A Brief Overview of the Indian IT Industry & Infosys

February, 2006

Page #

Page *

Rapidly growing GDP of 7.5%-8%Services sector has more than 50% weightage in GDPStructural drivers for growthLarge population and favorable demographic trendsSkilled and well-educated labor forceRising integration into global trade and investmentImproving macro policies and institutional frameworkVarious studies predict that India will become the 3rd largest economy in the world by 2050But there are challengesNeed for simplification of rules and regulationsInfrastructure

A brief look at the Indian Economy

Page #

Page *

Rapidly growing exports1991 US $128 million2005 US $17.2 billion2008 (projected)- US$ 50 billion

Employs over 1,100,000 people

Over 400 Fortune 500 companies outsource their software development & maintenance to India

Snapshot of the Indian Software Industry (Source: NASSCOM)

Page #

Page *

Liberalization of the economy & the seeds of IT boom in IndiaAbolition of licensesRationalization of taxesExport thrustReduction of import tariffsAbolition of wealth tax Foreign exchange reforms Free pricing of IPOs Foreign portfolio investmentsEmployee stock option plans

Page #

Page *

The Infosys Journey

2005Infosys crosses USD 1.6B (05-06 projection $2.1B) in revenue and has over 49000 employees, with 454 clients

Page #

Page *

Infosys this year will be a $2B organization

Global Presence with offices in 17 countries and 45 citiesOver a Billion and half USD in revenue (projection of 2.14B) and growing at a rate of 49% per yearLess than 65% of revenue from USA. Strong presence and understanding of APAC market Partnering with clients for Technology-enabled Business TransformationProven track record of ramping-up resources to meet client needsHigh customer satisfaction over 93.2% (as on Q3 05) of revenues from repeat business39 clients from Fortune 100 (Total number of clients as 454 (Q3)) Over 49,420 employeesNumerous quality benchmarks CMMi 5, PCMM, Six Sigma, BS7799, AS9100 certifications to name a fewWorldwide recognition for business practices, financial management & technical expertise

Canada: TorontoUSA:AtlantaBostonCharlotteChicagoDallasDetroitFremontLos AngelesNew YorkRestonSeattleArgentina: Buenos AiresIndia:Bangalore, Chennai, Pune, Bhubaneswar, Hyderabad, Mangalore, Mohali, Mysore, New Delhi, Mumbai, TrivendrumAustralia: MelbourneSydneyChina:BeijingShanghaiJapan: TokyoHong KongMauritiusSharjahSingaporeEurope:AmsterdamBrusselsFrankfurtLondonMilanParisPragueStockholmStuttgartUterchtZurich

Page #

Page *

Infosys Consulting IncInfosys Australia Ltd.SubsidiariesInfosys Technologies (Shanghai) Company Ltd (ITSCo)Progeon ( BPO)Enterprise SolutionsExpress, Transportation, Media and EntertainmentProduct Engineering and Embedded servicesSystems IntegrationEnterprise Solutions Independent Validation Services Infrastructure Management Services Business Process Outsorcing This is how we are organizedClient focused integrated business units ably supported by ECUs, BEFs and competency centers.

Page #

Page *

New services defined as services other than Application Development, Maintenance, Re-engineering and Products

