june 5, 2008 peter m. heij satyam computer services ltd 7 th munich economic summit brain drain vs...
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June 5, 2008 Peter M. HeijSatyam Computer Services Ltd
7th Munich Economic Summit
Brain drain vs Brain gain
Over USD 2,2 Billion in Revenues
31 Global Solution Centers & 580
Customers
Market Capital about USD 8 BillionAs of March 31 2008
SEI-CMMI Level 5 53,000 Associates
SATYAM
Satyam highlights
Among Top 5 IT service providers from India. Provider of End to End IT Solution
13,2 16,223,2
31,9
40,8
24,2
4,6%
5,2%
5,5%
~33%
Indian IT-BPO revenue grew by 33% in FY2008
USD billion, percentage
FY2006 FY2007 FY2008E
37.4
48.1
64.0
~29%
DomesticMarket
Exports
Share of GDP
• Sustained export growth – revalidates strong fundamentals
• Domestic market growth is gaining momentum – even without the impact of Rupee appreciation
• Revenue aggregate as a percentage of GDP continues to rise
~28%
~32%
~43%~23%
Indian IT-BPO SectorRevenue Aggregate and Share of GDP
Exports crossed USD 40 billion and domestic market crossed USD 23 billion
378427
553
704
865
690
Domestic Market
BPO Exports
IT Exports
Direct employment to reach nearly 2 million Indirect job creation estimated at 7-8 million
‘000s***Direct Employment
Indirect Direct TotalEmployment
9-10mn7-8mn**
~2mn
*Figures may vary slightly due to rounding off ** Indirect employment multiplier estimated at 4x, NASSCOM-CRISIL Study 2007*** Estimates for direct employment do not include employees in the IT hardware sector.
FY2007 FY2008E
• ~2 million professionals employed directly
• Indirect employment ~4x, creating additional 7-8 million jobs**
4,9
8,4
18,0
0,5
6,3
10,9
23,1
0,5Hardware
ProductDev and
EnggServices
BPO
ITServices
FY2008E
FY2007
Export revenue, predominantly comprising software and
services
Percentage, USD billion
DomesticMarket
Exports
• Geographic market diversification
• Vertical market exposure
• Breadth and maturity of service portfolio
• Global delivery capabilities
62-66%
34-38%
~28%
~29%
~30%
**
*Figures may vary slightly due to rounding off ** Negligible
61%
18%
12%
6%
2%
While US and UK remain the dominant markets, the industry
is steadily increasing its exposure to other geographies
US
UK
Continental Europe
APACROW
100% = USD 31.4 billion*
~30%
US
UK Continental Europe
APAC
~44%
>55%
~37%
Percentage
FY2007
CAGR FY2004-07FY2007FY2004
Indian IT-BPO Exports grew at a CAGR of 35% over FY2004-07
* Excludes hardware exports
Global Delivery Footprint of Indian IT-BPO Firms
• Indian IT-BPO delivery footprint spans over 77 cities* across more than 25 countries*
• Near-shore and on-shore presence is enabling firms to build more integrated, ‘full-service’ offerings
* Excludes Indian cities / India
Credible scale across a widening service portfolio complemented by expanding GDM capability is helping deepen client relationships
While cost remains a key driver, access to skills is rapidly gaining prominence
* Global numbers indicate 2007 year end estimates; includes addressable markets in currently off shoring industries
** India revenues indicated refer to estimates for FY2008
Addressable market of at leastUSD 380 billion (2007-08)*
Addressable market
Current size
Global Sourcing of IT & Engineering Services
5-6x~220-250
~44-47
15-18
>29
Others
India**
Global Sourcing of BPO Services
6-7x~160-190
~26-29
Addressable market
Current size
15-18
~11
Others
India**
The opportunity is much larger; significant share of the addressable market potential still lies untapped
USD billion