MY Final Thesis

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INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

NEW DELHI
PROJECT TITLE:
“EFFECT OF GLOBALIZATION ON IT
INDUSTRY & ITES IN INDIA ”
EXTERNAL GUIDE:
MR. Sushant Kisore
SUBMITTED BY: SUBMITTED TO:

Rai Ankit Ray Prof. SUMANTO SHARMA
Batch: PGP FW 2006-08 ASSOCIATE DEAN PROJECT
Alumni Id:
ALUMINI-ID-DF57-M266
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CERTIFICATE OF THE GUIDE
This is to certify that the thesis titled “GLOBALISATION AND ITS EFFECT ON IT
& ITES SECTOR IN INDIA” is an original work done by Mr. Rai Ankit Ray under my
guidance.
The thesis report has been thoroughly revised and I also declare that this study has never
been carried out by any student or submitted to any institute.
I congratulate him for the successful completion of this research study (thesis).
I wish him every success in life
Regards
Sushant Kisore
Manager-Client Operation
EXL Service.com India Pvt Ltd
Noida
Mob-9810142223
Date:
Place: Noida
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Desired area of Research :-

IT & IT Enabled services
Title of the Thesis:-
Globalization and its effect on IT & ITES sector in India.
Problem Definition/Hypothesis/Research Objective:-

The objective of the research is to study about IT & ITES in India like BPO, Software
Technology Park, legal outsourcing, banking industry, education system etc. Apart from
this the research will focus on the current status of IT & IT Enabled services, areas in
which they have been used, there applications in different sectors, how far they are
successful and what are the future prospects of IT industry and its effect due to
Globalization. How they contribute for the growth and development of country & society.
Introduction to the area of Research :-

IT & ITES is booming sector in India, which comes under service sector and provides
great employment opportunities. Due to Globalization there are lots of changes occurring
in this sector, Foreign companies come to India to start their business, because in India
skilled and cheap labor force are available and large number of English speaking
population are there. They also bring latest technology in India. .
.Scope of thesis work:-

The thesis would focus on IT & ITES, its types, areas of application like medical
services, education, legal system, banking industry etc. What are the changes occur due
to Globalization, past, present and future trends in this sector. In addition, we have to
analyze that whether they will sustain in future or not, how they contribute for the growth
of society and country.
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Research Methodology:-
The methodology that will use is Primary research as well as Secondary Research.
Primary data- Primary data are data freshly gathered for a specific purpose or for this
research project. It includes open-ended questionnaire from company’s employee or
external guide.
Secondary data- Secondary data are data that were collected for another purpose and
already exist somewhere. It includes Information from various books related topic,
magazines and internet.
Justification for choosing the Research Proposal:-

The topic of thesis i.e. Globalization and its effect on IT & ITES sector in India has been
taken looking into the current scenario. In almost all the sectors, IT & ITES plays a vital
role for the development and growth of that sector nowadays. With the application of IT
in every sector work become easy and it saves our time and money. Therefore, it is
necessary to analyze its current state and sustainability in future and what changes are
required in this sector due to Globalization, so that they can contribute maximum for the
development of society and country.
Details of External Guide :-

Name : Mr. Sushant Kisore
Qualification : B.E., MBA
Designation : Divisional Director
Mott Mac Donald, Noida
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ACKNOWLEDGEMENT
I wish to express my grateful appreciation to Prof. Sumanta Sharma for providing
guidance throughout my research. His guidance helped me to come out with new facts
and finding about IT & ITES sector and effect of Globalization on it, without whose
effort this thesis would not have been possible.
I am also grateful to my external guides Mr. Sushant Kishore for showing patience in
numerous revision and for sharing his vast experience and knowledge on the subject.
I am thankful to all the respondents, without whom this study would not be possible.
I am beholden to my parents, family members, faculty and friends for their blessing and
encouragement that keeps me going.
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EXECUTIVE SUMMARY
The IT & ITES Sector is growing at a very fast rate and its effect is seen on industry in
India. In this report main emphasis is given on Globalization and its effect on IT & ITES
sector because due to Globalization this industry has gain a lot and contributed for society
and nation. In this thesis we would mainly concentrate on what exactly IT & ITES sector
is and Apart from this the research will focus on the current state of IT & ITESand future
trend, areas in which they have been used there application in different sector, how far
they are successful. Also what are the changes in Education system is required due to
globalization. What are steps and initiatives taken by government to promote IT & ITES
sector and provide better facility to IT companies and its employees. Employment
opportunities and foreign exchange earning etc. At last there are some negative effects
are there but not so much so this is also highlighted in this project also taken Satyam
Computers as a example and discuss about company background, merger and
acquisitions and effect of globalization on Sataym Computers.
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TABLE OF CONTENTS
TITLE PAGE NO.

