions» Continue to innovate in GDM» New capabilities to structure and manage large complex deals including new pricing

models» Related capabilities such as employee transition management

For Business Solutions» Integrate Consulting, Systems Integration and Application Development services to come

up with compelling solutions to business problems» Form alliance partnerships with ISVs with technology that can help build the solutions

Take these solutions to the market jointly with the alliance partners» Train Client Facing Group to be able to better sell Business Solutions

For Branding» Maintain overall positioning as leader in Offshore Strategic Sourcing Solutions» Work towards a business solution provider positioning

© Infosys Technologies Limited 2002-2003


Thank YouThank You

Documents

Annual General Meeting © Infosys Technologies Limited 2002-2003 State of the Markets Basab Pradhan Senior Vice President and Head – World-wide Sales &