XYZ Industry Ecosystem

Transcription

1 Contents Terms & Definition Used In The Industry XYZ Industry Landscape XYZ Industry Ecosystem Opportunity Assessment Competitive Scenario (Page xx xx) (Page xx xx) (Page xx xx) (Page xx xx) (Page xx xx) Key terms used in the XYZ Industry and explanations thereof Present and future scenario of XYZ Industry in India Major supply side stakeholders involved in Indian XYZ Industry, their roles, influence and power play among them Opportunity assessment of XYZ Industry in India, entry options and road map Competitive analysis against key parameters 2 Contents

2 Overview of Indian XYZ Industry 3

3 Industry Evolution: XYZ Industry has picked up pace in the last 2 3 years Key Historic Trend Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac 20xxs: growth in XYZ Industry Reasons Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Mid 20xxsKey Development in usage practices Key reasons for the same Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Early 20xxs: Key Development in usage practices Key reasons for the same Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Mid 19xxs: Key Development in usage practices Key reasons for the same Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Early 19xxs: Key Development in usage practices Key reasons for the same Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Recent Trend Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac 4 Industry Landscape

4 XYZ Industry Standard Background Origin of the standard in specified market, importance of the Standard in the market Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Standard 1: Key Parameter Standard 2: Key Parameter Standard 3: Key Parameter Standard Definition Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Standard Definition Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Standard Definition Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Standard 4: Key Parameter Standard Definition Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac 5 Definitions

5 Evolution of the standards as key differentiating factors in the market Standard Evolution and usage Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Key events Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Case in point: Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Standard usage as key differentiator Events, Competition practices, usage Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac 6 Definitions

6 Product of interest compliance and perceptions regarding standards in India Factors affecting general industry wide perceptions Current perceptions among key industry stakeholders Factor 1 Factor 2 Industry perception formation Result Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Factor 3 7 Definitions

7 Key attributes of Indian XYZ Industry ABC forms a major part of the overall XYZ Industry; as equipment sales forms a major part of this business Dominated by stakeholders like stakeholder names ABC design and implementation dominated by Player 1 and Player 2 End Users Business Model ABC Large size end users have invested heavily in setting up ABC Penetration of ABC in medium sized end users is still low, compared to large sized end users Small sized end users have primitive Product of interests, although they have moved towards consolidated architecture of computing resources Business Model PQR PQR space forms a small part of the overall XYZ Industry; as relatively low value service contracts form a major part of this business Highly organized market with top 5 players accounting for 87% of the market Highly polarized market where leading players dominate key end user segments These service contracts are based on pay as per use models, which are distributed over 2 3 years and sometimes even longer periods Dominated by stakeholder firms like names research specific service providers also exist in this market, is a major player within this category End Users Manufacturing and asdf & ITeS users are major adopters of PQRs in India Within the BFSI segment, 8 Industry Landscape

8 Broad Standard of PQR Service Providers Category A Competition Category B Competition Category C Competition Definition Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Size and Universe 9 major players offering PQR services; also have pan India data connectivity licenses 8 10 players major players Around other major Category C Competition of different types present across India, catering to local and regional demand Key players Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Business model PQR services form a small part of overall business Approximately 10 revenues are generated from PQR services PQR services form a major part of the business PQR services contribute more than 5 of overall revenues in case of major players Approach to market Target existing customer base to increase wallet share Primarily target large space requirement opportunities from key customer segments Target small and large customers Have highly customized service offerings with diverse levels of service delivery Offer their services bundled with Product of interest services Target small and medium sized organizations across customer segments for Product of interest outsourcing Geographical reach Have pan India reach through regional offices and representatives Have an extensive channel network to cater to demand across India Cater to regional and local demand for Product of interest services Key customer segments asdf & ITeS, Manufacturing, BFSI, Telecom and Government asdf & ITeS, Manufacturing, BFSI and healthcare asdf & ITeS, Manufacturing, Education and other segments like Logistics, Hospitality and Travel 9 Definitions

9 PQR service categories PQR services Classification 1 (Service Level Oriented) Classification 2 (Technology Oriented) Classification 3 (Solution Oriented) Service Type 1a Service Type 2a Solution 3a Service Type 1b Service Type 2b Solution 3b Service Type 2c Solution 3c Service Type 2d Solution 3d PQR service combinations Classification 1 Classification 2 2a 2b 2c 2d Service Type 1a Service Type 1b Solution 3e Solution 3f Solution 3g 10 Definitions

10 Service definitions Service Service Definition Key value proposition Service Name Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Benefits of a standardized Product of interest Service Name Service Name Service Name Service Name Service Name Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Capital expense converted to operating expense Dedicated resources as against shared Low cost, operating expense based Saving on human resources Useful for applications requiring low levels of administration or when end user wishes to retain control 11 Definitions

11 PQR market in India is estimated at XXX Mn in FY 12 PQR market (In Value) Available PQR space (In Volume) Key Players Drivers Challenges Trends Key drivers of growth Key challenges in the industry Key trends in the industry Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis ultrices mauris justo, ac 12 Industry Landscape

