INDUSTRIAL ANALYSIS

IT/ITES Sector
Analysis of IT/ITES sector undertaken as an academic activity for Economics Project @ DoMS, IIT Roorkee, Class of 2013.

Created By: Rohit Jain (11810069) Sri Vivekananda (11810071) Nikhil Sankhla (11810050) Chitrangada Gupta (11810024) Swati Birla (11810084) Nimmala Chandrakanth (11810052)

Table of Contents

GROUP DETAILS ...................................................................................................... 3 LANDSCAPE OF IT/ITES INDUSTRY....................................................................... 3

Size of the Industry .......................................................................................................................... 3 Key Markets ...................................................................................................................................... 5 Recession and After Effects ........................................................................................................... 5 CSR Activities ................................................................................................................................... 6 INVESTMENT POLICY AND REGULATIONS ............................................................................ 7

INVESTMENT OPPORTUNITIES AND CHALLENEGES ......................................... 7

OPPORTUNITIES .................................................................................................................................. 7 CHALLENGES ....................................................................................................................................... 7

OUR APPROACH ...................................................................................................... 8 ANALYSIS OF ORGANISATIONS ............................................................................ 8

IT Services......................................................................................................................................... 8 Infosys Technologies Limited ..................................................................................................... 8 Tata Consultancy Services ....................................................................................................... 11 Cognizant Technology Solutions ............................................................................................. 13 Product Development, Engineering and R&D ........................................................................... 17 Microsoft Inc. ............................................................................................................................... 18 Google Inc. .................................................................................................................................. 21 ADOBE......................................................................................................................................... 25 IT Enabled Services ....................................................................................................................... 27 Genpact ....................................................................................................................................... 28 EXL ............................................................................................................................................... 30 Platform BPO .................................................................................................................................. 32 Cloud Computing ............................................................................................................................ 35

REFERENCES ......................................................................................................... 41

GROUP DETAILS
Name of the Industry : IT/ITES Sector Team members and Mentor name(Group No. 14) o Mentor: Anuj Mody o Group Leader: Rohit Jain o Members: Sri Vivekananda Chitrangada Gupta Nikhil Sankhla Swati Birla Nimmala Chandrakanth Number of Meetings with mentor: o Mail Correspondence: Five o Face to Face: Three We have divided the work by dividing the industry in horizontals: o IT Services: Chitrangada Gupta o IT Enabled Services: Nikhil Sankhla o Product Development: Swati Birla and Chandrakanth o Emerging Sectors: Sri Vivekanand o Developing Approach, In-Sync activities for the group, inputs in all ongoing activities and data collection: Rohit Jain

LANDSCAPE OF IT/ITES INDUSTRY

The Indian IT industry has been one of the great success stories of modern India. It is arguably the most global of any Indian Industry and has created international benchmarks on quality. In addition to becoming the global brand ambassador it has crossed significant milestones in terms of revenue growth, employment generation and value creation. With a compounded annual growth rate (CAGR) of over 24% IT/ITES has emerged as a key growth sector of the Indian economy contributing around USD 76.1 billion to the revenue thus accounting for around 6% of Indias GDP. IT/ITES employees around 2.3 million people directly and many others indirectly.

Size of the Industry

IT sector can be divided into four major groups (horizontals): IT Services : revenue $36.2 billion, CAGR 21.8% IT enabled Services : revenue - $14.7 billion, CAGR 21.8% Product Development, Engineering and R&D revenue - $12.8 billion Hardware revenue $ 9.4 billion

The revenue generated can be categorized further into domestic and export revenue. The domestic market is around $25 billion and Export revenue earned is approximately $50 billion. The share of various horizontals is shown in pie chart:

The sector is further divided into many verticals like Banking and Financial Services, Retails, Healthcare to name a few. Their distribution in export and domestic market is as shown in the diagram.

Key Markets

In terms of market share US still accounts for lions share (61%) of the total export revenue generated in India. This is followed by UK accounting for 18% of the total revenue. However with the focus on geographic diversification Indian companies are extending their reach to markets like Asia Pacific, Middle East etc.

Recession and After Effects

Although the Indian IT sector was somewhat resilient to the global slowdown, the sector experienced around 1 lakh job cuts and drop in salary increments from about 14-18% levels to 6-10% levels. The year 2010 has been a comeback year. Most of the large IT companies have shown healthy projects in pipeline in addition to a significant growth in the revenues. Despite this there are trends emerging which indicates slower growth for small and medium cap players due to higher operating cost. This trend may lead the companies to consider inorganic growth i.e mergers/ acquisitions.

Also as the Indian IT industry has to move up the value chains trends like cloud computing and platform BPO are picking up pace with the companies.

CSR Activities

Indian IT industry is actively involved in the CSR activities and hence affecting the economy and society as a whole. The activities are in the area of Education, Health and Environment. Apart from these direct activities, IT/ITES sector has resulted in: Balanced regional development, Growth opportunities for youth, Empowerment of women etc. Socio-economic contribution of the Indian IT/ITES industry:

INVESTMENT POLICY AND REGULATIONS

IT Sector has given India formidable brand equity in the Global Markets. Keeping this in view, the Government has set up a National Manufacturing Competitive Council(NMCC) to provide a continuing forum for policy dialogue to energize and sustain growth of manufacturing industry including IT hardware. Few of the policies worth mentioning are: Industrial Approval Policy Foreign Investment Policy Foreign Trade Policy SEZ Scheme Export Promotion Schemes

INVESTMENT OPPORTUNITIES AND CHALLENEGES

OPPORTUNITIES

India offers a unique combination of attributes that have established it as a preferred offshore destination for IT-BPO. Over 2001-2006, Indias share in global sourcing is estimated to grown from 62% to 65% for IT and 39% to 45%for BPO. The visibly higher preference for India is driven by its unmatched superiority when measured across a range of parameters that determine the attractiveness of a sourcing location. Abundant Human Resource Cost Advantage Emphasis on Quality and Security Rapid growth in Key Business Infrastructure

CHALLENGES

Small Players High Attrition Margin Weak Brand Infrastructure MNC Influx

Backlash in US and Europe

OUR APPROACH
Based on the categorization of the sectors i.e. horizontals, verticals and the markets IT companies operate in; the group members were allotted the organisations for collection of data. Analysis was done on the allotted organisations on the following points: o Qualitative analysis Business model followed Hiring policies Position in the value chain Competitive Advantage Future Prospects Opportunities Threats Quantitative Analysis Market Share nd Gap between market leader and 2 key player Analysing Balance Sheets Government Policies and its effect Notes from eminent personalities from the sector Skill Gap

o o o

Emerging Trends: Analysing the business model followed for the new generation service. Quantitative and Qualitative analysis for following trends. o Platform BPO o Cloud Computing S.W.O.T analysis of the sector as a whole, drawing conclusions from the analysis done on organisations. Analysing the way ahead of the sector.

ANALYSIS OF ORGANISATIONS
We have divided the organisations primarily on the basis of horizontals and then analysing organisations activities across verticals and in different markets. We have taken about two organisations for each horizontal.

IT Services
Infosys Technologies Limited

History 8

Established in 1981, IT services company with more than 133,000 employees. a capital of US$ 6.35 billion (LTM Q1- FY12 revenues) company with a market capitalization of approximately US$ 35 billion. Infosys Limited (NASDAQ: INFY) was started in 1981 by seven people with US$ 250. Today, it is a global leader in the "next generation" of IT and consulting with revenues of US$ 6.604 billion (LTM Q2-FY12). It employees more than 1,33,000 people and has a market capitalization of approximately US$ 35 billion.

QUALITATIVE ANALYSIS Recent Milestone

1993: Offered IPO. 2000: Launched the universal banking solution from Infosys, as Finacle 2002: Launches Progeon, offering business process outsourcing services 2009: Infosys selected as a member of The Global Dow (an index of the most innovative, vibrant and influential global corporations).Ranked as Indias Most Admired Company according to the Wall Street Journal survey.

Offering Span
Business and Technology consulting, Application Services, Systems Integration, Product Engineering, Custom Software Development, Maintenance, Re-Engineering, Independent Testing and Validation Services, IT Infrastructure Services and Business Process Outsourcing.

From the Chairmans Desk

Infosys follow PSPD model of Operations. PSPD stands for Predictability of revenues, Sustainability of such predictability; Profitability of such realized revenue and De-risking. Infosys also follows GDM, Global Delivery Model for quality and timely delivery and deployment of its services and products. Also with the changing markets it has changed its pricing models. NEM, New Engagement Model has replaced the Fixed Price Model for many of its projects We also believe that innovation is the best instrument to obtain a sustained differentiation and to perform at global levels.

Challenges Faced
Some part of the business is getting commoditized. Price war threat from established and new service provider. Human resource gap. High attrition rate. The company faced an attrition of 17.5% in the October-December 2010 quarter much higher than the market leader TCS faced i.e 14.4% in the same period.