1. RESEARCH METHODOLOGY 09
2. INTRODUCTION 12
3. MAJOR SEGMENTS OF IT & ITES 15
4. BPO – INDUSTRY 16
a. GOVT SUPPORT TO BPO SECTOR 17
b. CONTRIBUTION OF BPO TO THE ECNOMY 18
c. M&A IN BPO 19
5. INDIAN IT & ITES-BPO INDUSTRY NASSCOM ANALYSIS 20
6. CURRENT AND PROJECTED MARKET SHARE 22
7. GLOBALIZATION AND ITS EFFECT ON IT EDUCATION 27
8. ROLE OF IT ON INDIAN ECONOMY 32
9. IMPACT OF BUDGET ON IT & ITES 34
10. GOVERNMENT INITIATIVES 35
11. ADVANTAGE OF IT IN INDIA 41
12. TRENDS IN IT INDUSTRY 42
13. FDI POLICY AND FOREIGN TRADE POLICY 46
14. MERGER AND AQUISITION 48
11. CHALLENGES IN IT & ITES SECTOR 53
13. NEGATIVE EFFECT OF IT & ITES SECTOR 59
14. NEED FOR UNIONISATION 62
15. THREADS TO IT & ITES SECTOR 64
16. SATYAM COMPUTRES 66
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17. RECOMMENDATION 98
18. BIBLIOGRAPHY 100
19. ANNEXURE- QUESTIONNAIRE 101
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RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDY
• To study the IT & ITES sector and its application
• To study current and expected market share of IT & ITES sector
• To analyze the effect of Globalization on IT & ITES Sector
• To analyze the changes required in education system India
RESEARCH METHODOLOGY
Research is an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison
and experiment. In short, the research for knowledge through objective and systematic
method of finding solution to a problem is research; it also covers the systematic
approach concerning generalization and the formulation of a theory. Different stages
involved in research consists of enacting the problem, formulating a hypothesis,
collecting the facts of data, analyzing the facts at reaching certain conclusions either in
the form of solutions towards the concerned problem or in certain generalizations some
theoretical formulation
The main aim of the research is to explore that what is IT & ITES sector, its
application in different field, improvement in education system required due to
globalization, current and expected market share
RESEARCH DESIGN
Research design is a purposeful scheme of action proposed to be carried out in a
sequence during the process of research focusing on the management problem to be
tackled. It must be a scheme of problem solving through proper analysis, for which
systematic arrangement of managerial effort to investigate the problem is necessary. It
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destines the task of a researcher from identifying a managerial problem and problem area
to report writing with the help of collection, tabulation analysis and interpretation of data.
Though not exhaustic, Claire Selltiz’s definition of research design reveals some
important aspects of research design. “A research design is the arrangement of conditions
for collection and analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure”.
The present study Globalization and its on IT & ITES sector in India are exploratory in
nature.
DATA COLLECTION
The webs IT & ITES, newspaper and IT magazines, are used where the data is to be
collected will be short listed based upon the application, effect and future prospect of
IT & ITES.
Primary Data
Interviews of company employees, with the help of the structured questionnaire as it
are the most suitable method to collect information in this type of study. The
questionnaires are proposed to be designed based on the experience of the people in
this field.
In questionnaire I asked question to different employee through mail, consist of