12 Indian XYZ Industry split by Players, Segments and Services Share of Key Players In Indian Product of interest Market by Value 14% 15% 15% 5% 19% 32% Top Player 1 Top Player 2 Top Player 3 Top Player 4 Other Competition Competition of interest Indian PQR Market in FY 12 Share of Key End User Segments by Value 4% 4%4% 5% 4% 8% 6% 25% 4 IT & ITeS Manufacturing Retail & e Commerce Healthcare Logistics BFSI Telecom Government Others Market share by product attribute 1 (in Value Terms) Value figures Volume figures Market Share by product attribute 2 (in Value Terms) 55% 45% Attribute 1a Attribute 1b Growing at a CAGR of ~31% since FY 10 32% 4% 1% 63% Attribute 2a Attribute 2b Attribute 2c Attribute 2d 13 Industry Landscape

13 asdf & ITeS and manufacturing segments are major contributors to PQR revenues; other major segments include BFSI, Telecom & Healthcare Segment composition of various competition categories Share of Key End User Segments by Value 1% 4% 4% 4% 4% 18% 25% FY 12 Market = Value terms Share of customer segments in Product of interest revenues % 26% 18% Other Competiti 4% 4% 3% 3% 1% 1 8% on asdf & ITeS and Manufacturing segments contribute the highest to PQR revenues across all categories of players BFSI, Telecom and Government sectors are the major users of ABC and hence not the major revenue generators for PQR Services 30 27% 13% 2 13% Category B Competition Revenue 7% 2% IT & ITeS Manufacturing BFSI Government Healthcare Telecom Education Others* * Logistics, Hospitality, Travel, Media & Entertainment, Retail & e Commerce 14 Industry Landscape

14 Currently Service type are the highest selling services across Category A Competition and research specific service providers; Service type contributes the least to PQR service revenues Service composition of various competition categories Revenue () % 55% 53% Competition Category 1 Share of services in Product of interest revenues 30 47% Competition Category 2 Managed Services Un - Managed Services % 3% 1% 32% 4% ISP Players Co-Location Dedicated Servers % 23% Pure Play TPDCs VPS Servers 10 Shared Servers Category A Competition account for more than 9 of PQR Market in India and hence dictate the market trends Un managed services currently account for more than half of the revenue in PQR business; however managed services expected to drive this market in the future Co location services currently account for more than 6 of PQR revenues, however dedicated services expected to continue to grow in the future Shared hosting accounts for only 5% of overall PQR revenues 15 Industry Landscape

15 Industry Ecosystem 16

16 Value Chain of XYZ Industry 17 Industry Ecosystem

17 Both Forward and Backward integration and Diversification are taking place in this industry Forward Integration Internet service providers providing PQR services. Example: Tata, Reliance, Spectranet, Netmagic, etc. asdf hardware suppliers offering system integration services for building ABC. Example: HP, HCL etc. Non asdf hardware manufacturers offering services for building ABC. Example: Emerson, APC etc. Software suppliers offering cloud computing services. Example: SAP, Microsoft, etc. Backward Integration Large conglomerates building hybrid (both for captive use and for providing Product of interest services to group companies and subsidiaries) Product of interests. Example: MAX, Citigroup, etc. Diversification Power utilities acquiring Category A Competition licenses. Example: PGCIL Large conglomerates present as power utilities as well as Category A Competition. Example: Reliance & Tata System Integrators and Consultants acting as Product of interest space Category C Competition. Example: HCL, Wipro, BPR Consultants, etc. PQR service providers offering cloud computing services PQR service providers building ABC 18 Industry Ecosystem

18 Secondary Stakeholders Primary Stakeholders Industry stakeholders and their roles (1/2) End Users Product of Interest Power Utilities Category A Competition Stakeholders Category A Competition Roles and key players Provide bulk communication network to Category B Competition and last mile connectivity to end users Most also present in the PQR market DC Players Cloud Service Providers Hardware Suppliers Software Suppliers asdf hardware suppliers Server, storage and network equipment manufacturers Key players: HP, Dell BPR Consultants Need identification and assistance to select vendor/ System Integrator BPR consultants Ernst and Young, Infosys, KPMG Non Hardware Suppliers Non asdf hardware suppliers Includes UPS, PAC, Racks Key players APC, Emerson BPR Consultants System Integrators System Integrators Provide end to end solutions to design, build and manage a Product of interest Key players: TCS, Wipro, HCL, HP Product of interest Design Consultants Product of interest design consultants Gather requirements and design the Product of interest Key players: TCS, HP, Schnabel, Susan Direct Influence Building Contractors Indirect Influence Building contractors Build the Product of interest as per specifications provided by the user or System Integrator Key player: L&T 19 Industry Ecosystem