Weakness
Infosys is showing Stagnant Growth Rate from last few quarters. Infosys was showing a downward trend when its rivals TCS, Cognizant and HCL were consistently delivering growth- be it through increasing share of clients wallets or aggressively pitching large buyouts, something Infosys has always overlooked. Although there has been a silver lining if we consider of the last quarters results, which records 10% growth rate. Top management uncertainties. Infosys is losing sheen due to uncertainty related to top management changes and low profit margins as a result of wage hikes and currency volatility.

Future plans
Organizational changes towards creating Infosys 3.0 a truly global enterprise which includes regrouping existing industry units globally into the following groups has already started: Financial Services and Insurance(FSI) Manufacturing(MFG) Energy, Utilities, Communications and Services(EUS) Retail, Consumer Packaged Goods, Logistics and Life Sciences (RCL)

It will help sharpen the industry vertical focus, allow it to invest in capabilities to deliver higher business value and align innovation agenda with clients. QUANTITATIVE ANALYSIS

Hiring trends
Infosys has added 17,024 (net) and 43,120 (gross) employees in the year 2010. Taking the total strength of the Infosys group to 1,30,820 from 1,13,796 at the end of previous year. Infosys and its subsidiaries have 141,822 employees as on September 30, 2011.

Competitive advances
Finacle: It is a universal banking solution, partners with banks across the globe to power their innovation agenda enabling them to differentiate their products and services thereby enhancing customer experience and achieving greater operational efficiency. FinacleTM is a comprehensive, flexible and fully web-enabled solution that addresses the core banking, treasury, wealth management, Islamic banking, consumer and corporate e-banking, direct banking, financial inclusion and mobile banking requirements of universal, retail and corporate banks worldwide. ENCORE : An initiative to promote reuse and reduce cycle time by creating and deploying reusable technical and business components. Other such initiatives are i-Trim , Proso++, BrIT

Business (in terms of volume)

Companys total income has increased to Rs.25,385 crore from Rs. 21,140 crore in the previous year, at a growth rate of 20.1%.

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The software export revenues aggregated to Rs. 24,791 crore, up by 18.8% from Rs. 20,871 crore in the previous year. Out of the total revenue 66.2% came from North America, 20.7% from Europe and 10.7% from the Rest of the World.

Balance sheet
Net worth of the company in mar 07 was 11,162 crore and has become more than double in 5 years to 24,501 crore facing recession.

IPO
Infosys made an initial public offer in February 1993 and was listed on stock exchanges in India in June 1993. Trading opened at Rs. 145 per share compared to the IPO price of Rs. 95 per share. In October 1994, Infosys made a private placement of 5,50,000 shares at Rs. 450 each to Foreign Institutional Investors (FIIs), Financial Institutions (FIs) and Corporate. During March 1999, Infosys issued 20,70,000 ADSs (equivalent to 10,35,000 equity shares of par value of Rs. 10 each) at $34 per ADS under the American Depositary Shares Program and the same were listed on the NASDAQ National Market Number of shares (June 30, 2011) 571,354,092 Market capitalization (June 30, 2011) (Rs. Crore) 159,429

Tata Consultancy Services

History
TCS was formed in July 1998 to address demand from mid-sized businesses for a cost-effective, user-friendly, and highly flexible financial management package capable of scaling with a growing organization with revenue of INR 37325 crore(FY 11).

Achievements
TCS included in Dow Jones Sustainability World Index 2010 as one ofthe three Indian companies. DataQuest Best Employer Award in India TCS rated Level A+ for its Sustainability Report by Global Reporting Initiative.

Offering span
Custom application development, application management, migration and re-engineering, system integration testing, performance engineering, It service desk, datacentre management services, enduser computing services, application management services, transformation solution, platform BPO solutions, business intelligence and performance management, iON small and medium business solutions, Tcs BaNCS (provide solutions for banks, capital market firms, insurance companies and diversified financial institutions).

From the Directors desk: 11

We would focus on growth, invest in potential work force, employees and IT tools that will help to excel and perform well. Company is always a pioneer when it comes to opening up new markets and geographies or introducing new business models and will continue to do so. TCS will focus on increasing its solution-set to address larger segments of the market as well as grow the scale and scope of operations in each market. Continuation of development of strategic units which are focused on the creation of Intellectual Property and use of new technologies like cloud computing to deliver new operating models to existing and new customer segments.

Acquisitions and Alliances

In addition to sustaining strong organic growth, the Company continues to closely look at acquisitions that are strategic in nature. Some of the key strategic acquisitions done over the years that have created new capabilities within the Company and to yield synergistic growth are: MahaOnline Limited Diligenta 2 Limited(formerly known as Unisys Insurance Services Limited) MS CJV Investments Corporation Retail FullServe Limited (formerly known as SUPERVALU Services India Private Limited)

Challenges
To maintain the market Leader position owing to competition given by market challengers like (Infosys,Wipro). Human resource gap is a challenge that is faced by industry as a whole which is aggravated by double digit iteration rate of 14.4%.

Future prospects
Platform based BPO is one of the Companys strategic initiatives to,drive non-linear growth in the future. iON: Its integrated information technology solution for small and medium businesses (SMBs) rd that works on a pay-per-use model.Its a 3 Generation service delivery model using cloud computing.

CSR Activity TCS focuses on empowering the community, especially through work with youth, women and children. Where 6,600 TCS volunteers and families provided education and skills development to 10,225 children. Major CS Initiatives through Information Technology (IT):Med Mantra:Computer based Functional Literacy programme. Human Resource Development

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TCS is the largest private sector employer in India with total employee strength of 1,98,614.The percentage of women working for the company is 30.30%. The attrition rate stands at 14.1% which is lower than the average of IT industries in India. The company has been successful in building a performance oriented culture with high levels of engagement and empowerment in an environment of teamwork. Quality Initiatives CMMI level 5 certified For CMMI-DEV (Development) and CMMI-SVC (Services) models.TCS was recommended for continuation of its enterprise-wide certification for ISO 9001:2008 (Quality Management), ISO 27001:2005 (Security Management) and ISO 20000:2005 (Service Management). QUANTITATIVE ANALYSIS

Business in terms of volume

Revenues up by 24.3% @37325 crores while core IT services has double digit growth other service sector has also shown the same trend. Assurance services 67% Infrastructure management 40% Global consulting 41% Intellectual property based product business 38% This helped the company in achieving industry leading performance for fiscal year 2011.

Balance sheet
On consolidated basis for the year 2010-11, revenues at 37,324.51 crores were higher by 24.30% over the previous years revenues of 30,028.92 crores. Operating profit (profit before taxes excluding other income) at ` 10,416.62 crores was higher by 29.92% over the previous years operating profit of 8,017.56 crores. Net profit for the year at 9,068.04 crores was higher by 29.53% over the previous years net profit of 7,000.64 crores.

IPO
TCS to issued 55,452,600 equity shares at INR 850 per share on aug 2004. Present Share prices: 1018 INR per share with stock volume of 1120117

Cognizant Technology Solutions

History
Cognizant Technology Solutions is a multinational IT consulting and service corporation headquartered in Teaneck, New Jersey, United States. It was founded by Kumar Mahadeva at Chennai, in the year 1994. It is a member of NASDAQ-100, the S&P-500and Fortune-500. Cognizant has been named to Fortune magazine's 100 Fastest-Growing Companies list for nine consecutive

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years, including 2010, and it was ranked first in the "All-Stars" list of 16 companies that appear on the fastest-growing list year after year. Key Dates 1994: Started as the technology arm of The Dun & Bradstreet Corporation 1996: Began adding third-party clients and servicing the best across industry segments 1998: Became first IT-company leveraging India to be listed on the NASDAQ 2002: Became the first company to be assessed enterprise-wide against mature industry-process certifications, such as P-CMM level 5, BS 7799, SEI-CMMi Level 5 2004: Acknowledged as a leading provider of IT services by industry analysts such as Gartner, Forrester, AMR and IDC; added to the prestigious NASDAQ 100 Index 2006: Became the fastest global IT services company to reach a $1 billion run-rate (under 12 years) 2007: Acquired Market Rx, Inc., a leading provider of analytics and related software services to global life sciences companies; crossed $2 billion revenue threshold 2008: Entered Fortune 1000; established global systems-integration relationship with T-Systems; formally inaugurated near shore delivery centers in Argentina and Hungary; exceeded $2.8 billion revenue mark 2009: Joined Fortune's "Most Admired Companies" list; named to Business-Week 50 list of the topperforming U.S. companies for third consecutive year; named to Forbes "25 Fastest Growing Technology Companies In America" list for sixth straight year 2010: Selected for Fortunes Most Admired Companies list for the second year in a row; placed in Top 5 for IT services

Recent Milestones
In August 2010, Cognizant made it for the 8th consecutive year to Fortunes 100 Fastest Growing Companies list, the only company to achieve this feat. Cognizant was ranked first in the publications list of Fastest Growing All Stars. In December 2010, Cognizant crossed the 100,000 employee mark. Interestingly, it took Cognizant 12 years to reach the first 25,000 employee mark. It added more than 25,000 employees in calendar year 2010 alone. In 2010, notwithstanding a challenging economic environment, Cognizant ascended a whopping 122 places on the prestigious Fortune 1000 list

Recent Awards and Recognition Barrons 500 Americas Top Companies (May 2011) Fortune 500 (May 2011) Forbes Global 1000 company (April 2011) Fortunes World's Most Admired Companies (March 2011) Institutional Investor All-America Executive Team (January 2011) Fortunes 100 Supercharged Performers and All-Star List(September 2010)

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From the Directors Desk

Cognizant follows certain strategies and focuses on critical areas to lay good foundation for the longterm growth and sustained future success: Further development of long-term customer relationship Expansion of service offerings and solutions Enhancing processes, methodologies and productivity toolset Expanding domestic and International Geographical presences Pursuing selective strategic Acquisitions, joint ventures and strategic Alliances.