We have continuously evolved to try and meet client requirements over the years

Page #

Chart3

0.6830.317

0.6390.361

0.6370.363

0.6110.389

0.5890.411

ADM

Non-ADM

Sheet1

20012002200320042005

2001MUSD2002MUSD2003MUSD2004MUSD2005MUSD

1Development40.00%165.5432.00%174.4032.10%341.0925.70%273.0823.20%369.34

2Maintenance25.40%105.1229.00%158.0528.20%299.6530.10%319.8429.90%476.01

3Testing2.90%12.002.90%15.813.40%36.135.30%56.325.80%92.34

4Package Implementation7.20%29.809.80%53.4111.00%116.8814.50%154.0715.20%241.98

5Re-engineering9.30%38.4910.10%55.055.50%58.446.00%63.756.20%98.70

6Consulting4.90%20.284.20%22.894.30%45.693.70%39.323.60%57.31

7Engineering Services1.70%7.042.60%14.172.60%27.632.20%23.382.00%31.84

8Other Services6.10%25.245.40%29.438.30%88.199.70%103.0711.10%176.71

9Products2.50%10.354.00%21.804.60%48.882.80%29.753.00%47.76

Total100.00%100.00%100.00%100.00%100.00%

Revenues(M)413.9545.0753.01,062.61,592.0

ADM68.30%63.90%63.70%61.10%58.90%

Non-ADM31.70%36.10%36.30%38.90%41.10%

282.66348.26676.86649.24937.69

131.19196.75385.72413.34654.31

Sheet1

00

00

00

00

00

ADM

Non-ADM

Sheet2

Sheet3

Applying the GDM across services means:Growing the business with existing clientsExpanding our menu of servicesEnhancing domain expertise across industry verticalsAs a result of this application, we generate an increasing portion of our revenue from New Services, which we define as services other than Application Development, Maintenance, Reengineering and Products. During FY 05, this was approximately 38%, an increase from 15% in FY2000

Page *

Infosys rich client base enables it to leverage the best practices followed in other accounts.

Sample client baseInfosys has 39 Fortune 100 clients and 98 Fortune 500 clients (as of 31st Dec 2005)

Page #

2953.bin

Page *

Infosys has strategic alliances with key players in all the segments to provide best services at optimal cost..Key Alliances of Infosys:

Page #

Page *

Recruitments best-in-class and has the infrastructure/ practices to retain them. Infosys Strategy for Employee -Attracting the bestLaterals joining from Big 5 and global corporationsEmployer of choice at IIT, IIMCapability to train 14,000 employees in a year at Mysore

Focus on growth & retentionManaged attrition (5% of revenues

World class work environmentCampus like facilities and cultureFast paced, results oriented ethicEmpowerment in non-hierarchical organizationInternational Program like Instep to ensure global work culture

Page #

Page *

ParametersUnitBenchmarkInfosysSource Delivered Defect Density Delivered Defects/ FP0.1050.026Overall Defect Removal Effectiveness%9597On-time Delivery% of projects6694ProductivityLOC/ Person Day5265Defect DensityTotal Defects/ KLOC126Software Assessments, Benchmarks and Best Practices by Capers Jones (2000) Bangalore SPIN Phase 3 ReportApr 03Bangalore SPIN (Software Process Improvement Network) is a commercially neutral, non-profit organization supported by leading global software companies.

This has Special Interest Groups (SIG) for benchmarking (Development), comprising of over 15 high maturity (Level 5) offshore vendors.With a deep focus on Process Capability and Benchmarks itself against high maturity offshore vendors (CMMI L5) in industry

Page #The delivered defect density is based on forward FP count using IFPUG method for High level language (Java). This would be modified as and when we get more language data based on forward FP count.The benchmark figure is against many high process mature Indian organizations as well. This clearly shows that we are better than benchmarks. Explain SPIN in brief. The SPIN benchmark members are Honeywell, HP, HPS, Logica, Lucent Technologies, MindTree Consulting, Motorola, Novell, Philips, WIPRO.

You may not like to name the above organizations during the presentation. This is just for your reference.

Page *

What we offerWhat it brings to YOUBest People, Low Attrition and steep ramp-up capabilityEnd-to-end servicesGlobal Presence and matured Delivery ModelsAbility to scaleSEI CMMI Level 5 Processes and high quality focusExpress /Logistics Domain and diverse Technical CompetenceSustainable Learning Curve AdvantagesAddressing your complete landscapeQuick Time to Market, Lower CostsHigh Confidence Levels in Delivery and RelationshipQuality Delivered by a very few Companies worldwideSound Methodologies, RepeatabilityTo summarize, the strengths of people, process and technology converge seamlessly within Infosys to fulfill your end to end IT needs.

Page #To summarise what we offer you is simply the best.

Page *

Thank You

Page #

Applying the GDM across services means:Growing the business with existing clientsExpanding our menu of servicesEnhancing domain expertise across industry verticalsAs a result of this application, we generate an increasing portion of our revenue from New Services, which we define as services other than Application Development, Maintenance, Reengineering and Products. During FY 05, this was approximately 38%, an increase from 15% in FY2000

The delivered defect density is based on forward FP count using IFPUG method for High level language (Java). This would be modified as and when we get more language data based on forward FP count.The benchmark figure is against many high process mature Indian organizations as well. This clearly shows that we are better than benchmarks. Explain SPIN in brief. The SPIN benchmark members are Honeywell, HP, HPS, Logica, Lucent Technologies, MindTree Consulting, Motorola, Novell, Philips, WIPRO.

You may not like to name the above organizations during the presentation. This is just for your reference.To summarise what we offer you is simply the best.