19 Industry stakeholders and their roles (2/2) Stakeholder Industry scenario Role in the Industry Power Utilities Indian power sector is dominated by government owned utilities Power Grid Corporation of India Limited manages interstate transmission of power Network Providers Hardware Manufacturers Non Hardware Manufacturers Software Suppliers Influencers and Intermediaries Indian telecom sector is dominated by private players The industry is presently facing business challenges, due to recent government policies Product of interest equipment market is dominated by Dell, HP, Cisco, etc. Emerson and APC are the leading companies in India, who are also engaged in Product of interest design and implementation Indian software industry is highly mature Presence of global leaders System integrators, BPR consultants, Design consultants, Contractors and Facility management companies Presently power utilities play a negligible role in the Indian XYZ Industry PGCIL recently acquired network licenses Primary providers of telecommunication networks The first ones to introduce PQRs in India PQR providers prefer a carrier neutral network and thus seek tie ups with companies like NIXI Select PQR players have network licenses Almost all PQR service providers have easy access to these technologies Influence end user segments on decisions regarding building own Product of interests or outsourcing to commercial DC Have high negotiating power Have strong tie-ups with Influencers and Intermediaries Low negotiating power due to availability of similar competing products Few PQR service providers also have in-house software development teams Influence end user segments on decisions regarding building own Product of interests or outsourcing to commercial DC System integrators also act as suppliers to the XYZ Industry 20 Industry Ecosystem

20 Effect of various stakeholders on XYZ Industry High High Current & Future Impact of supply side stakeholders on XYZ Industry Datacenter Software Suppliers Power Network High Relative Business Interest Levels of Major Stakeholders in XYZ Industry al Datacente r services Neutral 0 High Datacenter Non - IT Hardware Equipment Suppliers Current Trend Positive Impact Zone Datacenter IT Hardware Equipment Suppliers Future Trend Negative Impact Zone Private investments in Power sector, coupled with the entry of new Product of interest asdf hardware players, to have a positive impact on PQR business High Cloud Services ISP Firms Pure Play Firms IT Hardware Suppliers Application Software Suppliers Non IT Hardware Suppliers Captive Datacente r Services Business interests of various stakeholders show high inclination towards XYZ Industry 21 Industry Ecosystem

21 Business interests of key stakeholders (1/2) Stakeholders Category A Competition companies Pure Play companies Competing markets PQRs ABC Relative Interest Level High Medium Reasons Have invested in building large capacities To capture higher share from existing enterprise customers Have extensive experience in setting up Product of interests Consulting and system integration opportunities High value premium services Exhibits Total PQR capacity of Category A Competition account for approximately 8 of overall commercial space available in India Category A Competition offering design & build services: Reliance, Netmagic and Tulip Relative Interest Level High Low Reasons Core business activity ROI pressures Direct substitute to existing business Exhibits ROA of Ctrl S was <1% in FY 11 & That of ESDS was <7% in FY 11 None of the companies offers ABC services Cloud solutions Medium Less experience in user specific application support Emerging market Category A Competition offering cloud services include: Reliance, BSNL & Airtel Medium Emerging market Capacity utilization To gain market share Companies offering cloud services include: Ctrl S, ESDS, Net 4 Indi etc. 22 Industry Ecosystem

22 Business interests of key stakeholders (2/2) Stakeholders asdf Hardware companies Application Software companies Competing markets Relative Interest Level Reasons Exhibits Relative Interest Level Reasons Exhibits PQRs Medium Only hardware selling and maintenance opportunity Relatively lower deal per end user Not Applicable High Better account management Potential to have strategic tie ups Potential to offer collaborative solutions PQR service providers have been collaborating with application software companies to provide end to end solutions to end users ABC High System integration and consulting opportunity Large turnkey projects Premium value market asdf hardware companies offering captive Product of interest services include: HP, and HCL Medium Licensing issues Account management costs For example, Microsoft has been campaigning for enterprise wide licensing Towards this, the company has outsourced tracking of licensing to a few companies Cloud solutions Medium Emerging market Opportunity to sell bundled hardware Market requires different sets of hardware capabilities HP and offer cloud services High Higher margins Regular and frequent cash flow Few issues in licensing Potential to address a larger market Cloud offerings in India by major software providers include ERP, CBS Solutions 23 Industry Ecosystem

23 Impact of Power Utilities on PQR Business Major Private Players: Tata Power, Reliance Energy, Torrent Power 1 High High High 6 5 Current Trend Positive Impact Zone Future Trend Further investments by private sector to have positive impact on PQR business Negative Impact Zone Parameters Current Impact Reasons Future Impact Reasons Concentration of power industry with respect to XYZ Industry Dependence of a Product of Interest on public power sources Ability of a Product of Interest to set up a captive power source Do Category B Competition make relationship based investments in power generation, transmission & distribution Do power utilities pose a threat by offering DC services Can power utilities offer different prices to different Category B Competition Public sector dominates the power industry Few options are available to Category B Competition for sourcing power Power sector dominated by public sector High dependence of Category B Competition on public power sources High investments required to build captive power source Low availability and high costs of fuel Increases service costs in order to have adequate ROI, which is perceived as unnecessary to fulfill certification criteria Except for Reliance and Tata, who also have their own power business, no such trend been observed as of now Power utilities have invested in setting up Product of interests for their internal operations Due to high regulations in the power distribution sector, power utilities cannot offer different prices to different Category B Competition Higher involvement of private sector in transmission and distribution Increasing investments in power by private players Government initiatives to promote private investments in the power sector Existence of power exchange has enabled relatively easy sourcing of power, but at very high costs Trend towards setting up of captive power sources Tier 3 & 4 certification seen as a major marketing tool to gain stakeholder trust Opening up of power transmission and distribution to private sector might see such investments; however the probability of a Product of interest player investing in power is low PGCIL has recently acquired connectivity licenses and is planning to foray into PQR space Regulation of power tariffs expected to continue in India Emergence of power exchanges coupled with shortage of power in India will not provide relief to the private sector in procuring power at lower costs 24 Industry Ecosystem

