In fo sy s C o n su ltin g in 2 0 0 6 : a d in g th e N e x t G e n e ra tio n o f B u sin e n d In fo rm a tio n Te ch n o lo g y C o n su ltin

IT Service Industry : OverviewOn-shore incumbents are still larger: IBM, Accenture Off-shore players growing : TCS, Wipro, Infosys Technology 47% Annual growth (2003 vs. 2004) Still 0.8% market share

CAGR 7%

Fragmented market

IT Service Industry : TransformationChange in Customer Needs Invest in new technologies on faith and without strong links to ROI measurements (Over-purchase !) Change in Offerings Traditional enterprise application packages Homogeneous infrastructure

More demanding in ROI Get more out of tech investment Rapid adaption /modification Specific point solutions

Off-shore IT services SOA (Service-oriented Architecture) & Web services Applications as services

Infosys today is a global leader in the next generation of IT and ConsultingNamed Indias Most Respected Company in the Businessworld 2006 survey for the fourth consecutive time Adjudged Indias Best Managed Company in a study conducted by Business Today and A.T. Kearney Forbes: Infosys is a role model for companies everywhere in financial transparency. Dream company to work for in India and amongst the 100 best places to work for in IT in the US Amongst the first companies in world to be certified at CMMI Level 5 BusinessWeek: Amongst the top 3 IT Services companies in the world Wired rated Infosys among its top 40 companies that have reshaped the global economy.

Exceptional Financial Performance

Increase in number of Active Clients

Strong Growth in Employees

Revenue ($M)

Active Clients

Employees

Applying GDM+ across the service spectrum2006Management Consulting Business Process Management IT Outsourcing Systems Integration Technology Consulting Technology-enabled BPR Enterprise Solutions Application Development FY 01 FY 02 and Maintenance FY 03FY 04 FY 05 FY 06

New services * as % of revenue37 . 7 % 41 . 1 %

35 . 4 % 29 . 6 % 24 . 9 % 22 . 8 %

2001

1996

1981

Software Re-engineering People Organization Infrastructu re Process Quality * New services is defined as services other than Application Development, Maintenance, Re-engineering and Products

Infosys Global DeliveryModel Infosys Technologies Limited 2005-06

June 10, 2006

Infosys is a global leader in Consulting and IT ServicesRecognition Achievements :nUSD 4bill . + global revenues

Lder en Tecnologa Bancaria

( 2008 ) Europe represents over 25 % of this figure (NASDAQ :INFY) years

n~ 32 billion USD market cap nOver 30% annual growth for the last 6 nGlobal workforce of 100 . 000 +

Empresa mejor gestionada

nMore than 450 clients , mostly

Fortune 2000 companies Infosys customers

n7 of the largest world companies are

Mejor empleador , Mejor universidad corporativa Mejor gobierno corporativo

nOver 87% of projects on-time on-budget nMore than 90 % recurring

customers

nGlobal leader in quality practices

CMM5, 6-Sigma, Malcolm Baldridge

n

Infosys is a global leader in Consulting and IT ServicesREVENUES FROM FINANCIAL SERVICES ( $ M ) KEY FIGURES More than 154 active clients Fortune 2000)CAGR aprox . 40 %1156 775 2842003

(en su mayora Global

More than 13.000 employees in 31 development centres around the world 6 of the 7 largest US banks

3892004

551

1992002

2005

2006

2007

4 of the 5 largest European banks 3 of the 4 largest Australian banks

Other Segments

37 . 37 8% %

Banking and Capital Markets

Infosys Technologies Company BackgroundStarted in 1981 for $225 Built up in 1980s and 90s through customized software solutions, developed in offshore (Indian) development centers Also develops and markets software products Flagship product is Finacle, a modular banking solution for retail, corporate and banks Grew mostly through new business contracts, acquisition of smaller IT service providers, and alliances with larger companies.

Infosys Technologies Business ModelGlobal Delivery ModelDefinition Vehicles Customer Value

38 global development centers 20 in India Lower Risk 18 in the US, the UK, Australia, Canada, China, Mauritius and Czech Republic. 3 Measurable

1 Lower Cost 2 Faster Implementation 4

al components and then distributing those components to locations (onsite, nearsho here they can be delivered at maximum value.

Modular Global Sourcing Framework

Innovati on to Meet New Customer Needs

Infosys Technologies Business Performance

CAGR 43%

CAGR 45%/30%

BITDA Margin % 33%

33% 32% 32%

Infosys Technologies Business PerformanceRevenue by Industry Revenue by Geographic Market

Infosys Technologies What are the Competiti Advantages?Abundant supply of Infosys Technologies low-cost scientists Excellent training and engineers program Brand/ reputation

India

Open/transparent & performance-driven culture

Global Delivery Model Global development centers Right Talents

Customer relationship

Cost & quality advantage coming from GDM and lowcost labor

Domain knowledge

Flat organizational structure

Right reward system (stocks, career visions)

Infosys Technologies Sustainable? : vs. Current CompetitorsOn-shore Incumbents Other Off-shore Players

Trying to adapt GDM while maintaining their existing business model & organizational structure Adding more offshore workforce through M&A or expansion However

Can NOT completely migrate to GDM because It can jeopardize existing businesses There is fundamental organizational difference (i.e. Hierarchic vs. Flat) which would make it hard to attract right talents for GDM

Infosys Technologies Sustainable? : vs. Current CompetitorsOn-shore Incumbents Other Off-shore Players Still behind Infosys in terms of operational excellence because Infosyss core competency is People and supporting system to attract/keep talents Intangible assets and congruence of the whole system are hard to copy (e.g. Culture, HR, reputation)

Already offering the same services by copying the tangible part of business model 24/7 services Global offices Competing for the same talents However