Docholomony and Multiple Choice questions. This helps me to understand a lot about
view and mentality of employee about present trend and future expectations.
Secondary Data
Magazines of IT industry, webs IT & ITES, corporate magazines and newspaper. In
order to accumulate this knowledge I had to go through a lot of secondary data namely
The Hindu, Business line, webs IT & ITES etc.
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Secondary data provided a starting point for research and offered the advantage of low
cost and ready availability. Standardized questionnaires were prepared after studying the
secondary data carefully and doing a pilot survey.
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INTRODUCTION
IT ENABLED SERVICE IN INDIA
Any activity carried out based on the application of Information Technology could be
termed as IT Enabled Service (IT & ITES). In other words IT & ITES cover the entire
range of services which exploit information technology for empowering an organization
with improved efficiency or a type of service which may not be possible to be rendered
cost effectively without IT. The activity could be internal to the organization i.e. meant to
increase the operational efficiency through work force residing within the organization or
could be outsourced. The outsourced or cross-border IT & ITES is now receiving greater
attention as this category of IT & ITES has a great potential for growth and contribution
towards employment opportunities in India.
IT Services are broadly defined as systems integration, processing services, Information

Services (IS) outsourcing, packaged software support and installation, hardware support
and installation and IT training and education.
IT & ITES Spectrum in India

The spectrum of I.T. Enabled Services applications already evident in India includes the
following segments:
• Call Centers
• Medical Transcription
• Back Office Operations, Revenue Accounting and other ancillary operation
• Insurance Claims Processing
• Legal databases
• Content Development/Animation
• Payroll
• Logistics Management
1. CALL CENTRES
A typical call center is a service center that has adequate telecom facilities, trained
consultants, and access to wide databases, Internet and other on-line information
support infrastructure to provide information and support to a customer. It operates to
provide round the clock and year round service.
Call centers are normally operated by large airlines, by banks to provide services to the
customers/ callers, by investment banks, mutual funds, telecom services, companies
providing customized and high value services, IT products companies,etc. The primary
determinant is any industry that has frequent interaction with a broad client base and
intensive stakes in services being offered to the customer, where time and material
value is of paramount importance. These services are very popular in countries such as
the USA, Europe, Japan and Australia.
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2. MEDICAL TRANSCRITION
In countries like the USA, doctors’ time is at high premium. The current practice by
doctors is to simply record their findings through a dictaphone or some such device.
These sound tracks are then sent through datacom lines to overseas companies (where
costs are much lower) that employ "medical transcripionists" who hear these
recordings, transcribe them into reports and send them back electronically through
datacom lines. This has now become a specialised discipline with people needing
adequate training. Turnaround time is often as low as two hours and, therefore, is often
better than what the hospital may have achieved if it had done all of it in-house.
Initially, it was only being contracted out to companies that were in close proximity to
these hospitals. Increasingly, however, to take advantage of lower costs, this work is
being sent abroad to Mexico, West Indies etc. Because of the availability of high speed
satellite links, it is now entirely feasible to do this in India in technical terms.
3. BACK OFFICE OPERATIONS

Revenue Accounting, Other Ancillary Operations
Industries such as Banks, Airlines require large scale data entry and revenue accounting
work to be done. For revenue accounting and other BackOffice accounting operations,
paper documents/ raw data are sent to remote locations, which are used for data entry
and necessary reconciliations. Using high speed datacom links for their back office and
data processing operations, these banks, airlines and other organizations with extensive
data turnover and customer interface, are able to save costs and valuable resources. The
prime concern of these companies is 100 percent availability of data and uptime of
facility. This can be ensured through high speed datacom links from India to the parent
country. Over the last few years, there has been a steadily growing trend to outsource
these services to major I.T. service providers, with contracts running into decades. The
prime criteria for such projects are quality of organizational processes, availability of
abundant manpower and ability to dedicate resources to clients’ needs. India stands to
gain from such a trend as the Indian software industry has been able to make a mark
and also has access to huge pool of skilled as well as semiskilled professionals with
relative cost advantage.
4. INSURANCE CLAIM PROCESSING

