Global R&D Service Providers (GSPR) Rating 2012
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Transcript of Global R&D Service Providers (GSPR) Rating 2012
No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from Zinnov
July 2012
2 Note: Source: Zinnov Research and Analysis
Context
Global R&D spending is expected to grow by about 5.2% to more than $1.4 trillion in 2012
On an average, 45 % of R&D headcount (Captive & Outsourced) of the companies is located outside of Headquarter country
The increase in R&D spend drives up demand in Engineering R&D (ER&D) and Product Engineering Services (PES)
The post 2000 period saw emergence of new global hotspots and a shift of operations to Asia-Pacific and Central/Eastern European region
The service providers in the emerging regions are evolving as key strategic partners to R&D companies; They deliver ~35% of the overall ER&D and PES needs of R&D companies
Agenda
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1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
Global Service Providers Rating is an annual exercise at Zinnov in which we conduct a comprehensive analysis of the service provider landscape in ER&D and PES space
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Zinnov is a leading management consulting firm in India with a focus on helping its customer globalize their R&D / Product Engineering activities.
• With more than 125 active customers and close to 350 customer engagements in the last 10 years, Zinnov has been at the forefront of evangelizing Globalization of R&D.
• Zinnov works with a number of fortune 1000 companies and its key customers include Google, Microsoft, Yahoo!, Intuit, Amazon, Paypal, Honeywell, Hitachi, BOSCH, Schneider Electric, EMC, DELL, Samsung, LG, John Deere, Continental, Daimler etc.
GSPR 2009
• Zinnov conducted the first ever Rating of the top R&D service providers globally in 2009. Zinnov’s GSPR, quickly became a well accepted document as an objective analysis of the top Product Engineering Services Providers from Emerging Markets.
GSPR 2010 & 2011
• GSPR 2010 and 2011 was much more comprehensive and, ranked the top Product Engineering Service providers across 10 key verticals and 2 horizontals.
• The ratings of the exercise was shared at no cost with 100+ Zinnov customers, as well as a database of 14000 subscribers of our online reports, case studies etc.
• Zinnov’s GSPR has now established itself as one of the key components of the outsourcing play book of most of our customers
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GSPR 2012 was done across 10 major industry verticals
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Service Offerings
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Industry Verticals
Software Services E.g. system software, device drivers, user experience design etc.,
Embedded Engineering Services E.g. Embedded H/W, Embedded S/W, V&V
Mechanical Engineering Services E.q. CAD, CAM, CAE, etc
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1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
Methodology
Rating
Zinnov’s GSPR is a structured process and it begins with the filtered list of top 75 R&D service providers from initial list of 200+ service providers across geographies
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Rating Invitation
Data Collection and Analysis
Rating and Validation
1
2
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Initial Rating
RFI Response Collection Response Cleanup and Follow-up Clarification
Primary Research
Validation by
Zinnov Experts
Final Rating
Customer Feedback
Secondary Research
Secondary Research Shortlist of 75 companies
List of 200 Companies RFI Creation and Roll-out to 75 Co.
Based on: • R&D Service Landscape • Geographic Spread • Leadership Teams
Based on: • Vertical Presence • Focus on R&D / PES • Client Base & Business models • Organization Size
a
b d
c
Zinnov’s proprietary GSPR methodology is based on a robust framework that effectively quantifies qualitative data and subsequently uses a AHP model
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Data Point Classification AHP & Rating Scale
Rating & Zones Data Extraction & Rating
Methodology
AHP is a statistical model used for assigning weights to the dimensions and the data points. Rating point of 1 to 5 is
decided for each data point based on criteria
For all data points extracted from RFIs, corresponding rating was mapped in the Rating Scale
Companies were rated based on the scores arrived from the previous steps, using the parameter based modeler.