Infosys Technologies Sustainable? : vs. Current CompetitorsOn-shore Incumbents Other Off-shore PlayersPerformance ComparisonUSD (Mil)

Gross Margin

Net Income Margin 26% 19% 22%

Infosys 42% Wipro TCS 33% 46%

Infosys Technologies Sustainable? : vs. Potential CompetitorsThey are disruptive not only to incumbents but to off - shore playersSignificantly easier & faster implementation Very low up-front capital investment User-focused, not buyerfocused : self-service IT Very cheap or free funded by Ad model

Infosys s competitive advantages no longer sustainableNo need to have expensive IT service providers Very low entry barrier Force incumbents to change product & pricing

SaaS

Web 2.0

Infosys Technologies SWOT AnalysisStrengths Weaknesses

M H L M H M M

Operational excellence to deliver GDM Capability to attract & keep talents Strong financial Strong relationship with Large Corporations

L M

Over-reliance on US economy Limited position in value chain (i.e. No presence or relationship with consulting business)

Significan ce of Impact H HighM

More cost/speed conscious customers Market growth Higher awareness on off-shore model

H H

Medium Low

Wage inflation due to competition on talents (15+% / year) Newer disruptive business models (i.e. web services, web 2.0)

L

Opportunities

Threats

IT Consulting Market Context & StructureSubset of overall IT services market Projected single-digit growth of 5% Largely fragmented market with 2 key segments: On-shore consulting and IT services players (Accenture, IBM, Capgemini, EDS) Off-shore IT services players (Wipro and TCS) Largest shares held by Accenture and IBM

Infosys Consulting Company BackgroundStarted in April 2004 with initial investment of $20M Chose a wholly-owned subsidiary model Led by former leadership of Deloitte Consulting India Focused on the Global Delivery Model (GDM) and more cost-competitive consulting rates Integrating the business consulting and technology implementation lifecycles Engagements sourced from parent company and existing client base of Infosys Technologies

Infosys Consulting Company OrganizationBuilding a Unique Culture Recruiting the Right People Creating a Differentiated Approach Rewarding Employees

Infosys Consulting Business Model 1 - 1 - 3 ModelDefinition Vehicles Customer Value

Lower blended rates On-shore management consulting talent Faster Implementation 2 On-shore liasons Off-shore resources Integration

1

3

gives one client one ICI resource onsite, one Infosys Tech resource onsite, and 3

1-1-3combined with GDM

Infosys Consulting What are the Competitive Advantages?Large supply of low-cost IT/process resources Access to Infosys Technologies clients Strong operational skills

Unique, blended model

1-1-3 Model Blend on/off shore Cost efficientEasier to integrate offshore with onshore

Cost & speed advantage coming from 1-1-3 and GDM model

Infosys Consulting ICI vs. Current CompetitorsOn-shore Incumbents Other Consulting Players

Trying to adapt GDM while maintaining their existing business model & organizational structure Adding more offshore workforce through M&A or expansion However

Can NOT completely migrate to GDM/1-1-3 because It can jeopardize existing businesses May be brand equity erosion

ICI Experiencing Revenue GrowthHigh double-digit year on year revenue growth

R evenue (US Mil) D$60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 $5.30 $36 $54

Approximately 2/3rds of revenue from the United States Key industries: Retail, Transportation, High Tech, Banking, Energy/Utilities Reflects steady growth in number of clients: 25 clients in FY05 54 clients in FY06 89 clients in FY07

But Increasingly Dim Profitability ResultsNet Incom & F F e C$0.00 ($5.00) ($10.00) ($15.00) ($20.00) ($25.00) ($30.00) FY05 ($8.10) FY06Infosys still deems Infosys Consulting to be in investment phase. FY07 Potential causes: cheaper blended rates expensive on-shore resources Learning curve in managing consulting business economics

($9.40)

($28.20

Infosys Consulting vs. Current Competitors Operational Scale & PerformanceOn-shore IncumbentsIC I Revenue ($M) Employees Accenture IBM BCS $54 $11,856 N.A. 209 126000 60,000

Still a marginal player vis.a.vis consulting units of both the on-shore as well as off-shore majors.

Other Off-shore PlayersIC I Revenue ($M) Employees WC S $54 N.A. 209 TCS N.A. 5,000 34,000

Infosys Consulting SWOT AnalysisStrengths Weaknesses

M M

Unique blended model

H H M M M H

M Strong in operations H M M

Access to Infosys clients

Low brand equity Inexperience with consulting relationships Significance of Impact Challenge attracting top consulting talent H High M Medium Easy replicability of model Increasing IBM/ACN presence in India Culture clash with Infosys Technologies L Low

More cost/speed conscious customers Market growth Open up new segment of market

Opportunities

Threats

Infosys Consulting: Cost or Profit Center?What is ICIs place in the Infosys Technologies Portfolio?Approaching profitability or break even Collaborating effectively with Infosys Key Challenges Technologies Impending replication of ICI business model by others Find firm, differentiated place in industry value chain Revisiting pricing and/or cost structure Integrate client management with Infosys Needed Responses Technologies Use ICI to monitor client trends & the next big thing. Capitalize Infosys flat world aura to achieve positioning

Moving forward : Infosys StrategyInfosys should leverage ICI , 1 ) To strengthen its position in current market , and 2 ) To prepare for further industry transformationICIMore wallet share from current customers Integration from Existing Customer Base rather than expansion

Infosys TechnologiesStronger relationship through involving higherlevel decision making Provide more agile and customized solutions Acquire them as customers or partners Develop capabilities to offer right services/products in the long-term

Antenna to sense changes in the market Influence customers iance with Emerging strategic moves Competitors Relationship building with emerging players

Thank You Q&A