24 Impact of Network Providers on PQR Business Major Players: Reliance & BSNL 1 High 1 Parameters Current Impact Reasons Future Impact Reasons Concentration of Category A Competition industry with respect to XYZ Industry Category A Competition industry dominated by a few large players; Presence of many medium, small and regional players New licenses have been issued Smaller players also entering the market High Dependence of a Product of Interest on outside Category A Competition Ability of a Product of Interest to have its own network Low dependence to commence operations Multiple providers available for a location research specific service providers have obtained network licenses in the past New licenses could become expensive Category B Competition could begin to acquire regional network licenses High 5 Current Trend Positive Impact Zone 4 3 Future Trend Negative Impact Zone Turbulence in telecom sector to have negative impact on PQR business Do Category B Competition make relationship based investments in connectivity Do network providers pose a threat by offering Product of interest services Can network providers offer different prices to different Category B Competition Category B Competition do not invest in the network of IPSs Leading Product of Interest service providers are the ones who have their own network Network providers offer different prices to different Category B Competition Similar trend expected to continue Similar trend expected to continue Similar trend expected to continue 25 Industry Ecosystem

25 Impact of Hardware Suppliers on PQR Business Major Players: HP, and Dell 1 High High Parameters Current Impact Reasons Future Impact Reasons Number of Product of interest asdf hardware suppliers in India 8-10 players lead the Product of interest asdf hardware industry Product of interest server market dominated by, HP, Dell Product of interest storage market dominated by EMC and NetApp Product of interest network switches market dominated by Cisco HP is present in all the above three markets, while asdf is present in both server and storage market Lenovo recently announced its entry into the Product of interest server market Dell has recently launched its storage business; it earlier had a tie up with EMC High Do Category B Competition account for a major part of Product of interest asdf equipment business of a typical supplier Category B Competition account for the highest percentage of Product of interest grade asdf equipment of these suppliers Trend towards PQR would only increase the share of Category B Competition in Product of interest grade server business of these suppliers Current Trend Positive Impact Zone Future Trend Negative Impact Zone Entry of more Product of interest hardware suppliers to have positive impact on PQR business Do Category B Competition have any strategic tie-ups with Product of interest asdf equipment suppliers Do Product of interest asdf equipment suppliers pose a threat of by offering Product of interest services Can Product of interest asdf equipment suppliers offer different prices to different Category B Competition Most of the Category B Competition have a good working relationship with all asdf hardware equipment suppliers Category B Competition use brands which are requested by the end user asdf equipment suppliers in India have not yet set up PQRs They usually rent space from Category B Competition asdf Hardware equipment suppliers offer different prices to different Category B Competition Similar trend expected to continue Similar trend expected to continue Similar trend expected to continue 26 Industry Ecosystem

26 Impact of Software e Suppliers on PQR Business Major Players: SAP, Microsoft & Oracle 1 High High High 5 4 Current Trend Positive Impact Zone 3 2 Future Trend Negative Impact Zone With the availability of adequate number of options, software suppliers will have a positive impact on PQR business Parameters Current Impact Reasons Future Impact Reasons Number of Software suppliers in India Do Category B Competition account for a major part of the software business of a typical supplier Do Category B Competition have any strategic tie-ups with software suppliers Do software suppliers pose a threat by offering Product of interest services Can software suppliers offer different prices to different Category B Competition Database software is led by Oracle and Microsoft SAP is the leading ERP supplier for large & medium companies Many companies exist for Cpanel and DCIM software Many medium & small companies offer end user specific solutions asdf, Software companies largely target individual end users Similar trend expected to continue Similar trend expected to continue Yes Similar trend expected to continue qwgfre Similar trend expected to continue Yes Similar trend expected to continue 27 Industry Ecosystem