Favourable and Unfavourable conditions

Type of factors

Favourable Conditions

Unfavourable conditions

Internal Factors

Strengths Robust financial performance Well established 3G network base in Europe; growing in the US Strong brand equity and recognition in Europe and the US Strong offshore development capability Alliances with industry leading corporations in mobile services & technologies Steadily growing customer base

Weaknesses No presence in key emerging markets Dependence on the financial services sector Steady decline in average revenue per user (ARPU)

External Factors

Opportunities Mobile internet expansion Free Moving Alliances Increasing 3G network coverage in the US First to introduce Google-based phone in the US (Android) Strategic partnerships Positive outlook for health care IT spending Acquisition of Strategic Vision

Threats Immigration restrictions Anti-outsourcing legislation European Union regulation on crossborder cell phone usage by customers Dependence on large customers Economic slowdown in the European Union, US Intensifying competition & consolidation in the US market (AT&T, Sprint)

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Consulting

Future Plans
Cognizant is to focus on Dubaito gain share of $18b market: It would focus on the UAE market for outsourced testing services in a move to gain an increased share of the global testing services market estimated to reach $17.7 billion by 2013. It is to continue its expansion in other cities across India through leasing of space in those cities and indeed in cities around the world like the recent announcement to expand its facility in Phoenix in the United States to accommodate another thousand employees. Cognizant have a very broad based plan to expand facilities not just in India but around the world to accommodate increasing growth over the next few years.

Hiring Trends
Four main trends of Cognizant which are now making work increasingly dynamic: Globalization: Work, of all forms, is migrating to its right location worldwide, allowing companies to leverage expertise anywhere and everywhere it resides. The Millennial Mindset: Digital natives, both as employees and customers, are creating new social and operating norms for companies, worldwide. Transparent Technology: Cloud computing, social networking, broadband, and mobility are enabling new business and technology models that improve operational flexibility and knowledge sharing. Virtualization: The virtualization of technology, business processes, and organizational structures is giving rise to the anytime, anywhere worker and causing organizations to rethink how they operate in a world where not every asset needs to be physically welded into their business.

Cognizant is fully committed to expand its existing solution portfolio to include cloud delivery options for its customers. It believes that cloud-enabled next-generation sourcing solutions will be a source of significant value for its clients now and in the future, and they are making significant investment in alliances, skills, and new technologies to help bring this about. It has a core team of Cognizant veterans, strategists, and industry experts to drive its cloud program, including a Chief Technology Officer exclusively for its cloud program. QUANTITATIVE ANALYSIS

During Recession
In the year 2009 almost every company had an effect on their financial performance. Even Cognizant faced the effect. But, the impact of global recession was very less on it. As a result in the fiscal year 2009 there was a little increase in the annual revenue. The revenue increased to $3,278.7 million from $2,816.3 million of fiscal year 2008. Net income increased from $430.8 million, or 1.44 per diluted share, included stock-based compensation expense and stock-based Indian fringe benefit tax expense net of tax of $0.15 per diluted share during 2008 to $535 million or $1.78 per diluted share,

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including stock based compensation expense and stock-based Indian fringe benefit tax expense net of tax of $0.12 per diluted share during fiscal year 2009. The major steps taken by Cognizant in the recession period Made a strong performance within its healthcare and manufacturing, Retail and Logistics business segments, each of which had revenue growth equal to or greater than 25.0% It increased the penetration of the European market where it experienced revenue growth of 12.1% and success with its recent entry in the Asian markets where it grew by 65.9% , in 2009 when compared to fiscal year 2008 It made a strong performance in the North America where it experienced growth of 16.4% in 2009 when compare to the fiscal year 2008 It expanded its service offerings, which enabled us to cross-sell new services to its customers and meet the rapidly growing demand for complex large-scale outsourcing solutions. It increased its penetration at existing customers, including strategic customers It increased the customer spending on post-acquisition integration engagements and discretionary development projects It continued expansion of the market for global delivery if IT services and business process outsourcing.

Recent Balance sheet

In the year 2010 , its revenue increased to $4,592.4 million compared to $3,278.7 million in 2009.Net Income was increased to $733.5 million or $2.37 per diluted share, including stock-based compensation expense, net of tax, equal to $0.14 per diluted share during fiscal year 2010 ,and where as the net Income was $535million or $1.78 per diluted share, including stock-based compensation expense and applicable stock based Indian fringe benefit tax expense, net tax, of $0.12 per diluted share during fiscal year 2009. The key factors for the growth of revenue in 2010 Strong performance across all business segments with revenue growth ranging from 36.8% for health care to 50.4$ for manufacturing, retail and logistics as compared to the year 2009. Continuation of penetration of the European market, particularly in the UK where it experienced revenue growth of 58% as compared to 2009.

IPO
In June 1998, Cognizant Technology Solutions conducted an initial public offering (IPO) of stock. The timing proved to be less than ideal, as market conditions were poor for IPOs. As a result, Cognizant was offering 2.92 million shares of common stock and only able to sell shares at $10, instead of the $11 to $13 the company and its underwriters had hoped it would fetch to $22m after costs. In late trading, however the share volume was only a little more than a million shares and the day's high was only $10.50. The market for IPOs has been weak of late, with few companies seeing shares soar on the first day of trading. As on 24 Oct 2011, the opening stock was $70.13 and the closing stock was $71.44, with the highest price for the day $ 72.3.
th

Product Development, Engineering and R&D

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Microsoft Inc.

History
Microsoft was officially established on April 4, 1975, with Gates as the CEO. In August 1977 the company formed an agreement with ASCII Magazine in Japan, resulting in its first international office, "ASCII Microsoft". The company moved to a new home in Bellevue, Washington in January 1979. 19841994: Windows and Office 19952005: Internet and the 32-bit era 2006present: Vista and Cloud computing

QUALITATIVE ANALYSIS Recent Milestones

Microsoft Office 2010 Hits Major Milestone and Entered Technical PreviewWith its unique position in the industry, Microsofts solutions is bringing the benefits of the cloud to the billion people who use computing today and the billions more who will gain access to digital technology for the first time in the years ahead. In fiscal 2010, Microsoft invested $8.7 billion in research and development, with most of that devoted to cloud technologies. Today, roughly 70 percent of Microsofts 40,000 engineers work on cloud-related products and services, and in fiscal 2011 that number will grow to nearly 90 percent. With the first version of Hotmail, Microsoft started investing in cloud computing more than 15 years ago. Today, their consumer cloud technologies and services support hundreds of millions of customers around the globe. More than 300 million people use Windows Live Hotmail and Windows Live Messenger to send nearly 10 billion messages every day. This year, Xbox LIVE subscription base surpassed 25 million subscribers, a growth of over 20 percent from last year.

From Directors Desk

For Microsoft there are three critical areas that lay the foundation for long-term growth and sustained future success: Commitment to cloud computing. A product portfolio that is stronger than ever. A Record Setting Financial performance.

Challenges
Piracy Cost Microsoft's three-decade dominance is under threat from traditional competitors, such as Apple, and newer players like Google.

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While Windows still powers the vast majority of desktops and laptops, the emergence of mobile devices and increasing reliance on the Internet have shown consumers and businesses alike that much of what we call personal computing can be done without touching a single Microsoft product. Earlier Microsoft's Internet Explorer commanded greater than 90 percent of market share, dominating the Web browser market as much as Windows dominates PCs today. The Microsoft monopoly earned itself antitrust penalties by beating Netscape into submission, but it wasn't until the rise of Mozilla's Firefox (a descendant of Netscape) and Google's Chrome that the monopoly was broken.

Strengths
Microsoft is almost unmovable Even if not preinstalled on their systems customers will still require it. If Microsoft is closed the economic impact would be terrible.

Future Plans
Microsoft will be patenting soon, Fast Machine Booting through Streaming Storage, which details a method of booting a virtual PC operating system through remote storage. The patent covers a variety of devices from laptop devices to set top boxes and minicomputers. Microsofts idea is based on virtual storage systems. Microsoft describes the method as a technology that facilitates fast boot because the virtual disk is available for use immediately, rather than needing to download an entire operating system image before booting from that downloaded image. Nokia and Microsoft have also announced plans to form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem. Both intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers unrivalled choice and opportunity. As each company would focus on its core competencies, the partnership would create the opportunity for rapid time to market execution. Microsoft will invest an additional $150 million to expand its new data center in southern Virginia, continuing a series of expansion announcements that hint at a dramatic scaling up of Microsofts cloud computing capacity. Microsoft will build a second data center facility and add 21 megawatts of power capacity at its new location in Boydton, Virginia, even as it is still completing the $499 million first phase of the project.