The vertical specific capabilities were then included to plot the companies in Zinnov Zones
Classification of company and vertical specific data points available from various RFIs
Look-up Score Rank
AHP Rating Scale
Data Point 1
Data Point 2
1 2 3 4 5
Results from the analysis were ported onto an AHP modeler to plot the relative positioning of service providers across the Zinnov Zones at a vertical level
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Nurture Zone Breakout Zone Execution Zone Leader Zone
Att
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• Acquiring new customers. • Building product engineering
competencies • Developing PES specific Sales
organization • Understanding the differences
between PES/ IT Service business
• Acquiring large customers • Growing existing accounts and
repeat business • Developing across the PDLC
competencies • Building domain capabilities • Building a product engineering
culture within the organization
• Growing small accounts into deep relationships
• Building Concept to Market Capabilities with deep domain expertise
• Building relevant IP’s • Executing on new & innovative
business models • Driving innovation culture inside
the organization
• Succeeding as go to market partner in emerging markets
• Building end to products of their own
• Building product management capabilities
• Scaling new vertical practices in PES to drive continued growth
• Focus on targeted customer segment and vertical
• Build technology competency in niche focus areas
• Focus on building credibility by delivering on initial projects
• Focus on PDLC Skill Development
• Focus on augmenting domain skills
• Work on building trust with existing customers
• Focus on IP creation • Focus on Account Mining and
execution on new business models
• Focus on internal and external innovation incubation efforts
• Focus on end customer of customers
• Drive customer led innovation • Build strong Go-To-Market
capability to become viable channel partner for customers
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Rec
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Init
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Zinnov Zones – Vertical Rating Model
Results from the analysis were ported onto an AHP modeler to plot the relative positioning of service providers across the Zinnov Zones at an overall level
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• Emerging Companies with Presence Across Multiple Verticals
• Focus on Building Competencies Across Multiple Verticals
• Developing Cross PDLC Competencies across multiple verticals
• Market Leaders across verticals • Presence Across Multiple Verticals • Strong Focus on IP Creation, Innovation
and Ecosystem Linkages across most verticals
• Excellent Breadth and Depth of Services across most Verticals
• High Scalability across most verticals
• Market Leaders in Niche Verticals • Well Established Competency in One or
Two Verticals • Excellent Breadth and Depth of Services
in Focus Verticals • High Scalability in focus verticals
• Emerging Companies in Niche Verticals • Focus on Building Niche R&D and Vertical
Competencies • Developing Cross PDLC Competencies in
Focus Verticals
Emerging Established
Niche
Expansive
Specialization, Scale, R&D Practice Maturity, Innovation & IP, Eco-System Linkages
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Zinnov Zones – Overall Rating Model
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1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
Methodology
Rating
Overall Rating
12
Emerging Established
Niche
Expansive
Specialization, Scale, R&D Practice Maturity, Innovation & IP, Eco-System Linkages
Ver
tica
l Co
vera
ge
Infosys
HCL
Wipro
iGate
Tech M & Mahindra Satyam
Sasken
L&T IES
Persistent
Symphony Teleca Infotech Enterprises
Beyondsoft
MindTree
Aricent Group
Virtusa Sonata Software
Cybage
Tata Elxsi
Luxoft
Clasoft Labs
EPAM Vanceinfo
Quest Global
GlobalLogic
Syntel
Aspire Systems Xchanging
Span Systems CoMakeIt
BlueStar Infotech
Mindfire Solutions
Aerospace and Defense
13
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Aerospace & Defense R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
HCL
Infotech Enterprises
Infosys
Wipro
L&T IES
Quest Global
Tata Elxsi
Luxoft
Clasoft Labs
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Eco-system Connect
Automotive
14
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Automotive R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
HCL Wipro
Tata Elxsi iGate
L&T IES
Infosys
Symphony Teleca
Infotech Enterprises
Luxoft
Eco-system Connect
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Computer peripherals and storage
15
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Computer Peripherals & Storage R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
HCL
Infosys
Wipro
L&T IES
iGate
MindTree
Symphony Teleca
Clasoft Labs
Eco-system Connect
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
BlueStar Infotech
Consumer Electronics
16
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Consumer Electronics R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
HCL
Infotech Enterprises
Sasken
Wipro
L&T IES
Tata Elxsi
iGate MindTree
Symphony Teleca
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Eco-system Connect
Consumer Software
17
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Consumer Software Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Innovation
Customer Type
Wipro EPAM
MindTree
Persistent Global Logic
VanceInfo
Aspire BlueStar Infotech
Sonata
Symphony Teleca
Cybage
• Capable of performing concept to Go-To-Market for the product
• Formal innovation culture, resulting in IP’s and strategic innovations
• Large Internet and Consumer ISVs
• Capable of delivering complete product development as a true engineering partner
• Reusable components IP’s built, and benefits quantified
• Large Internet and Consumer ISVs
• On the way into big league
