Challenges in the Asian market: Challenges in the Asian market V. Sriram


Agenda : Agenda IT Services Market in Asia Pacific Infosys in Asia Pacific today – A Snapshot Key Characteristics of the region Infosys in Japan, Australia, Singapore and HongKong


A Snapshot of IT Services Market - Asia Pacific Vs. Worldwide : A Snapshot of IT Services Market - Asia Pacific Vs. Worldwide Source: Gartner Dataquest July 2002


Asia Pacific IT Services Market size forecast by Country (in Billion US $): Asia Pacific IT Services Market size forecast by Country (in Billion US $) Total 93.1 b0 Total 96.4 b Total 105.3 b Total 116.4 b Total 129.4 b Source: Gartner Dataquest July 2002


Infosys in Asia Pacific Today - Snapshot: Infosys in Asia Pacific Today - Snapshot Total Revenues / Head Count / Offices ~7 % of company revenues 5 offices (excluding offices in India) Approximately 900 employees working for APAC Clients Coverage From Japan - Japan and Korea From Hong Kong - Hong Kong, Taiwan and China From Singapore - ASEAN countries From Australia - Australia and New Zealand Year of start for offices Japan 1997 Australia 1999 Hong Kong 1999 Singapore 2000


Infosys APAC has grown rapidly in the past 2 years through new account acquisition…..: Infosys APAC has grown rapidly in the past 2 years through new account acquisition….. 28 clients in FY 2001-02


Infosys APAC Revenue Split for 2001-2002: Infosys APAC Revenue Split for 2001-2002


Verticals and service footprint: Verticals and service footprint Verticals Manufacturing Financial Services Telecom Services IT strategy and effectiveness Large Scale reengineering including platform conversion Package implementation


APAC – Key Characteristics: APAC – Key Characteristics Diverse Markets Challenges include diversity of language, culture, business practices Outsourcing as a concept slowly getting accepted In most countries (except Japan) no credible mid size Consulting/ SI company Need for skills in latest technology areas acute Infosys in APAC has traditionally grown at twice the company growth rate 90% of clients are Global 1000 companies Long term client relationships Have built local capability to deliver in markets like Japan


Japan – Salient Features: Japan IT Services Market Size and Forecast World’s Second largest economy, Japan accounted for 12% of the worldwide IT services market in 2001. CAGR will be 4.1% through 2005 Japanese IT services market was forecast at $64.8 billion in 2001, growing to $83 billion in 2005 88 Companies in Fortune 500 (July 2002) Japan – Salient Features Source: Gartner Dataquest July 2002


Infosys in Japan: Infosys in Japan Key Initiatives / Achievement Marketing Office setup in Japan in 1997 48.6% of Infy APAC revenue from Japan(FY 02) 6 Fortune 500 clients started since the inception of the branch in-spite of a sluggish economy Sales, Marketing,HR & Support teams include Japanese nationals Japanese - English technical hires, Dedicated translation team Challenges Language Proficiency, Culture Slow Decision Intense pressure on prices Highly cost and quality conscious market Hiring of locals and other Japanese - English enabled Technicals Short cycle projects with evolving requirements Aggressive schedules in almost every project


Australia – Salient Features: Australia – Salient Features Australia will remain the largest IT Services country in Asia Pacific after Japan, It will grow up to 16.7 b US $ by 2005 (Gartner Dataquest July 2002); Australia accounted for 11.8% of the Asia Pacific IT services market in 2001 Restructuring of industries such as utilities and telecommunications is generating demand for consulting leading to integration projects 6 Companies in Fortune 500 (July 2002) Source: Gartner Dataquest June 2002


Infosys in Australia: Infosys in Australia Key Initiatives / Achievement Marketing Office setup in 1999 Infy getting established in Australia 13% of Infy APAC revenue from Australia (FY 02) Continuous hiring of Australian nationals for Sales and Delivery High end positioning Lot of “consulting”/ “trouble shooting work” Infosys as a “Thought Leader” in Australia Accounts like Telstra/ Vodafone/ Suncorp Metway/Swiss Re Challenges Establish credibility of Global Delivery Model Create Infosys Brand Equity


Singapore and Hong Kong IT Services Market size Forecast (in US $): Singapore and Hong Kong IT Services Market size Forecast (in US $) Hong Kong Singapore Source: Gartner Dataquest June 2002


Infosys in ASEAN Region: Infosys in ASEAN Region Market Manufacturing, Financial and Telecommunications markets are strong and their expansion in IT is a main business driver for Software support services Govt’s push into ebusiness and developing SMB segment is driving the IT services market in Singapore and Hong Kong Fragmented market; Cultural linguistic diversity Key Initiatives / Achievement Marketing Office setup in Hong Kong in 1999 and in Singapore in 2000 Global strategic partnerships for large Asian companies Marketing to tap into the influencing positions of Head Quarters Challenges Low brand of Indian Companies Cheaper alternative (but unproven) location like China


How do we cope with these challenges ?: How do we cope with these challenges ? Increase local content Invest in linguistic capability Customise solution / delivery process to meet local requirements Alliances specific to markets Focus on business development activities (Services/Verticals)


Thank You: Thank You