27 Impact of Non Hardware suppliers on PQR Business Major Players: Emerson & APC Parameters Current Impact Reasons Future Impact Reasons High Number of Product of interest Non asdf hardware suppliers in India Many leading companies exist in Power Backup Industry, like Emerson, APC, Libert, Socomac, Eaton, Powerware, Chloride, Delta, etc. May leading companies exist in HVAC and PAC Industry, like Blue Star, Daiken, Voltas, Carrier, Trane, Kirloskar etc. Similar trend expected to continue High 2 Do Category B Competition account for a major part of Product of interest Non asdf equipment business of a typical supplier Office and Industrial sales account for a large portion of revenues of these players; Product of interests account for a relatively smaller portion of the overall business Similar trend expected to continue High 4 Current Trend Positive Impact Zone 3 Future Trend Negative Impact Zone With the availability of adequate number of options, non asdf Hardware suppliers will have a positive impact on PQR business Do Category B Competition have any strategic tie-ups with Product of interest Non asdf equipment suppliers Do Product of interest Non asdf equipment suppliers pose a threat by offering Product of interest services Can Product of interest Non asdf equipment suppliers offer different prices to different Category B Competition asdf Similar trend expected to continue asdf Similar trend expected to continue Yes Similar trend expected to continue 28 Industry Ecosystem

28 Low Low Medium Medium High Potential to grow the market High Impact of various stakeholders on PQR Business Level of Importance & Influence of major stakeholders on XYZ Industry Importance Power Utilities IT Hardware Suppliers Impact Levels of major stakeholders on future growth of XYZ Industry ISP Firms End Users Application Software Suppliers End Users ISP Firms Pure Play Firms Application Software Suppliers Pure Play Firms IT Hardware Suppliers Power Utilities Non - IT Hardware Suppliers Non - IT Hardware Suppliers Low Medium High Influence Power to drive the market Low Medium High Due to strong relationships between asdf hardware suppliers & software suppliers coupled with their high influence on end users will continue to bring challenges for XYZ Industry to acquire new customers 29 Industry Ecosystem

29 Growth Ongoing investments in large ABC, coupled with capacity growth in PQRs, has enabled the XYZ Industry to grow in spite of economic slowdown Strong growth despite poor GDP growth numbers XYZ Industry Versus GDP Growth GDP Datacenter Industry % 8.3% 8.3% 11.4% 6.2% 11.9% % % 6.6% Key growth driver for Product of interest market is the ongoing investment in large ABC, coupled with the capacity growth witnessed within the PQR service provider space Indian Product of interest managers are becoming increasingly concerned about facilities (power, cooling and space) and disaster recovery (DR) for reasons of cost optimization. Virtualization-led consolidation strategy is also a common thread across most Product of interests in India, which would result in moderate capacity growth in ABC 30 Opportunity Assessment

30 Recent and planned additions in PQR capacity by most players in anticipation of future demand, indicates good prospects for XYZ Industry Huge capacity additions planned by Category A Competition anticipating the future demand in the market Under Execution ISP Players Capacity Addition Product of interest Space (in Sq- Ft) Pure Play Commercial Datacenter Players Current Capacity Category A Competition players (having a dominating position in the market) have recently invested in expanding their Product of interest space anticipating future increase in demand research specific players are planning to build additional Product of interest space in anticipation of reaching maximum capacity utilization 31 Opportunity Assessment

31 Market Size till 2015 Decreasing bandwidth costs and increasing bandwidth support coupled with cost pressures and increase in Product of interest complexity PQR business will be the next choice for asdf managers To grow at a CAGR of ~12% until 2015 Captive Datacenter Market High investments and long gestation period usually experienced by enterprises High real estate and power costs, lack of adequate infrastructure and skilled workforce Growing complexity of Product of interests requires complex Product of interest management techniques would drive users to adopt pay per use models like third party Product of interests and cloud computing Decreasing bandwidth to drive higher adoption of PQRs Increased bandwidth support for complex data heavy applications and need for accessing these applications across geographies India has the potential to be a hub for markets in the Middle East, East Africa and Southeast Asia Commercial Datacenter Market To grow at a CAGR of ~26% until 2015 Private cloud has already gained ground Rise of public and hybrid clouds National Cloud Computing Initiative by Indian government to set up Mobile Service Delivery Gateway To grow at a CAGR of ~31% until 2015 Cloud Computing Market Market Growth Rate till Opportunity Assessment

32 Market Size until 2015 Five key segments would drive growth in XYZ Industry Traditional segments where usage of PQRs is relatively high These two segments will continue to contribute approximately 65% of overall PQR market asdf adoption in SMBs will increase further, which in turn will drive these two segments to be the highest contributors to XYZ Industry Figures indicate PQR segment size as of FY 12 BFSI $Mn IT & ITeS $ Mn Manufacturing $ Mn Healthcare $ Mn Segments that will drive growth of PQRs Government $ Mn Retail & e Commerce $ Mn Logistics $ Mn Telecom $ Mn Segments that will offer the next phase of growth Market Growth Rate till 2015 With a growing number of Retail & e commerce companies coupled with their focus on pay per use models will increase adoption of PQRs in this segment Current turbulence in the telecom market will place further pressures on cost control and thus the need for outsourcing; with increase in data traffic, VAS companies would require flexible asdf infrastructure for up scaling and down scaling on a real time basis Adoption of technologies like GPS and real time tracking coupled with unavailability of adequately skilled manpower, will drive growth in PQR usage in this segment 33 Opportunity Assessment