• Innovation frameworks resulting in tangible benefit to customers
• Niche ISVs
• R&D and PES as a focus area
• Innovation, if at all, in process optimization
• Generic ISVs, Startups
HCL
Beyondsoft
Healthcare
18
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Healthcare R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
HCL
Infosys
Wipro
L&T IES
BlueStar Infotech
Tata Elxsi
iGate
Global Logic Persistent
Clasoft Labs
Tech M & Mahindra Satyam
Symphony Teleca
Infotech Enterprises
Aspire Systems
Eco-system Connect
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Industrial Automation
19
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Industrial Automation R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
iGate
HCL
Wipro
L&T IES
Eco-system Connect
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
ISV – Enterprise Software (Outsourced Software Product Development)
20
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Software/ ISV R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Innovation
Customer Type
Wipro
Virtusa
EPAM
MindTree
Persistent
Infosys
Global Logic
VanceInfo
Span Systems
Aspire Systems
Luxoft
iGate
BlueStar Infotech
Sonata Software
Symphony Teleca
Cybage
• Capable of performing concept to Go-To-Market for the product
• Formal innovation culture, resulting in IP’s and strategic innovations
• Worlds Largest ISVs
• Capable of delivering complete product development as a true engineering partner
• Reusable components IP’s built, and benefits quantified
• Large ISVs and Niche ISVs
• On the way into big league
• Innovation frameworks resulting in tangible benefit to customers
• Niche ISVs
• R&D and PES as a focus area
• Innovation, if at all, in process optimization
• Generic ISVs, Startups
HCL
Mindfire Solutions
Clasoft Labs
Beyondsoft Impetus Technologies
Xchanging
Semiconductor
21
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Semiconductor R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Innovation
HCL
Wipro
Sasken
MindTree
Tata Elxsi
Infotech Enterprises
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Eco-system Connect
L&T IES
Luxoft Symphony Teleca
Telecommunication
22
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Telecommunication R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
Aricent Group
Wipro
HCL
MindTree
Tech M & Mahindra Satyam
Luxoft
Persistent
Infosys
Sasken Global Logic
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Infotech Enterprises
Symphony - Teleca
L&T IES Beyondsoft
Span Systems
VanceInfo
Eco-system Connect
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
Xchaging
Transport
23
Low
High
Scalability
R&D Practice Maturity
Zinnov Zones – Leading Transport R&D Service Providers
Nurture Zone Breakout Zone Execution Zone Leadership Zone
Breadth
Innovation
Infotech Enterprises
L&T IES
iGate
• Capable of performing concept to Go-To-Market for the product –Significant investment in Lab infrastructure
• Niche capability across Engineering, Embedded and Software services
• Formal innovation culture, resulting in IP’s and strategic innovations
• Leadership role in alliances, leverage startups, Specific academic research, and co-creation with customers
• Capable of delivering complete product development as a true engineering partner, Customer Labs
• Niche capability spans across two service types and at least generic capability level in one service type
• Reusable IP’s built, and benefits quantified
• Alliances with Customers who are
Industry Leaders
• On the way into big league, delivering R&D services effectively, tear down , purpose fit labs
• Generic Capability across Engg, Embedded and Software services and Niche capability in one area
• Innovation frameworks resulting in tangible benefit to customers
• Specific industry alliances, partnerships and membership in Global forums
• R&D and PES as a focus area
• Niche capability in one type of PES service (Engineering / Embedded / Software)
• Innovation, if at all, in process optimization
• Generic - MoUs with universities and alliances
Infosys
Eco-system Connect
Agenda
24
1 Zinnov – Global Service Provider Rating
2 GSPR 2012 Market Leader: Analysis & Insights
India is the world’s leading offshore ER&D and PES destination with ~22% market share in the R&D offshoring segment
25 Note: Source: Zinnov Research and Analysis
FY2011 FY2012
13
14.7 Growth in ER&D
Exports (USD Billion)
The ER&D, PES revenue grew by 13% over FY 2011
ER&D and PES segment contributes 19% of the Indian IT Exports India has close to 850+ MNC captive centers and 85+ service providers
delivering a wide range of ER&D & PES services
15 of the top 20 Global Service Providers in ER&D and PES space are Indian
Telecom, ISV and Semiconductor are the largest verticals in the ER&D and PES space
26
Semiconductor
11%
Telecom 19%
Automotive 8%
Aerospace 4%
Computing Systems
7%
Consumer Electronics
6% Others* 10%
Medical Devices/He
althcare 3%
ISV(OSPD) 32%
Others: Cons,Infra, Heavy Machinery, Energy, Industrial/Industrial Automation)
0%
20%
40%
60%
80%
100%
FY 2012Revenue
Distribution
ServiceProviders
CaptiveCenters
MNC Captive centers = 11%
Service Providers = 16% Pe
rcen
tage
Growth Rates in ER&D and PES
Vertical wise revenue distribution FY 2012 ER&D and PES Services
Captive & Service Provider Analysis
Service Providers contribute close to 36% of overall ER&D and PES revenues; Software and Telecom are the verticals that are most catered to by service providers
27
Verticals Presence
Aerospace & Defence
Automotive
Cloud computing
Consumer electronics
Consumer software
Computer Peripherals & Storage
Enterprise Mobility
Healthcare
Industrial Automation
ISV
Semiconductor
Telecom
Transport
Cost pressure, Access to flexible capacity,
local market access for growth and decreasing time to market are some of the key reasons of driving ER&D/PES offshoring
Indian ESPs have been expanding their capabilities across new verticals such as Aerospace, Consumer Electronics, Healthcare etc.
