March 2015, Lviv

EPAM’s vision on PDS model

…Or An Opportunity To See a Big Picture…

2

AgendaAGENDA

The Horizons

The Opportunity

Questions and Maybe Some Answers…

HORIZONS

3

4

Relentless change of technology forces change in Software and in Services

Performance

Time

Mainframe

PC

Client-server

Cloud

5

Transformation can be thought of in terms of horizons

Horizon 1: Present

Horizon 3: Long-term

Horizon 2: Mid-term

OPD (PDS 1.0)

Outsourcing

Outstaffing

BI

UXD

eCommerce

Digital Content

PDS 2.0

Big Data

Strategy consulting

THE MARKET OPPORTUNITY

6

• There is growing group of companies that are not

traditional software companies that see more and more of

their business value coming from their software-based

products and services.

• They are in search of the vendors with discipline,

agile processes, and technical know-how associated

with strong product development skills sets (which is

separate from traditional IT services).

• These increasingly software-centric firms are in several

key verticals including Financial Services, Retail, Media,

and Information/Data Services, and number of

others…

Creating products and platforms for software-enabled businesses is growing very rapidly

7

EPAM MISSION-ACTION PLAN

Critical Impact to the Industries by Digital Technologies

THE MARKET SIZE

Confidential 9

$8.0

$14.0

2009 2014

Global Software Product

Development Services (2)

($ in billions)

U.S. and EMEA

Global IT Services (2)

($ in billions)

(2) Source: IDC

10

$10.0$14.2

$19.9

$26.0

$40.2

$29.9

2009 2014

EMEA U.S.

Old “Fast” Growing Market

10

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

2013 2014 2015 2016 2017 2018

(US$ millions)

Digital engagement platform deployment

Backend application transformation

Digital process re-engineering

Digital business strategy

There is big NEW target and we can benefit the most

Forrester Research 2014

We are

going

after this

$50b

market

THE BUSINESS DEFINES THE SKILLS REQUIREMENTS

12

13

Systems of Record vs. Systems of Engagement…

Systems

of record

Network

Hardware/infrastructure

Software

Data

User experience

Systems

of engagement

Infrastructure

Software

Data

User experience

Design focused on the

tasks that customers are

trying to accomplish

Design around

assembling

components

Legacy System

Strategy, Consulting & Integration Services

Integration Platform

Legacy SystemLegacy System Legacy System Legacy System

Target Customers

3rd Party

Product

Solution Architecture

The Complex Systems Model… to address the needs of systems of engagement

Solution Sales

EPAM

Accelerator

#1

3rd Party

Product

3rd Party

Accelerator

#3

EPAM

Accelerator

#2

EPAM

Accelerator #2

3rd Party

Accelerator #3

EPAM

Accelerator #1

EPAM

Product ?

Enterprise/Technology Architecture

EPAM

Product ?

REQUIRING NEW HYBRID SET OF SKILLS NEW HYBRID SKILLS SET IS A REQUIREMENT

Systems of

engagement

services

STRATEGY CONSULTING &

PRODUCT MANAGEMENT

• Craft engagement strategy

• Re-engineer the business

DIGITAL STRATEGY

and EXPEREINCE

DESIGN SKILLS

• Develop task maps

• Create simple user

experience

PRODUCT DEVELOPMENT MINDSET

• High standards in Software Engineering Practices

• Evolving Agile Processes

• Managing Constant Releases…

MODERN AND LEGACY

LANGUAGE PROFICIENCY

• Build new apps

• Re-architect middleware

• Rationalize legacy systems

INDUSTRY/DOMAIN

EXPERTISE

• Reengineer business processes for

task orientation of new systems of

enragements

WHY IS IT AN OPPORTUNITY FOR US?

16

17

In the new “software-enriches-the-brand” world, service providers struggle to catch up with NEW

Legacy

New

Traditional System

IntegratorsSoftware-Enriches-The Brand

Company

New

Legacy

Gartner View: New Technologies Driving The Change

18

THE GAP TO ADDRESS…

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EPAM MISSION-ACTION PLAN

The Gap Analysis…

Understand how to change

what generates the revenue

Map customer journeys,

design the experience

Industry, UX, and change

management expertise –

hardest to hire for roles

The need The “know how” The gap

Speed up competitive

response

Define MVP, prototype,

iterate quickly

Product management and

key CoEs are not possible

to quickly spin

Get product to market Build with awareness of

legacy, hook up middleware,

scale to cross-platform and

multi-market reality

Firms lack legacy tech skills,

new tech skills, ability to

both go 0->1 and build on

top

Keep product in market Deliver value continuously

while maintaining uptime

CI/CD, DevOps are hard to

master for traditional IT; app

and infrastructure

management need scale

Free up time and money for

continuous investment

Manage portfolio, maintain

process discipline, improve

training and infrastructure

Re-usable solutions and

assets, best-in-class tools

and people processes

require multi-client view

This is PD This is PDS

EPAM MISSION-ACTION PLAN

…and this is why we need to continue to evolve

Understand how to

change what

generates the revenue

Map customer journeys,

design the experience

Industry, UX, and change

management expertise –

hardest to hire for roles

The need The “know how” The gap

Speed up competitive

response

Define MVP, prototype,

iterate quickly

Product management and

key CoEs are not possible

to quickly spin

Get product to market Build with awareness of

legacy, hook up middleware,

scale to cross-platform and

multi-market reality

Firms lack legacy tech skills,

new tech skills, ability to

both go 0->1 and build on

top

Keep product in

market

Deliver value continuously

while maintaining uptime

CI/CD, DevOps are hard to

master for traditional IT; app

and infrastructure

management need scale

Free up time and

money for continuous

investment

Manage portfolio, maintain

process discipline, improve

training and infrastructure

Re-usable solutions and

assets, best-in-class tools

and people processes

require multi-client view

This is PD This is what we need to continue to build

Biz Consulting

Agile Transformation

Industry Focus

Core Industry Know

Hows

IP

Outcome Models

Change Mgmt

Product Mgmt

Client Forums

Marketing Services

SO…WHAT WE CAN DO ?

22

Traditional Market Segmentation

Forrester Research 2014

Buyer

Business

IT

Expertise Business

strategy

Technology

Business

consultants

Digital/

interactive

agencies

Systems

Integrators

Product

development

specialists

Global Competition – EVERYBODY and EVERYWHERE

POSITIONING

ConsultingSystem IntegratorsStaffing Solution Vendors

Tier 1 Global Firms

Mgmt.

consulting

Placement of

on-demand

resources

Execution of specific

point solutions

Execution/mgmt of enterprise

initiatives, managed services

delivery, and ODC services

Advisory

Agencies

Tier 3+ firms

ISVs

Sourcing &

process consulting

Local firms

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SIs that are

adapting

We are trying to build a New Kind of Software Solutions Firm

Forrester Research 2014

Buyer

Business

IT

Expertise Business

strategy

Technology

Business consultants

Digital/

interactive

agencies

SIs that

did not

adapt

PDS

or

“Digital

Transformation”

THERE ARE LOTS OF OBSTACLES TO OVERCOME…

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THANK YOU…

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