33 Estimated Future Product of interest Market in India (Methodology) Current capacity utilization levels Forecasts from all three methods crosschecked and validated from industry experts and available secondary sources to arrive at final estimates Growth of asdf in user segment Contribution from both services added to arrive at overall PQR market Contribution from both services added to arrive at overall PQR market Contribution from all segments added to arrive at overall PQR market Planned future capacities Technological changes, trend & shift in usage PQR market for each service type (Co-location & Hosting) forecasted based on usage and growth rates obtained from supply side PQR market for each service type (Managed Services & Un-managed services) forecasted based on usage and growth rates obtained from supply side Segmental PQR market projected based on segment usage and growth rates obtained from supply side Impact of substitute asdf Existing market for PQRs in each segment established from supply side Growth rates obtained for the respective segments, services and players Macroeconomic factors and market dynamics 34 Opportunity Assessment

34 Estimated Future Product of interest Market in India Cloud Services Market estimated to grow at 33% CAGR until 2015 Captive Product of interest Market estimated to grow at 11% CAGR until 2015 PQR market (In USD Mn) Un-managed services estimated to grow at 18% CAGR until Hosting Services estimated to grow at 28% CAGR until 2015 Managed Services estimated to grow at 26% CAGR until Co-location Services estimated to grow at 19% CAGR until 2015 Contribution from asdf & ITeS estimated to grow at 21% CAGR until 2015 Contribution from Manufacturing estimated to grow at 18% CAGR until 2015 Contribution from Retail & e-commerce estimated to grow at 28% CAGR until 2015 Contribution from Logistics estimated to grow at 29% CAGR until 2015 Contribution from Telecom estimated to grow at 35% CAGR until Opportunity Assessment

35 Many routes are available for entering the Indian PQR market; few of these routes include setting up of new Product of interests Available entry routes Entry options for qwerty JV with a stakeholder and setting up of a new PQR Option 5 has not been considered for further evaluation as qwerty is not interested in this entry route Acquiring stake in an existing PQR Alliance with a network provider Joint venture with Power Utilities Joint venture with asdf Hardware and Software Suppliers Setting up of a PQR on its own Opportunity Assessment

36 Several routes are available for entering the Indian PQR market; few of these routes include setting up of new Product of interests Existing companies in the Market which can be considered for JV / Collaboration Entry Route Option 1: Acquiring a stake in PQR Option 2: Alliance with a network provider Option 3: Joint venture with electricity provider Option 4: Joint venture with asdf hardware and software suppliers Key players can be considered for JV / Collaboration Host right now, Net 4 India, T-Rex Networks, Ctrl S, Cyquator Technologies, ESDS, Go 4 Hosting Sify Technologies, Spectranet, Tata communications, Tulip, Vodafone, Aircel, NICSI etc. Almost all power distribution utilities have set up their own Product of interests; PGCIL has obtained an Category A Competition license and is planning to enter the PQR business Large players like HP, asdf, Dell have rented Product of interest space with existing PQR, other players like Wipro can be looked at Many software companies are present in India which have industry specific solutions, these are largely dependent on asdf hardware suppliers for implementing their solutions 37 Opportunity Assessment

37 Evaluation of various routes to market entry Stake Acquisition Joint Venture Business Consideration Existing PQR Alliance with Network provider Need to set up a new Product of interest Access to PQR market Time taken to scale up Access to critical input resources Control of business operations Ability to offer bundled end to end solutions Ability to negotiate a cheaper entry deal Access to large untapped customer base Power Utilities asdf Infrastructure suppliers asdf Hardware Suppliers Software Suppliers Above comparison indicates that acquisition of an existing Product of interest is the best entry route for qwerty in PQR business in India Disadvantageous Position Moderately Advantageous position Advantageous Position 38 Opportunity Assessment

38 Based on qwerty s interests, acquiring a Pure Play company is more advantageous to enter the Indian PQR Market Evaluation of entry option #1 Business Consideration 10 stake acquisition opportunity Capture larger portion of the market Stake Acquisition in existing PQR Access to critical resource vis à vis network at lower cost Control of business operations Ability to negotiate a cheaper entry deal Availability of options in terms of companies Category A Competition companies Pure Play companies Given the current FDI limit in the telecom sector, the maximum stake qwerty can acquire in an Category A Competition is 74% Since most of the Category A Competition companies are parts of very large telecom companies (who would not be willing to sell stake), the options in this category are relatively limited The above comparison indicates that acquisition of Pure Play Company is a relatively more beneficial entry route for qwerty Disadvantageous Position Advantageous Position 39 Opportunity Assessment

39 Revenue in Mn USD Highly organized market mainly driven by Category A Competition; Category B Competition are smaller players in this market Key players will focus on Managed services to drive the next phase of growth in this industry Revenue comparison among the players of interest Reliance IDC Airtel Sify Tulip Netmagic Tikona Cntrl S ESDS BSNL Spectranet GPX Cyquator PQR market in India is highly organized top 5 players account for 87% of the market; Telecom Operators are the key players in this market Share of Managed Services 175Reliance IDC Airtel Sify Tulip Netmagic Tikona Cntrl S ESDS BSNL Spectranet GPX Cyquator Competitive Scenario