Large insurance companies get myriad claims. Since there are well laid down rules on
how they are to be processed such processing can be done anywhere, as long as there is
availability of graduates who can read and write English in large numbers, a few
doctors and a few accountants. As a result, to save costs, large insurance companies in
the U.S. are now outsourcing a lot of this work.
5. LEGAL DATABASES
There is a constant need for lawyers who counsel cases to go through relevant laws,
rulings and precedents in order to build up their case. This is usually done by very
junior lawyers in legal firms. However, in the U.S. and other developed countries, even
junior lawyers’ services are highly priced. One of the ways to get around this hurdle is
to have a readily accessible source of well managed and intelligent information. One of
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the most promising and low cost ways of having ready access to information is
information technology. Therefore, many legal firms have started to outsource this
work to organizations that have large English speaking, lower priced workforce of
trained lawyers. The job comprises working closely with the firms to create a database
of their existing records, index on the basis of various useful and common understood
criterions, keeping track of new documents being created and incorporating them into a
database as per well established parameters. Lawyers can then simply use their
computers to draw up a history of like cases and draw a clear plan of action. Once
again, the rules are clear and only average qualifications and ability are required.
6. DIGITAL CONTENT DEVELOPMENT/ANIMATION

New Media content development is emerging as one of the fastest growing service
segments in the global I.T. services industry. It caters to needs of web site management,
production of content for new media such as Compact Disk, Digital Versatile Disk and
products of convergent technologies such as Internet enabled TV. It offers a large
emerging potential; as more and more offices, homes, institutions, students and
professionals realize an ever growing need to have easy access to information that can
also be suitably fused with other media. It consists of compilation and development of
digital content for intra-organization dissemination, cross-institution usage,
collaborative projects, public domain information, and programs for public/specialized
education, web content development and management, developing animated movies.
The acceptability of outsourcing such work to distant countries and the recognition of
the cost savings is rapidly growing.
 IT & ITESare human intensive services that are delivered over telecom networks
or the internet to the range of business segments which inter alias include-
• Legal Database Processing
• Digital content development / animation
• Remote Maintenance
• Back office operations – Accounts, financial services
• Data Processing
• Call Centers
• Engineering and Design
• Geographic Information Services
• Human Resources Services
• Insurance Claim Processing
• Payroll Processing
• Revenue Accounting
• Support Centers
• Website Services
• Business Process Outsourcing (BPO’s)
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 Major Segments of IT Enabled Services
Following is a fairly detailed generic classification of IT & ITESwhich