Moving Quickly To Add Capacity Microsofts data centers are a key component in a major business shift at the company, which is expanding beyond its traditional desktop software business to offer cloud computing services, in which Microsofts applications will be hosted in its data centers and delivered over the Internet. Major Internet companies like Google, Yahoo and Facebook typically build multiple facilities at a single location, but usually deploy one phase at a time. Microsofts recent moves to expand in multiple sites suggests it will need more data center space sooner rather than later. Microsofts next Windows version will include cloud network integration. Early builds of Windows 8 suggest that Microsoft is planning to introduce settings synchronization to the Windows Live Cloud

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network. Windows 8 allows users to link their Windows Live Profile to a Windows 8 account to sync application settings, desktop customizations and a variety of other settings. The Future Of Kinect: How Microsoft Plans To Put A Video Game Controller In Everything Microsoft promised when they launched the $US150 Xbox 360 Kinect add-on this week that it would make you the controller.

QUANTITATIVE ANALYSIS Hiring Trends

A Recent study by International Data Corp. (IDC) found that the global technology industry, the software sector, and Microsofts business create millions of jobs around the world and drive local economic growth. Continue to support the employment of approximately 15 million people worldwide through our partner-based business model. Work with governments to create regulation, infrastructure, and skills that support the growth of local software businesses. Develop Biz Spark opportunities for 60,000 new ventures by the end of fiscal year 2011.

During Recession
The global recession had a major impact on the financial performance of companies around the world in virtually every industry in 2009, and Microsoft was no exception. As consumers and businesses reset their spending at lower levels, PC sales and corporate IT investments fell. As a result, Microsoft saw its first-ever drop in annual revenue, from $60.4 billion in fiscal 2008 to $58.4 billion in fiscal 2009, a decline of 3 percent. Operating income was $20.4 billion, down 9 percent. Earnings per share fell 13 percent to $1.62. During fiscal 2009, they made a number of strategic acquisitions, including the interactive online gaming company BigPark; DATAllegro, a provider of breakthrough data warehouse technologies; and Zoomix, which develops software that automates the delivery and synchronization of enterprise data. They also acquired Powerset, a pioneer of the use of natural language processing in online search, and Greenfield Online, a leader in comparison shopping technology. A Strong Response to a Difficult Economic Climate The global recession created difficult challenges for Microsoft, but it also created significant opportunities. Since Microsoft offers a wide range of affordable, high-quality products it is well-positioned to weather the economic downturn and gain market share. As the global economy begins to recover, this will create new opportunities to increase revenue. Microsofts focus was on finding opportunities to cut costs and use resources more effectively. They reduced expenses by more than $3 billion compared with our original fiscal 2009 plan and we remain committed to controlling costs in fiscal 2010. During fiscal 2009, they also made important adjustments to cost structure through strategic job eliminations. The decision to eliminate up to 5,000 jobs was very difficult, but it was the right move because it has enabled to focus resources where they can deliver the greatest results for the company. And they still continued to recruit and hire the best talent from around the globe.

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Finally they announced a new $40 billion program in early fiscal 2009 to repurchase shares of their stock and increased the quarterly dividend. They also returned nearly $14 billion to shareholders through stock buybacks and dividends during the fiscal year. Microsoft also took advantage of favorable market conditions in fiscal 2009 to authorize a $3.75 billion debt offering. As part of the debt authorization, Microsoft received a AAA credit rating from Standard & Poors, becoming the first U.S. corporation in a decade to be assigned S&Ps highest rating.

Recent Balance sheet:

For the year, revenue reached a record of $62.5 billion, an increase of 7 percent compared with the previous fiscal year. Operating income grew by 18 percent to $24.1 billion. Diluted earnings per share jumped 30 percent to $2.10 and we returned almost $16 billion to shareholders through stock buybacks and dividends. These outstanding results reflect the strong product momentum across the entire company. In addition, operating income grew more quickly than overall revenue during each quarter of fiscal 2010, which shows that Microsoft has maintained a tight focus on controlling expenses.

IPO
Microsoft went public and launched its initial public offering (IPO) in 1986, the opening stock price was $21; after the trading day, the price closed at $27.75. As of July 2010, with the company's nine stock splits, any IPO shares would be multiplied by 288; if one was to buy the IPO today given the splits and other factors, it would cost about 9 cents. The stock price peaked in 1999 at around $119 ($60.928 adjusting for splits). The company began to offer a dividend on January 16, 2003, starting at eight cents per share for the fiscal year followed by a dividend of sixteen cents per share the subsequent year, switching from yearly to quarterly dividends in 2005 with eight cents a share per quarter and a special one-time payout of three dollars per share for the second quarter of the fiscal year. Though the company had subsequent increases in dividend payouts, the price of Microsoft's stock remained steady for years

Google Inc.

History
Google began in January 1996 as a research project by Larry Page and Sergey Brin when they were both PhD students at Stanford University in California. While conventional search engines ranked results by counting how many times the search terms appeared on the page, the two theorized about a better system that analyzed the relationships between websites. They called this new technology PageRank, where a website's relevance was determined by the number of pages, and the importance of those pages, that linked back to the original site. The domain name for Google was registered on September 15, 1997, and the company was incorporated on September 4, 1998. It was based in a friend's (Susan Wojcicki) garage in Menlo Park, California. Craig Silverstein, a fellow PhD student at Stanford, was hired as the first employee. In May 2011, unique visitors of Google surpassed the 1 billion mark for the first time, an 8.4 percent increase from a year ago with 931 million unique visitors.

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QUALITATIVE ANALYSIS Recent Milestones

Larry and Brin have always shared a profound belief in the potential for technology to make the world a better place. It's why they have been prepared, from the get-go, to place big bets on new technologies.with the full knowledge that not all of these will always pay off. In the last year Google Wave fail, but Chrome succeeded beyond what they thought was possible. Chrome (Googles web browser) was released two and a half years ago. Today, at version 10 Chrome is over six times faster than it was then and over 120 million people now use it. Whats more, its helping push browser standards forward everywhere. From Directors Desk Google is a global technology leader focused on improving the ways people connect with information. We aspire to build products that improve the lives of billions of people globally. Our mission is to organize the worlds information and make it universally accessible and useful. Our innovations in web search and advertising have made our website a top internet property and our brand one of the most recognized in the world. We generate revenue primarily by delivering relevant, cost-effective online advertising. Businesses use our AdWords program to promote their products and services with targeted advertising. In addition, the third parties that comprise the Google Network use our AdSense program to deliver relevant ads that generate revenue and enhance the user experience. We were incorporated in California in September 1998 and reincorporated in Delaware in August 2003. Our headquarters are located at 1600 Amphitheatre Parkway, Mountain View, California 94043, and our telephone number is (650) 253-0000. We completed our initial public offering in August 2004 and our Class A common stock is listed on the Nasdaq Global Select Market under the symbol GOOG.

Challenges
General purpose search engines, such as Yahoo and Microsofts Bing Vertical search engines and e-commerce websites, such as Kayak (travel queries), Monster.com (job queries), WebMD (for health queries), and Amazon.com and eBay (ecommerce) Social networks, such as Facebook and Twitter. Some users are relying more on social networks for product or service referrals, rather than seeking information through general purpose search engines. Other forms of advertising, such as television, radio, newspapers, magazines, billboards, and yellow pages, for ad dollars. Our advertisers typically advertise in multiple media, both online and offline. Commercial software companies, such as Microsoft and Apple, and mobile applications.. Providers of online products and services. A number of our online products and services, including Gmail, YouTube, and Google Docs, compete directly with new and established companies.

Risks involved in business are: They face intense competition.

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If they do not continue to innovate and provide products and services that are useful to users, they may not remain competitive, and their revenues and operating results could suffer. Ongoing investment in new business strategies and new products, services, and technologies is inherently risky, and could disrupt our ongoing businesses. They generate our revenues almost entirely from advertising, and the reduction in spending by or loss of advertisers could seriously harm their business. They expect their revenue growth rate to decline and anticipate downward pressure on their operating margin in the future. They are subject to increased regulatory scrutiny that may negatively impact their business. They are involved in legal proceedings that may result in adverse outcomes. Their business depends on a strong brand, and failing to maintain and enhance our brand would hurt our ability to expand our base of users, advertisers, Google Network members, and other partners.