Industry Automation being the most underpenetrated vertical still offers a large scope of growth for service providers
<20 %
Number of companies present in verticals (by % of total companies covered under GSPR )
20-30% 30-50% 40-50% >50 %
Service Providers have built strong capacity of experienced professionals in Telecom, Automotive and Consumer Electronics are other verticals with a better revenue mix
28 Note: Transport & Industrial Automation verticals were not included as the data was not sufficient to arrive at conclusive figures Source: Zinnov Research and Analysis
Service Provider Experience Pyramid ( Number of Years of Experience)
58% 49% 52%
59% 59% 59% 50% 54%
27%
33% 34%
29% 28% 29%
29%
33%
9% 12% 9% 8% 8% 9%
15% 9%
6% 6% 5% 4% 5% 4% 6% 4%
Aerospace &Defence
Automotive Consumerelectronics
ComputerPeripherals and
Storage
Healthcare ISV Semiconductor Telecom
0-5 5-10 10-15 15+
Vertical Growth Insights
29
Verticals Presence
Aerospace & Defence
Automotive
Consumer electronics
Computer Peripherals & Storage
Healthcare
Industrial Automation
ISV
Semiconductor
Telecom
Inorganic growth in Aerospace came through Quest Global’s acquisition of GKN Aerospace - In Aerospace, Infotech & HCL were the major contributors to the growth
Companies like HCL and Igate grew in the
Automotive space
Even though, there was a growth across the board in the consumer electronic space it was not significant and hence posted a single digit growth
Telecom witnessed a de-growth in revenues across
major telecom R&D service providers The growth in Healthcare/Medical devices was
restricted to only the Industry leaders; Global Logic significantly increased its capacity in this vertical
The growth in Computer Peripherals & Storage
vertical was led by Wipro
In their quest to improve the domain and technical capabilities the Service Providers have significantly invested in improving the quality of experience pyramid
30
Improved Quality of Experience Pyramid
56%
28%
11% 4%
0-5 yrs 5-10yrs 10-15 yrs 15+ yrs
Experience Pyramid(2011) Experience Pyramid(2012)
54%
30%
12%
4%
0-5 yrs 5-10yrs 10-15 yrs 15+ yrs
Billing Rates
31
25
20
10
45
27 25
0
5
10
15
20
25
30
35
40
45
50
ProjectManagement &
Consulting
Design &Development
Testing &Support
Minimum Maximum
33.5
Average and Range of Offshore Billing rates in USD/Hour
70
45 40
120
95
70
0
20
40
60
80
100
120
140
ProjectManagement &
Consulting
Design &Development
Testing &Support
Minimum Maximum
Average and Range of Onsite Billing rates in USD/Hour
23.27
18.01
85.00
60.95
45.00
Average
The mature delivery models, adopted by Indian service providers enables them to offer multiple pricing options and hence still remain competitive
32 Note: Source: Zinnov Research and Analysis
Model Tren
d Insights
BOT
Risk Reward
Revenue Share
Fixed Price
Time & Material
• BOT model has the least number of clients and engagements out of all Business Models • Telecom vertical has seen a maximum increase in the number of engagements over the
last year • ISV and Computer Peripherals & Storage are verticals in which BOT model is not
followed
• Both the number of clients and number of engagements have increased for the Risk reward model
• Aerospace, and Telecom verticals have the maximum adoption of Risk reward model
• The number of clients have remained same for the revenue share model, however there has been an increase in the number of engagements
• Telecom verticals has the maximum adoption of Revenue share model, it witnessed both an increase in the number of clients and number of engagements
• Fixed price is the second most preferred business model across all verticals except Transport vertical where it is the most preferred model
• Fixed Price model has seen a tremendous increase in adoption in the Automotive, Consumer Electronics, Healthcare and ISV verticals
• Time and Material continues to be the most preferred business Model across all verticals expect Transport
Thank You
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