Already exist or which have potential for evolving into areas of entry:-
• Customer Interaction Services such as Call Centers
• Finance and Accounting Services such as back office data processing for Airlines,
etc.
• Engineering and Design Services such as outsourced design activities
• Human Resources Services such as outsourced payroll preparations, etc.
• Animation for movies and TV serials, cartoon strips, etc.
• Translation, Transcription and Localization such as Medical Transcription
Services.
• Network Consulting and Management covering outsourced network designing
and maintenance.
• Data Search, Integration and Analysis covering areas such as preparation of legal
data bases, research & preparation of reports based an data bases on past records,
etc.
• Marketing Services such as bureaus for marketing products or services based on
Call Centers or local market data bases, etc.
• Web Site Services for creating site contents, advertising, etc.
• Remote Education for utilizing IT infrastructure to strengthen formal education
system for remote and expertise starved areas.
• Medical Consultancy by providing expert advice based on data or making
available data bases.
IT & ITES DRIVES REAL ESTATE
Having saturated large cities like Delhi-NCR, Bangalore and Mumbai, the IT & ITES
action is slowly shifting to small towns and Tier II cities, like Chandigarh, Vizag and
Jaipur, which are driving future growth. A number of IT and IT & ITES companies are
expanding to newer locations as they grow to deliver high-end services in the value
chain driving growth in commercial real estate.
While the sector accounted for 75 per cent of the total office space absorption in Pune
in the fourth quarter of 2006, Bangalore continues to be the major IT/IT & ITES hub of
India with 70 per cent of total absorption of office space by such knowledge-based
companies. In fact, the city-wise snapshots released by real estate consultancy DTZ
Debenham Tie Leung recently put the 14.2 million office space absorption in Bangalore
as the highest in the country.
The report makes special mention of Hyderabad, which has emerged as a preferred
IT/IT & ITES destination in south India with Madhapur and Gachibowli micromarkets
becoming one of the most sought after IT/IT & ITES destinations in the city.
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BPO- BUSINESS PROCESS OUTSOURCING
Introduction
Business Process Outsourcing (BPO) is a buzzword among the corporate in the world
Today, corporate benefit significantly from outsourcing of business processes almost
everywhere on the planet. Looking to the growth and government's support to it, BPO is
being recognized as a specialized sector in India.
BPO in India
Over the last few years, outsourcing of business processes has been gaining popularity
driven by the fact that US firms have been enjoying much success from adopting this
business strategy. European organizations have increasingly been focusing on what they
identify as their core competencies and have been looking to reduce costs while
maintaining high levels of quality for non-core activities and processes.
In India, as far outsourcing of business processes is concerned, the outsourcing of legal
services comes on the first count. In other areas BPO is quite in vogue in India.
Nowadays, more and more companies are announcing BPO and call centre projects in
India. As per estimates, India is set to become the most popular destination for BPO
operations. A large number of multinational companies are outsourcing their business
processes offshore to Indian BPO companies. BPO has got impetus with the
technological breakthrough with Internet for communication across the globe which has
been the largest advantage for the success of the BPO business.
More importantly, India has a pool of talent and has the second-largest English-speaking
population with computer knowledge in the world after US. Also, costs are lower in India
compared to other countries for outsourcing. The technology in India is state-of-the-art
and the country is rightly located in terms of the geographical position, and the policies of
Govt. of India are also favorable for software and BPO sector.
Major Areas of BPO Sector-

The non-core business process areas are the core areas of BPO business. These non-core
business processes areas may include IT & ITES(IT & ITES), e-logistics, management of
facility & operations and legal services. Of these, outsourcing in IT & ITES e.g. software
& call centers is amazingly popular across the globe.
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GOVERNMENT SUPPORTS TO THE BPO SECTOR IN INDIA –
Government of India has introduced various policy concessions and initiatives to

accelerate the growth of the IT-enabled outsourcing market. Spearheaded by associations
such as National Association of Software and Service Companies (NASSCOM), the
Indian software and services industry has also taken various steps to ensure that India
becomes the global hub for IT-enabled outsourcing in the future. Some of the steps take
by the Government and industry for the IT & ITES/BPO sectors are as follows:
1. In May 2002, the Government of India has accepted the recommendations of

NASSCOM and removed certain procedural bottlenecks that were hampering the
Growth of the Indian call center industry.
2. The Government of India (Central Board of Direct Taxes - CBDT) has allowed total
Income tax exemption on the export of IT enabled outsourcing services under Sections
10A/10B of the Income Tax Act, 1961. These IT enabled products or services are:
• Back-office Operations
• Call Centers
• Content Development or Animation
• Data Processing
• Engineering & Design services
• Geographic Information System Services
• Human Resource Services
• Insurance Claim Processing
• Legal Database
• Payroll
• Remote Maintenance
• Revenue Accounting
• Support Centers; and
• Web-site services
3. Foreign Direct Investment (FDI) for 100 percent of the equity has been permitted in
BPO companies.
4. Permission of duty-free imports of capital goods (under the Export Promotion of
Capital Goods scheme) for BPO companies.
5. The Government has promoted several Software Technology Parks (STPs) which
Provide ready-to-plug IT and telecom infrastructure. STPs also allow single-window
Clearance for all regulatory compliance issues.
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CONTRIBUTION OF BPO TO THE NATIONAL ECONOMY
As per the NASSCOM-McKinsey Report, 2002, the revenue from BPO will reach $24
billion by 2008 and the IT-enabled services (IT & ITES) sector will contribute 37 per
cent to the total IT software and services export market. Thus, BPO is likely to contribute
up to 3 per cent to India's gross domestic product (GDP).
The BPO sector is expected to provide employment to 1.1 million people by 2008 as per
a report by the NASSCOM.
BPO and the Indian economy