Strengths
One advantage Google may have is public perception. Part of Google's philosophy is "you can make money without doing evil" .Google has built a reputation on innovation and customer service. The company's headquarters -- the Googleplex -- is famous for its unique amenities and offices. Google's position on the Web is solid. According to the analysis firm Efficient Frontier, Google held 75 percent of the search engine advertisement market in first quarter 2010. Gmail, Google's Web-based e-mail shows steady growth, up 27 percent from 2009 to 2010, while the reigning Yahoo Mail is losing ground [source: Saint and Angelova]. In addition to its search engine, Google offers consumers online productivity software, video and photo sharing services and mapping applications. Google has worked its way into the OS market with its mobile platform Android and its Web-based OS project Chromium. Google seems to have a great deal of momentum. The company has a reputation for innovation. It's famous for giving employees 20 percent of their work week to pursue special projects. Many of these special projects end up in Google Labs, a special section on Google that allows users to experiment with new services. Eventually, these services may graduate into fully-realized products from Google. A key strategy for Google is to seek out smaller companies that are good at creating certain products or services and then either partner with them or buy them outright. In 2005, Google purchased 15 companies for a total of $85 million. These companies ranged from an analytics start-up called Urchin to a 3-D drawing application called SketchUp [source: Google]. One of Google's largest acquisition deals was for the online advertising company DoubleClick. Google purchased DoubleClick in 2007 for $3.1 billion [source: Economic Times]. Google has also formed partnerships with companies like AOL, NBC and the DISH Network. Most of these deals focus on online or over-the-air advertising.

QUANTITATIVE ANALYSIS

Hiring Trends
Despite rapid growth, they still cherish their roots as a start-up and give employees the freedom to act on their ideas regardless of role or function within the company. Google strives to hire the best employees, with backgrounds and perspectives as diverse as their global users. At December 31, 2010, they had 24,400 full-time employees, consisting of 9,508 in research and development, 8,778 in

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sales and marketing, 3,346 in general and administrative, and 2,768 in operations. All of Googles employees are also equity holders, with significant collective employee ownership.

During Recession
The company's first quarter-on-quarter sales decline shows even the mighty search giant isn't immune to the pullback in ad spending Even Google could not escape the recession. With its first-quarter results on Apr. 16, the leader in Web search revealed its first quarter-on-quarter decline in sales, reflecting cutbacks in online ad spending. Thanks to cost cutting, Google (GOOG) handily beat profit expectations, but it offered no assurance that overall business conditions would turn around anytime soon. Google's revenue, almost all of which comes from advertisements placed next to related search results, rose 6% from a year earlier but slipped 3% from the fourth quarter. Sales, after subtracting commissions to Web site partners, were $4.07 billion. Investors initially liked what they saw, boosting the stock almost 6% in extended trading after the figures were released. But as it became apparent that Google's underlying business was feeling the effects of the recession, shares reversed course and gained only a fraction of 1%. "The quarter confirms that Google is suffering from the economic slowdown," says Sandeep Aggarwal, analyst at financial-services firm Collins Stewart. No Rebound Yet In comments during a conference call with analysts, Google executives, who didn't provide formal earnings guidance, were muted in their outlook. They noted that the second and third quarters were usually "seasonally weak," implying they saw little scope for a rebound, at least for then. "We're still basically in uncharted territory" in the overall economy, Google Chief Executive Eric Schmidt said, repeating a phrase he used in the previous quarter. "The economic environmentremains tough. Google absolutely feels the impact."Google's reluctance to discuss the outlook for Web advertising echoes the unwillingness of chipmaker Intel (INTC) to issue a forecast when announcing its firstquarter results. As uncertain as the market remains, Google's stock has been on a tear lately. Before rising 2.4% on Apr. 16 ahead of the earnings report, to 388.74 a share, the stock had risen 18% since the start of the year and more than 40% since hitting bottom last November. That run came during a period when the Nasdaq gained about 25%. In January, Google reported better-than-expected fourth-quarter results. Slashing Expenditures Noting that Google looks for "breakout technologies," such as Android or Keyhole, or those that have hit "escape velocity," such as YouTube, which Google bought for $1.65 billion. Lawee said: As an entrepreneur, the approach I used to take to getting the attention of big companies was to partner and I would try to create as many viable partnerships with potential acquirers as I could that made sense for my business. I think that approach is still the best way to introduce yourself and to become known within the company or within the tech community. A Strong Response to a Difficult Economic Climate Google announced groundbreaking new projects such as Google Voice, the Chrome operating system, and Google Wave. These projects, which have been brewing for as many as five years now, are major growth opportunities for a company whose core search business is beginning to plateau. While some companies have chosen to stop work on major, untested new projects, Google has opted to charge forward and is planting a number of important seeds for its future.

Recent Balance Sheet 24

The notional principal of foreign exchange contracts to purchase U.S. dollars with foreign currencies was $2.4 billion and $1.0 billion at December 31, 2009 and 2010. The notional principal of foreign exchange contracts to sell U.S. dollars for foreign currencies were $115 million and $84 million at December 31, 2009 and 2010. The notional principal of foreign exchange contracts to purchase Euros with other currencies was 618 million (or approximately $889 million) and 991 million (or approximately $1.3 billion) at December 31, 2009 and 2010. The notional principal of foreign exchange contracts to sell Euros for other foreign currencies was 8 million (or approximately $11 million) and 6 million (or approximately $8 million) at December 31, 2009 and 2010.

IPO
Google's initial public offering (IPO) took place five years later on August 19, 2004. The company offered 19,605,052 shares at a price of $85 per share. Shares were sold in a unique online auction format using a system built by Morgan Stanley and Credit Suisse, underwriters for the deal. The sale of $1.67 billion gave Google a market capitalization of more than $23 billion. The vast majority of the 271 million shares remained under the control of Google, and many Google employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited because it owned 8.4 million shares of Google before the IPO took place.

ADOBE

History
Adobe Systems Incorporated is an American computer software company founded in December 1982 by John Warnock and Charles Geschke, who established the company after leaving Xerox PARC in order to develop and sell the PostScript page description language. Its head-quarter is in San Jose, California, United States. This company has historically focused upon the creation of multimedia and creativity software products, with a more-recent foray towards rich Internet application software development.

Innovations and Recent Milestones

Adobe 2010 Milestones: In 2010, Adobe announced that it was investigating a "coordinated attack" against corporate network systems in China, managed by the company. The same attack was even brought against Google and over 20 other companies. Adobe launched a new Creative Suite series (CS5) on April 12, 2010. And it also announced other New Software such as Flash Catalyst and Business Catalyst. In 2010, Adobe was marked by continuing a back-and-forth argument with Apple over the latters non-support for Adobe Flash on its iPhone, iPad and other products. Adobe in 2011: Adobe acquired Demdex in January 2011, Inc with the intent of adding Demdex's audience-optimization software to its online marketing suite. Adobe unveiled a new mobile photo service in 2011. A new application named Carousel for iPhone, iPad and Mac that uses Photoshop Lightroom technology for users to adjust and fine-tune images on all kinds of platforms.

From Directors Desk

Adobe focuses the majority of its philanthropic resources on Adobe Youth Voices, and the signature initiative of the Adobe Foundation. Adobe Youth voices empowers youth in underserved communities st around the globe with all real-world experiences and tools of 21 century to communicate their ideas and views, exhibit their potentials, and takes actions in their communities. The projects global network currently includes more than 500 sites, as well as grantees and organizations in 32 countries, engaging more than 27,000 youth and 1500 educators.

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Adobe is seeing that it behooves to involve the community in the development of the next generation of applications. Maintaining Transparency about its plans enables it to get better feedback so that they can deliver better solutions to its customers.

Favorable and Unfavorable Conditions

Type of factors Favorable Conditions Internal Factors Strengths A Diversified revenue base A Strong balance sheet A Strong market position in digital media business. Opportunities Increase in the use of internet The Growth of digital devices market Launching of new products Unfavorable conditions Weaknesses Very weak in advertising A Decline in profitability of the company Threats Overdependence upon Windows and Macintosh An Intense competition of other companies A High reliance on distt.

External Factors

Future Plans
The distinction between eLearning and traditional learning is blurring as technology continues to pervade all facets of contemporary life. Adobe will continue to develop and advance rapid eLearning tools such as Acrobat, Acrobat Connect, and Adobe Captivate, industry leading traditional eLearning tools such as Flash, Dreamweaver and Director, and engaging asset creation tools such as Photoshop Elements and Adobe Premiere Elements software. The eLearning market has transitioned to Adobe Flash and Adobe Captivate software over the years. Author-ware is a mature product and demand has continually declined to where it is no longer economically viable for Adobe to continue development. There will be no future updates to Authorware. But, Adobe will continue to sell the current Author-ware 7 version and Adobe will continue to honor its existing support commitments.

Hiring Trends
The continuous success of Adobe is predicted on its ability to forecast emerging trends and made favorable position for its future. It is focusing on three fundamental trends that stand out as drivers of its opportunities for its business. The first trend is Adobe expanding in number and diversity of screens in the marketplace. The multiscreen revolution is transforming both how content is consumed and the technical complexity of how that content is produced, particularly for designers and developers.

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The second major trend is witnessing the increased relevance of data-driven marketing. Every business has or will have an online presence, giving them unprecendented opportunities to track, collect, and analyze large quantities of data about their content, advertisements, and audience. The third shift we see is a marked transition in the enterprise space from investment in back-end infrastructure to a focus on the experience of the customer and end-user customers are raising the bar of their expectations, demanding a better user experience, mobile access, integration with social networks, and more.