40 Large players nearing the full capacity utilization of their Product of; planning for additional this business More than the at present Available Capacity & Capacity utilization comparison among players of interest Available Product of interest Space (in sq-ft) Reliance IDC 650,000 Sify Cntrl S 240,000 Netmagic 200,000 Tulip 100,000 Tikona BSNL Spectranet ESDS GPX Cyquator 70,000 63,500 55,000 50,000 35,000 35,000 25,000 90, , ,000 Airtel 300,000 Capacity utilization of large players is between 70 9; These players are planning for additional Mn sq-ft space in coming days and will drive the growth of this industry Reliance IDC Sify Airtel Cntrl S Tulip BSNL Spectranet Capacity Utilization (in %) Netmagic Tikona ESDS Cyquator GPX Competitive Scenario

41 Comparison among players based on revenue from various services Player Name Co-Location (63% Share) Dedicated Hosting (32% Share) Virtual Private Servers (4% share) Shared Servers (1% Share) Managed Services (45% Share) Un-Managed Services (55% Share) Reliance IDC Airtel Sify Tulip Netmagic Tikona Spectranet BSNL Ctrl S ESDS GPX Cyquator Revenues Revenues Revenues Revenues 42 Competitive Scenario

42 Comparison among players based on revenue from various end user segments % % 22 15% 21% 23 15% 23% 23 8% 1% 49% 22 16% 1 7% % 11% 10 16% 1 8% 7% 4% 1% 1% 1% 3 16% 1 4% 1% 2% 1% 1% 1% 18% 14% 2% 7% 5% 7% 6% 6% 1 35% 16% 19% 29% 1 3% 5% 6% 2% 1% 4% 7% 9% 5% 4% 2% 1% 36% 4% 26% 16% 7% 5% 3% 1% 1% 1% 1% Manufacturing IT & ITeS Telecom Government BFSI Healthcare Education Manufacturing and asdf & ITeS segments are highly polarized; two leading players dominate both these segments Others Revenue distribution is more uniform in Telecom, Government, BFSI and Healthcare segments 43 Competitive Scenario

43 Customer base ( ) Majority of the players have revenue realization / customer of between pa; Reliance and are outliers here and have a very high revenue realization from each customer dependent on large sized deals Comparison among players by Revenue Realization / Customer 250, ,000 Relianc e IDC ESDS 0 Tikona Spectranet BSNL Cyquator GPX Cntrl S 10 40,000 28,125 25,000 20,000 18,750 16,667 16,000 10,000 10,000 Cntrl S 10 Tuli p BSN L GP X Netmagic Tulip Sif y Revenue Realization / Customer Netmagi c Airt el Average Revenue Realization / Customer < Airtel Sify Revenue () Cyquat or Tikon Spectran a et 182 ESD S Average Revenue Realization / Customer > Reliance IDC Competitive Scenario

44 Utilized Capacity () Out of 15 players, only 5 players have outperformed the industry in terms of per unit revenue realization; All of them are Category A Competition Comparison among players by Revenue realization per unit of Product of interest space 643 Tuli p Cntrl S Netmagic ESDS GPX Tikona Cyquator BSNL Spectranet ReliancSpectran e IDC et Airt el Sif y Tulip 204 Tikon a Revenue Realization per unit of Product of interest Sify 197 BSN L GP X Revenue Realization / unit Airtel Revenue () 171 ESD S 143 Netmagi c Cyquat or Reliance IDC Revenue Realization / unit 44 Cntrl S Competitive Scenario

45 Utilized Capacity () Average deal size in the industry ranges between have deal sizes larger than Comparison among players by Deal size 900 Cntrl S Relianc e IDC Cntrl S Netmagic BSNL Tulip Cyquator GPX Reliance IDC Sify Cyquat or Airtel BSN L Companies with low customer base and higher deal size 117 Netmagi c 105 GP X Spectranet Tikona ESDS Sif y Deal Size () 54 Airt el 44 Tuli p Average enterprise level deal size in the industry 2 Tikon a ESD S 1 Spectran et Customer base () 46 Competitive Scenario

46 Revenue per unit Top two players have high bargaining power Relatively new entrant is compromising on price to capture large deal sizes Comparison among players by Deal size and revenue per unit Product of interest space Tulip Spectranet Airtel 50 Tikona ESDS 0 GPX 50 Sify BSNL Premium service provider Netmagic Majority of the players fall in this group Deal size < and revenue / unit up to Cyquator Deal Size Both these players have high deal sizes and higher revenue realization from per unit Indicates higher bargaining power in the market Reliance IDC Compromising on price to capture market / get large deal sizes Cntrl S Competitive Scenario

47 Evaluation of Product of interest players across key parameters Cntrl S Revenues 180 Tikona Tulip Reliance IDC ESDS Netmagi c GPX Cyquat or Spectra net BSNL Market Reputation Support Levels Sify SLAs Airtel Relianc e IDC Tier classification Tikona 2.5 ESDS Airtel Sify Tulip Netmagic Spectranet Cntrl S GPX Cyquator BSNL Weighted Average Rating 48 Competitive Scenario