QUANTITATIVE ANALYSIS During Recession

The effect of the global recession on Adobe made the company to lay off 600 employees, which is about 8% of its total employees around the world, and there was a huge down fall in its financial performance. The company recorded revenues of $2,945.9 million during the financial year ended November 2009, a decrease of 17.7% over 2008. The decrease in revenues was due to impact of the global economic recession and weak macroeconomic environment, which resulted in a decline in product revenues. The operating profit of the company was $690.5 million in Financial Year 2009, a decrease of 32.8% of operating profit over financial year 2008. In fiscal 2009, it categorized its products and services into the following businesses: Creative Solutions, Business Productivity Solutions, Platform and Print and Publishing. It further broke its Business Productivity Solutions business into two reported segments: Knowledge Worker and Enterprise. With its acquisition of Omniture, Inc. (Omniture) in the fourth quarter of its fiscal 2009, It created and added a new segment called Omniture for the purpose of reporting Omniture results.

Recent Balance Sheet

The company recorded revenues of $3,800 million during the financial year 2010 , an increase of 29% over 2009. The strong growth was primarily driven by continued adoption of its flagship product family CS5, which began shipping in the second quarter of Financial Year 2010 coupled with good performance in other key business segments. The operating profit of the company was $993.1 million in Financial Year 2010, an increase of 43.8% over 2009. Its net profit was $774.7 million in Financial Year2010, compared to $387 million in 2009. These outstanding results reflect the strong product momentum across the entire company. In addition, operating income grew more quickly than overall revenue during each quarter of fiscal 2010, which shows that Adobe maintained a tight focus on controlling expenses. IPO Adobe after its establishment, Less than two decades later, came out with annual sales exceeding $1 billion, Adobe held the third-place spot among the largest PC software companies in the United States. The firm emerged in the mid-1980s as a major force in desktop publishing and in the late1990s as a leader in Web authoring tools and other Internet publishing technology. Adobe's stock has split six times since going public in 1986. The company's shares split 2-for-1 on May 23, 2005, October 24, 2000, October 26, 1999, August 10, 1993, November 22, 1988, and March 11, 1987. Until 2005, Adobe paid a dividend on its stock. The most recent dividend of $0.0125 was paid to shareholders in April 2005.

IT Enabled Services

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Genpact
History Genpact began in 1997 as a business unit within GE, with the name GECIS, to provide business process services to GEs businesses, with the goal of enabling outstanding efficiencies. In the next few years Genpact earned the opportunity to manage a wide range of processes from the simple to complex, operating across GEs financial-services and manufacturing businesses. In January 2005, Genpact became an independent company bringing its process expertise and unique DNA in Lean Six Sigma to clients outside the GE family. In August 2007, Genpact was listed on the NYSE under the symbol G. Since then it has grown rapidly, expanding its range of services and diversifying their client base.

QUALITATIVE ANALYSIS

Latest Acquisitions
Headstrong, a Virginia-based consulting and IT services company with a specialized focus in financial services, for US $550 Million. EmPower Research, an integrated media and business research company with strong capabilities in social media research and measurement. EmPower management has offices based in New York, Bangalore, Cincinnati, New Jersey, San Francisco and London.

Major Achievements
First to Introduce Scientic and Highly Granular Approach to Process Management - SEP. First to Introduce an Expert Community to Serve the Needs of Process SolutionXchange. First to Introduce a One Button, One Stop Employee Information System. First In the Industry to Apply Six Sigma to Solve Employee issues.

From the Directors Desk

For Genpact CEO,NV Tyagarajan there are three approaches that lay the foundation for long-term growth and sustained future success: We aim at delivering real business results and strategic value to our clients. Our proven customer engagement model, where we start small, deliver value, expand business scope, and gradually penetrate other areas, provides us with growth and longterm revenue visibility. Genpacts culture is uniquely ingrained in Lean Six Sigma, the capability having been driven through the entire organization and leveraged in all we do in a highly visible manner.

Challenges
Genpacts dominance as Indias largest BPO is under threat from competitors, such as TCS and EXL. Change in leadership style as Pramod Bhasin,the ex CEO who build the company has resigned. Cost is a major threat as a lot of competitors are entering the market.

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Strengths One of the lowest attrition rates in the industry. The largest global analytics and research services organization and the technology expertise to enable great processes

Future Plans and Projects

Genpact Limited has been awarded a six-year contract extension by international services company Serco for finance and accounting (F&A) services.Under this new agreement, Genpact will expand the scope of its services to further deploy best-in-class F&A processes for Sercos growing operations while lowering costs.Genpact will be working to drive continuous process improvements for Sercos own Shared Services Center (SSC) organization in the UK, Asia-Pacific and the Middle East. Genpact is specifically handling procure to pay, order to cash, record to report, general accounting, treasury cash management, technical accounting, and payroll processes. Genpact has plans to expand business in Brazil and columbia.Also it plans to double its employee strength in China. Genpact Limited CEO,NV Tyagarajan wishes has set up goals to introduce 2 new IT verticals to the companys business.

Hiring Trends and Training

A Recent study by International Data Corp. (IDC) found that the global technology industry, the ITES sector, and Genpacts business create thousands of jobs around the world and drive local economic growth. Genpacts employee strength has grown to 49000+ in only 14 years. And expanding business in Brazil, Columbia and China means a lot more employees to be hired in the coming year. Genpact has doubled its U.S. workforce in the last 18 months and expects to continue to increase its U.S. workforce through aggressive recruiting initiatives for business development, operations, analytics and reengineering positions. Genpact is filling positions based out of its growing services delivery centers in Danville, Ill., Wilkes-Barre, Pa. and Irvine, California and ten additional U.S. locations. Genpact is focused on providing its employees with leadership training, professional skills training, and numerous courses and professional certifications to strengthen domain expertise and provide higher-level services to its hundreds of U.S.-based clients.

QUANTITATIVE ANALYSIS Recent Financial Results

Revenues were $397.6 million, up 29.3% from $307.6 million in the second quarter of 2010.Revenues from Global Clients were up 44.1% and business process management revenues from Global Clients were up 23.7%. Net income attributable to Genpact Limited shareholders was $39.0 million, up 40.1% from $27.8 million in the second quarter of 2010; net income margin for the second quarter of 2011 was 9.8%, up from 9.1% in the second quarter of 2010. Diluted earnings per common share were $0.17, up 39.3% from $0.12 in the second quarter of 2010. Adjusted income from operations totaled $65.3 million, up 40.1% from $46.6 million in the second quarter of 2010. Adjusted income from operations margin was 16.4%, up from 15.1% in the second quarter of 2010.

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Adjusted diluted earnings per share were $0.22, up 41.9% from $0.15 in the second quarter of 2010.

During Recession
The global recession had a major impact on the financial performance of companies around the world in virtually every industry in 2009, and Genpact was no exception. Genpact relied on improved productivity and disciplined management of costs for improved profitability. It showed margin improvement during 2009 which was a result of a significant investment in growth, including marketing and business development, especially in the second half of the year, and the fourth quarter in particular. Genpact performed reasonably well during the economic slowdown s compared to its competitors and this is visible from their results for the year 2009.

Key Financial Results - Full-Year 2009

Revenues were $1,120.1 million, up 7.6% from 2008. Net income attributable to Genpact Limited shareholders was $127.3 million, up 1.7% from $125.1 million in 2008; net income margin for 2009 was 11.4%, compared to 12.0% in 2008. The effective tax rate was 16.7%, versus 6.6% in 2008. Diluted earnings per common share were $0.58, up from $0.57 per share in 2008. Adjusted income from operations increased 11.6% to $199 million, compared to $178.3 million in 2008. Adjusted income from operations margin was 17.8%, up from 17.1% in 2008. Adjusted diluted earnings per share were $0.73, down from $0.76 in 2008.

EXL

History
EXL is a U.S. company that was incorporated in 1999. Their headquarters are based in New York City and they operate over 20 state-of-the-art delivery centers in India, the Philippines, US, Czech Republic, Romania, Malaysia and Bulgaria with sales offices in New York, New Jersey and London.EXL (NASDAQ: EXLS) is a leading provider of Transformation and Outsourcing services to Global 1000 companies in multiple industries including insurance, banking, financial services, utilities, transportation and travel. Their solutions integrate their knowledge and experience in Decision Analytics, Financial & Risk Management, Operational & Process Excellence, Re-engineering and Integrated Transaction Processing to provide their clients with immediate business impact and long term financial value.

QUALITATIVE ANALYSIS Latest Acquisitions

In May 2011, EXL acquired OPI, one of the last standing pure-play Finance & Accounting Outsourcing (FAO) service providers. InMay 2010, EXL acquired PDMA, Inc., the developer of LifePRO policy administration platform for life, health and annuity insurance. In March 2010, EXL acquired American Express Global Travel Service Centre operations in Gurgaon, India.

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Achievements
Declared top 20 IT-BPO Employers in India in 2010' by NASSCOM. Declared top BPO Employer 2011' by Dataquest.

From the Directors Desk

For EXL Services President and CEO, Rohit Kapoor there are four approaches that lay the foundation for long-term growth and sustained future success. Innovation should be actively pursued Urgency should underline our actions to attain success Integrity should guide our conduct. Respect for human beings should mark our behaviour.

Challenges
EXL is experiencing growth on all fronts and is continually acquiring new companies. Such fast growth requires a very balanced management and extensive process for decision on making. Cost is a major threat as a lot of competitors are entering the market.

Future Plans
Financial Outlook for 2011 The Company is revising its guidance for calendar year 2011 based on current exchange rates: Revenues of between $354.0 million - $358.0 million from $347.0 million - $355.0 million. Adjusted operating margin, excluding the impact of stock-based compensation expense and amortization of intangibles, of between 13.5% - 14.0%.

Hiring Trends and Training

A Recent study by International Data Corp. (IDC) found that the global technology industry, the ITES sector, and EXLs business create thousands of jobs around the world and drive local economic growth. Achieved a milestone in EXL's decision analytics by doubling the number of employees over the last 18 months. Strengthened their global client services and business development teams by hiring four additional Vice Presidents since the beginning of the fourth quarter in 2010. Increased their headcount as of June 30, 2011 to approximately 17,400 compared to approximately 12,200 as of June 30, 2010 and approximately 13,000 as of March 31, 2011. EXL added approximately 3,800 employees as of June 30, 2011 from the acquisition of OPI. Experienced attrition in the second quarter of 32.9% for billable employees compared to 34.6% in the second quarter of 2010 and 32.4% for the first quarter of 2011.

QUANTITATIVE ANALYSIS

Recent Financial Results - Second Quarter 2011

Revenues for the quarter ended June 30, 2011 were $85.0 million compared to $60.6 million for the quarter ended June 30, 2010 and $72.9 million for the quarter ended March 31, 2011.

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Outsourcing services revenues for the quarter ended June 30, 2011 were $68.7 million compared to $46.6 million in the quarter ended June 30, 2010 and $56.8 million in the quarter ended March 31, 2011. Outsourcing services revenues for the quarter ended June 30, 2011 include $7.4 million related to one month of OPI revenues. Transformation services revenues for the quarter ended June 30, 2011 were $16.3 million compared to $14.1 million in the quarter ended June 30, 2010 and $16.1 million in the quarter ended March 31, 2011. Increases Calendar Year Revenue Guidance to $354.0 million to $358.0 million Representing Annual Growth of 40% to 42% Increases Calendar Year Adjusted Operating Margin Guidance to 13.5% to 14.0%

During Recession
The global recession had a major impact on the financial performance of companies around the world in virtually every industry in 2009, and EXL was no exception. During the economic slowdown EXL focused on their strategy of becoming the partner of choice for their clients by investing in selected domains and client growth. Despite the difficult economic conditions and client headwinds EXL faced coming out of 2008, EXL was able to replace and grow revenues, expand their geographic footprint and improve profitability. They had a more diversified client base in outsourcing and continued to improve the revenue mix in transformation in 2009. EXL performed average during the economic slowdown as compared to its competitors and this is visible from their results for the year 2009.

Key Financial Results - Full-Year 2009

Revenues for the year ended December 31, 2009 increased 5.1% to $191.0 million compared to $181.7 million in the year ended December 31, 2008. Excluding the one-time client payment of $5.1 million, revenues for the year ended December 31, 2009 increased 2.3% to $185.9 million. Revenues for the quarter ended December 31, 2009 were $59.4 million compared to $43.7 million in the quarter ended December 31, 2008. Excluding the one-time client payment, revenues for the quarter ended December 31, 2009 were $54.4 million. Revenues attributable to outsourcing services for the year ended December 31, 2009 increased 10.0% to $152.6 million compared to $138.8 million in the year ended December 31, 2008. Outsourcing revenues excluding the one-time client payment of $5.1 million for the year ended December 31, 2009 increased 6.3% to $147.6 million. Revenues attributable to transformation services for the year ended December 31, 2009 decreased 10.7% to $38.4 million compared to $42.9 million in the year ended December 31, 2008.

Platform BPO
Platform BPO-the next big wave in business outsourcing
Platform BPO is a fast growing concept in the outsourcing industry helping to deal with the competitive business environment. Most organizations operating today seek for those services that enable elasticity, scalability and cost effectiveness to meet the changing needs of business.

Platform of BPO Outsourcing Solution

The BPO industry has always been in news since its inception. This time round the industry is all set to bring a totally new form of it. Well, the next big wave to take on the global business world in the

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coming days in the field of business outsourcing has been termed as the Platform BPO. Marking its presence in the international business scenario, the business process outsourcing industry has already marked a range of advantages from co-location, software-as- a- service and cloud computing and with this new innovation it expects to make much more benefits in near future. People associated with business process outsourcing services form the opinion that the Platform BPO is going to emerge as the next biggie or innovation in the outsourcing industry. The main advantage of it is that this new concept is going to use as an effective cost cutting tool for businesses across the globe.

Defining Platform BPO The Platform BPO is all about offering 'business processing' services making the use of horizontal platform (application) or domain rich vertical. There are some good examples for the horizontal application. These include CRM and F&A. Currently, there are several vertical platforms. Some good examples include insurance benefits, claims processing, collection management, mortgage processing and more. Platform BPO aims
The main purpose of this platform is to offer credibility to the capability of the BPO service provider. We are in 2011 where the prospective customers will no longer be going to get satisfied with the POC demonstration of the domain capability. In the present date, most customers expect to view real platforms or domain applications which can prove the capability of the service provider.

Benefits of Platform BPO

The importance of BPO services is undoubtedly increasing at a rapid rate. Hence, business process outsourcing as an essential business service proves to be a great benefit for a company hiring an outsourcing firm. With BPO, the outsourcing company remains in full control of whatever that gets outsourced. It is with the help of the Platform BPO that the outsourcing firm which operates servers or the applications or storage reaches out to order the platform including an assortment of operating systems and hardware and also a standardized version of application. The service providers of the outsourcing services can well take the improvement of the open-source software in the first place. Together with the use of the open source software, outsourcing vendors can also make use of the hardware which makes most of them when considered economically.

Market size of Platform BPO services

There is no reliable published data available on the exact size of the market for platform BPO services and market share, since this is still an emerging market says CEO of Caliber point RU Srinivas. An IDU report says domestic markets in emerging economies are well positioned to see fast growth.

The expert speaks

The research VP at the Gartner, Mr. Frances Karamouzis has pointed out that the Platform BPO will prove to be helpful for companies in the matters of controlling people, process, infrastructure and applications. Karamouzis also pointed out that it is Platform BPO that cuts out hardware and software companies from enjoying one direct relationship with customers.

What is the future of platform BPO?

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The evolution of platform BPO is actually a gradual shift from the earlier models of BPO. However, platform is in a way BPO on a cloud model and since this is the way of the future, it is also most likely to succeed. Another reason why platform BPO will succeed is the inherent benefit to the clients in terms of low capital expenditure as well as transparency in pricing. Therefore, whether platform BPO is a win-win solution for all is yet to be seen but surely a model that will see exponential growth in the next few years.

Key challenges for the Platform BPO model

Being a relatively complex model, this requires a good understanding of the transactions and costs by both the customer and the service provider. From a customers perspective, the challenges are: Being a new service delivery model, customers are not overtly convinced to adopt the model as it is not yet a proven methodology. Additionally, this calls for a cross-functional decision process cutting across business functions and IT within the customer organization. This needs a holistic mindset from customers. Customers have some security concerns with the Platform BPO system as the same platform is used to service different clients. The platform based model requires the customers to look at the BPO provider as a trusted partner who will manage critical functions and handle confidential and sensitive information for them.

From a service providers perspective, the challenges are: Many organizations operate fragmented, heterogeneous ERP systems. As a result, achieving seamless global delivery and cost effectiveness is an uphill task for the service provider. Also, as large potential buyer/customer organizations have already invested in their own complex IT systems, targeting and converting them to Platform BPO users would be difficult. A Platform BPO requires high upfront investment in fixed costs for the service provider and relatively low variable costs. This is the reverse of the traditional Indian BPO model. Basically, this means that until the business gets to scale, margins remain negative. This is one of the prime reasons that only large service providers who have the capability to make such an investment would be able to cash in on this trend. As a result, the smaller companies will be left behind.

Suggestions to overcome the challenges

Emphasis on uniformity in processes across business verticals and locations for the customer. Plan for a comprehensive change management effort which must include getting the support from the top management, syndication of key Stakeholders and end-user education programs. Develop an environment of trust by incorporating transparent practices.