48 Employee expenses account for 30 5 of Product of interest costs Real estate costs account for 10 2 of overall Product of interest running costs Cost structures of few PQR service providers % 8% 4% 13% 16% 15% 32% Cost structures as a percentage of overall expenses as of FY % 15% 15% 4% 15% 5 7% 6% 3% 7% 18% 37% 1% 4% 1 6% 44% 41% CtrlS Tikona Tulip IT 2% Others Repair & Maintenance Communication Expenses Electricity Expenses Rent/ Land Cost Sales Promotion expenses Employee Expenses 49 Competitive Scenario

49 End User Education

50 Product of interest business in the education segment is driven primarily by record management and process management Government bodies like ICSE and CBSE require huge amount of resources when results have to be declared Drivers for Product of interest requirements in this segment Professional Colleges Central Universities State Universities Government Bodies Key Product of interest Requirements Educational and research applications Campus Area Network access University Management Systems Affiliations and record management University Management Systems Affiliations and record management Record management Key Product of interest Challenges Security and access Data security Process management Geographical expansion Data security Process management Seasonal increase in access to resources 51 Education

51 Education segment inclined towards using ABC Education industry in India is highly prone to data misuse Professional colleges, state and central universities and education bodies, are the primary target segments for Product of interest business Professional colleges, state and central universities build their own Product of interests due to the following key reasons: Data security Easy access to manpower For a professional college: An in-house Product of interest makes it easier to manage student and employee access to local shared resources Captive Product of interest players offer various promotional schemes like certified training centers and student placement offers On the other hand, state and central universities take-up initiatives like university management systems to improve their internal processes. These projects are executed on a turnkey basis where the university management system vendor also builds a Product of interest Educational bodies like CBSE and ICSE usually use the services of PQRs during the time of result declaration, due to considerable increase in access to their websites, which requires dynamic asdf resource allocation Website hosting is an application which is being outsourced to PQRs by educational institutions and bodies 52 Education

52 Educational segment uses PQRs for website hosting Demand for these websites is seasonal and requires dynamic resource allocation Key reasons for using PQR service 25% 25% 25% 15% 1 Parameter Weightage Geographical Reach Capacity Utilization Data Security Maintenance Connectivity Although professional colleges, state and central universities build their own Product of interests, educational bodies also use PQRs for the following reasons Since students from across India access their websites it is difficult for these bodies to provide adequate connectivity and maintain that infrastructure on their own As demand for their websites is seasonal and requires dynamic resource allocation, they outsource it to PQRs Since these websites are highly prone to external attacks, PQRs offer better security which can be maintained and upgraded on time 53 Education

53 Data security, lack of transparency and easy access to human resources are the prime reasons cited for not using PQRs Key reasons for not using PQRs Control Security IT Staff Technology A dedicated team of asdf staff, usually led by the asdf department head, is able to manage in house Product of interests Security of records is highly important, and even within an organization, not everyone is provided access; usually processes are in place wherein the access to these records is channeled through the head of Product of interest Due to low levels of automation requirement, this segment implements ABC without using premium Product of interest technology 1 Parameter weightage Since the access to computing resources is local within the campus these organizations prefer to have ABC for better control 54 Education

54 Data security, ea sy access and improved learning outcomes are the prime reasons cited for using PQRs Key reasons for using PQRs % 1 5% Parameter weightage Technology Maintenanc e Infrastruct ure Security Connectivit y Cost Extends the global reach of teaching and learning beyond the classroom or campus Provides lifetime learning with online Video Tutorials Increases safety and security Improves learning outcomes Brings in new students and revenues 55 Education

55 Parameters considered for selecting a PQR service provider NICSI and BSNL are considered as the top Product of interest Data security Dynamic resource allocation capabilities service providers in government educational Critical Civil Infrastructure asdf Staff institutions Important While private Cost institutions consider Hygiene Airtel and Netmagic to be the top providers 56 Education

56 Competition Profiles 57

57 Reliance IDC (1/2) Total Revenue Product of interest Revenues 58 Competition Profiles Category A Competition Company Total Product of interest Capacity Utilization Customers Head Office Location Product of interest Locations Branch office Locations Company Background Limited Company, Fully Owned Subsidiary of Reliance Communications as 'Reliance Communications Investment and Leasing LFormerly known imited' Reliance communications was founded in 2004 Reliance Data Center is a leading provider of outsourced data center infrastructure for organizations with mission-critical asdf operations Reliance data centers, on a daily basis, manage more than 25,000 servers, 350 firewalls and 1600 terabyte of data transfer In Apr 2010, Reliance Communications signs strategic alliance with GetJar to create India s largest and free applications store. In Aug 2010, RCOM & Universal Music sign exclusive strategic partnership in its preparation for 3G launch. In Aug 2010, RCOM & Nokia join hands for a first-ofits-kind multi-faceted business partnership.