Recent Platform BPO deals

TCS has several deals for its platform based BPO services. TCS has signed a large deal with the Nielsen Company where it would deliver outsourced finance, accounting and HR services

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on proprietary platforms built by the company. TCS also acquired Diligenta, a BPO platform for processing insurance policies. Infosys approach towards BPO platforms lies in making multiple smaller themes. In FY10, Infosys rolled out a SaaS version of its banking product Finacle (not a fundamentally new domain offering). Infosys has developed platforms in HR, procurement and media & entertainment. For example, Newspaperin-a-box (NiaB), HR outsourcing (Hire-toretire) and Shopping Trip 360 (retail analytic solution). One of the biggest BPO platform play for Infosys is its acquisition of McCamish Systems (a platform-based insurance processing solution provider) in FY10. Wipro, has an order-to-cash platform (ready-to-market platform based offerings using SAP as the backbone) for manufacturing companies that it monetizes based on the number of concurrent users. Caliber Point, a subsidiary of Hexaware Technologies, recently launched Republic, a multitenant HR services delivery solution on the platform as a service model.

Cloud Computing
What is Cloud Computing?
Cloud computing is a standard computing process in which tasks are assigned to a combination of connections, software and services accessed over a network. These servers and connections are collectively known as the cloud. Cloud computing is popularly known as On-Demand Computing since it helps the users to reach out a cloud of resources using a laptop or a desktop or even an iPhone. This computing method can be used to sort through enormous amount of data. Even Google makes use of Cloud computing process to respond to the millions of search requests raised to it at a time. Hundreds of organizations are already offering free Web services in the cloud.

Characteristics of Cloud Computing

Cost Effectiveness This method reduces the capital investment amount that is spent by the companies. Instead this amount is lowered to the operational expenditure amount. High Performance Rate Cloud computing methods have a higher Performance rate and scalability compared to Grid or other types of computing methods. Reliability Cloud Computing is highly reliable and helps in business continuity and disaster recovery. Security Cloud computing method provides high security to the centralized data resources by devoting specific log accesses to the users. High Utilization and Efficiency The users will have greater independence in accessing the remote systems using web browsers regardless of their location. Also it enables sharing of resources and costs among a large pool of users.

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Cloud Service This includes the services and the products delivery through the internet for the easy access of the users. Cloud Platform The cloud computing method provides Platform as Services to the users and reduces their cost and complexity of buying the same. Cloud Storage The Cloud computing provides Data storage as a service to the users like databases or any other Synchronization storages. Cloud Architecture The Cloud Architecture comprises of the hardware and software components required for the cloud computing that are designed by the cloud architects.

Cloud Computing Vs Grid Computing

Grid Computing refers to collection of servers that perform various tasks. These resources are made available for the users for a specific period of time. Though Cloud computing and Grid computing are same from the point of customer benefit, the utilities provided by the Cloud computing method is higher than that of the Grid computing. Cloud infrastructure (compute or storage) is about leveraging commodity hardware, and using the power of software to slice, dice and scale-out capacity and performance, while delivering a service over a network(internet or intranet).

Types
Cloud Computing can be classified into the following types: Public Cloud Hybrid Cloud Private CloudPublic Cloud

This is also known as External Cloud. This is the traditional method of Cloud computing process where the resources are made available as self- services through the Internet. Hybrid Cloud Hybrid cloud refers to the process where the resources are made available for specific enterprises alone with the help of external or internal providers. Private Cloud This is also known as Internal cloud. These clouds provide the resources as offerings through the private networks or web browsers. They provide only some of the benefits of Cloud computing but without any defects.

Cloud Computing Architecture

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A typical cloud computing stack comprises of An underlying infrastructure. Typically distributive in nature A required platform for interconnecting infrastructure and application development. A hosted application

Cloud Computing Services

From the architecture, we obviously see Cloud computing having 3 primary service offering. Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) Infrastructure Service (IaaS) Defined as Delivery of Computing Infrastructure as a Service. Customer does not have to invest on hardware and equipments. Infrastructure providers can statically and dynamically allocate resources to service providers, vendors and customers. Service providers and vendors can provide customized service to end users. Allows for ramp-up and ramp-downs to fluctuating customer demands.

Platform Service (PaaS) Defined as Deployment of platform software required for building applications and services over the internet. The operating system for managing the hardware orchestration

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Software Service (SaaS) Defined as Service-on-demand, where providers license the usage of software (customized interface) deployed over the cloud. Multitenancy is the key architecture principle to support this feature of providing the same software service to multiple users, while maintaining distinctions between customer data. Customers utilize software services and computing power while saving on cost of deployment and maintenance.

Cloud Computing Advantages / Pros

Reduced hardware infrastructure setup. Reduced software deployment and maintenance. Less expensive compared to owning and maintainning hardware/applications. . Flexibility in ramp-up and ramp-downs to fluctuating demands. Flexible paying models pay for what you use. Easier accessibility. Speed Enables business up and running in a flash. Redundancy building. Disaster recovery and business continuity.

Cloud Computing Disadvantages / Cons

Privacy and Security Issue (#1 concern) Dependency on provider Performance / Speed performance speed may be hindered due to limitations of internet connectivity and applications/infrastructure being hosted at remote locations. Compliance hosted applications are mostly standard compliance and may have issues in adhering to special compliance for an individual customer. Sustainability still exist contentious issue.

The Future of Cloud Computing

Cloud is in its Infancy stage Most companies using it for only small projects Privacy and Security remains a key concern for acceptability

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Standards and compliances are still being baselined.

Future Educational Use Classroom collaborations, office web applications, etc Future Personal Use Data backups on drives/flashes can be eliminated Services replaces devices Data accessibility anywhere, anytime Only time can tell

Cloud Computing Some Major Providers

Amazon - Amazon EC2, Amazon S3 Product URL: http://aws.amazon.com/ec2/ Provides: Amazon Elastic Compute Cloud (EC2) Amazon Cloud Front Amazon SimpleDB Amazon Simple Queue Service (SQS) Amazon Simple Storage Service (S3), etc. Amazon Web Services (AWS) provides all sizes of an infrastructure web services platform in the cloud Google Product Google Apps Microsoft Product - MS Azure TIBCO Product - TIBCO Silver

Conclusion
There are huge expectations from Cloud Computing in future strictly based on the economics involved with this technique. The Cloud Computing infrastructure market is expected to grow up to $42 Billion by 2012.

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The IT services are spread across the globe so Cloud Computing shall play a meaningful role for the large organizations involved since the Total Cost of Ownership (TCO) is considerably reduced. Also the organizations shall have to pay as per the usage; it would also reduce their overall costs in infrastructure and services. Despite being criticized politically, the benefits of Cloud Computing outweigh its drawbacks. This technology allows the organizations and end users to access the applications and documents from any part of the globe.

Major Contributors: IT Services & BPO; An Abstract

Market Sizing, Trends and Potential

World-wide spending on technology and related products and services is estimated to have crossed US$ 1.6 trillion in 2010.The figures are more of our interest because one of the major beneficiary countries of the global sourcing trend continues to be India whose expertise and capability in the area of Information Technology (IT) and Information Technology Enabled Services (ITES) has made it a leading destination for global corporations looking for technology partners. Two major vertical in which the industry can be divided are:IT SERVICES and BPO Services. IT Service sector: Global IT services spend increased from US$ 566 billion in 2009 to US$ 574 billion in 2010. The geographic revenues break-up for IT services was as follows: - Americas share 43.0% in 2010 (42.8% in 2009) - Europe Middle-East and Africa revenues 39.7% in 2010 (40.2% in 2009) - Asia-Pacific revenues 17.3% in 2010 (17.0% in 2009) IT services spend is expected to increase from US$ 566 billion in 2009 to US$ 684 billion by 2014 at a CAGR2 of 3.9%. BPO Services: Global Business Process Outsourcing (BPO) services spend has increased from US$ 152 billion in 2009 to US$ 158 billion in 2010. The geographic revenues break-up for BPO spend was as follows: - Americas share at 55.3% in 2010 (55.8% in 2009) - Europe Middle-East and Africa revenues 25.9% in 2010 (26.0% in 2009) - Asia-Pacific revenues 18.8% in 2010 (18.2% in 2009) BPO spend is expected to increase from US$ 152.1 billion in 2009 to US$ 201.5 billion in 2014 at a CAGR of 5.8%.

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Trends in global sourcing

It remained positive and showed a growth rate of 10.4% in 2010 over 2009.IT spend forecasts by global technology analyst firms like Gartner, Forrester, IDC and others indicate a growing market for IT and ITES for industry verticals, service offerings and geographies of interest to the Company and excellent prospects for growth in the future. But in the wake of global recession the Indian information technology industry is cautiously optimistic for 2011 after a tumultuous 2010 due to the continued economic uncertainty in Europe and the US. The resilient industry, which is still on the path of recovery from a global tech meltdown, earns 80 percent to 85 percent of its export income from software services and back office operations in the uncertain markets of Europe and the US and hence any development in these countries have direct impact on Indian IT Services industry.

REFERENCES
CII-PwC report on Changing Landscape and Emerging Trends 2010 National Skills Development Corporations report on HR and Skill Requirements in the IT/ITES Sector(2022) A Report NASSCOM Report 2011 NASSCOM Deloitte report on INDIAN IT Industry Impacting Economy and Society (2008) NASSCOM Strategic Review (2008-2011) Internet for getting the details of organisations researched above. Newspaper Articles(Economic Times) for recent trends and updates Annual Report of the organisations concerned.

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