The educated young Indian can deliver low-end services like basic customer support and
increasingly carry out high-end research work at a fraction of the cost in the West — with
little or no compromise in quality the squeeze is on high-tech workers in the U.S. and the
beneficiaries are the educated Indians working in Gurgaon, Bangalore, Hyderabad and
Chennai. NASSCOM estimates that companies in the West can save up to 60 per cent in
the costs of the services they outsource to India.
How far will out-sourcing go and what impact will it have on India's economy? There are
three sets of questions to be answered in this connection.. All have a case to make out in
favor of IT & ITES/BPO and that makes an informed assessment difficult.
NASSCOM cIT & ITES sees global IT & ITES business rising from $570 billion in 2002
to $1,200 billion in 2006. The recent E-Commerce and Development Report 2003 cIT &
ITES a Goldman Sachs figure of $570 billion in 2005 for global BPO contracts. Forester
says that because of unreliability of suppliers, the global BPO business will rise to only
$145 billion by 2008.
1200
1000
800
600 ITES BUSINESS IN US$
BILLION
400
200
0
2002 2006
NASSCOM estimates (again) are of 160,000 people working in all IT & ITES sectors. In
the U.S. and the U.K. there is as yet no discernible increase in unemployment among IT
& ITES and high-tech workers that can be attributed directly to outsourcing to India and
other developing countries.. The most extreme is the one made by Forrester, which
claimed that the U.S. would lose 3.3 million jobs in IT by 2015 of which 2.3 million
would go to India.
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The third question is about the impact IT & ITES/BPO can have on India First software,
then IT & ITES. There is no question that India has made a mark in these particular areas
of IT. They have facilitated the emergence of a new class of entrepreneurs who have put
the "old economy" industrialists in the shade. And they have contributed considerably to
India's export growth. The boom that has lasted a decade and promises to continue has
changed the face of urban India — pockets of urban India to be more precise. Today,
there are 500 million Indians in the work force while NASSCOM estimates are of
160,000 men and women in the IT & ITES sector.
Mergers & Acquisitions in the BPO Sector

M&A in the BPO sector in India are not confined to Indian companies alone .In India,
M&A in BPO sector are proceeding on two fronts. Even as some Indian BPO companies
are getting acquired, other Indian BPO companies are acquiring operations both in India
and abroad.
• HCL Technologies acquired over a year ago a 90 percent stake in the Apollo
Contact Center in Belfast of BT Group. The deal gave HCL a beachhead in the
European market, and helped it bag business from the London-based BT,
including a $160 million order for setting up a BPO operation for BT in India.
• TransWorks Information Services Pvt. Ltd., a Mumbai based BPO company, was
acquired recently by the Aditya Birla Group, a large Mumbai based business
conglomerate.
• Customer Asset, a Bangalore based BPO company, was acquired a year back by
ICICI OneSource. Customer Asset had about 750 employees and operated a 350
seat call center in Bangalore.
• Wipro, a Bangalore-based software and services company, acquired Spectramind
eServices, a CRM (customer relationship management) services company in
Delhi a few months back.
Conclusion
As per the estimates, India is poised to become a No. 1 BPO destination in the Asia-
Pacific overwhelming all the so called odds. Particularly, when it comes to IT & ITES-
BPO tier, with a current base of 96,000 call centre seats, India is supposed to grow by 85
per cent to reach a capacity of 1,77,000 seats over the next 12 months to become the
biggest BPO hub in the region. Newspaper and magazine articles and analysts' briefings
throughout the globe are reporting the projected strong growth of the BPO market in
India.
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INDIAN IT & ITES-BPO INDUSTRY : NASSCOM ANALYSIS
The Indian IT & ITES-BPO Scenario
The Indian IT & ITES-BPO segment continued to chart strong year-on-year growth at 37
per cent for FY 2005-06. Growth is being driven by a steady increase in scale and depth
of existing service lines.
Key Highlights of Indian IT & ITES-BPO sector performance
7
6
5
4
3 ITES-BPO EXPORT
IN US$ BILLION
2
1
0
FY 04 FY 05 FY 06
500
400
300
Employement(In,00
200 0)
100
0
FY 04 FY 05 FY 06
Employees IT & ITES-BPO (in ‘000)
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Key drivers of the Indian IT & ITES BPO Industry include:

• Improved efficiency and higher service levels due to streamline of processes
• Quality improvements due to a better educated workforce
• Cost savings between 40-50 per cent
• Increase in off shoring by existing customers
• Superior project management skills
• Availability of a highly skilled, educated and English speaking labor pool
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CURRENT AND PROJECTED MARKETS
As per the report published by NASSCOM, on the basis of a study made by McKinsey,
the world market for IT-enabled services is expected to be over $ 140 billion in the year
2008.
SERVICES Year 1998 Year 2008

Customer Interaction Services 6.5 33.0
Finance and Accounting Services 1.5 15.0
Animation 1.3 2.0
Translation, Transcription and Localization 0.3 1.2
Engineering and Design 0.4 5.0
HR Services 0.2 44.0
Data Search, Integration and Management - 18.0
Remote Education - 15.0
Network Consulting and Management - 5.0
Website Services - 3.0
Market Research - 1.0
Total 10.2 142.2
FIGURES IN USD BILLION
Market Share
According to Industry estimates, the IT & ITES market globally is expected to grow to
US $ 142 Billion by 2008. The segments within IT & ITES that will witness tremendous
growth include Back Office operations, Remote Education, Data Search, Animation,
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Market Research and Customer Interaction Services. As per Nasscom-McKinsey report

2002, the Indian IT & ITES industry can attain export revenues of US $ 21-24 Billion by
2008.
Growth of Indian IT-IT & ITES Revenue
Indian IT-IT & ITES Sector to Exceed USD 36 Billion in FY 2006
IT-IT & ITES sector estimated to grow by 28%, to account for 4.8% of GDP in FY06
Employment in software and services sector to touch 1,287,000
Software and service exports to grow by 32%, to reach USD 23.4 billion
NASSCOM, the premier trade body and 'voice' of the IT software and service industry in
India,
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Estimates for FY06 (in USD billion)
Sector Figures
IT Software and Services
23.4
Exports
Hardware 6.9
Domestic Market 6.1
Total IT-IT & ITES Sector 36.3
25
20
15
10
0 IT Hardware Domestic mkt

software&services
Exports
Figures in US$ Billion
 Key highlights of the NASSCOM Strategic Review 2006
• Steady growth: The Indian IT-IT & ITES expected to exceed USD 36 billion in
annual revenue in FY06, an increase of nearly 28 percent in this current fiscal
• Exports to account for nearly two-thirds of the total revenues IT-IT & ITES sector
to contribute to 4.8 percent of GDP in FY06
• Engineering and R&D, software products hold significant opportunity for India -
growing at 37% and 43% (CAGR FY 2003-06E), respectively
• Indian IT-IT & ITES sector on track to achieve the targeted USD 60 billion in
exports by FY 2010
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IT Industry-Sector-wise break-up
USD billion FY 2004 FY 2005 FY 2006E
IT Services 10.4 13.5 17.5
-Exports 7.3 10.0 13.2
-Domestic 3.1 3.5 4.3
IT & ITES-BPO 3.4 5.2 7.2
-Exports 3.1 4.6 6.3
-Domestic 0.3 0.6 0.9
Engineering Services and
2.9 3.9 4.8
R&D, Software Products
-Exports 2.5 3.1 3.9
-Domestic 0.4 0.8 0.9
Total Software and Services
16.7 22.6 29.5
Revenues
Of which, exports are 12.9 17.7 23.4
Hardware 5.0 5.9 6.9
Total IT Industry (including Hardware) 21.6 28.4 36.3
Employment trends:
• Total IT Software and services employment to reach 1,287,000 in FY06
• Industry has already initiated several initiatives to further enhance the availability
of and access to suitable talent for IT-IT & ITES in India
• A comprehensive skill assessment and certification programs for entry-level talent
and executives (low-middle level management) launched
• An image enhancement program to build greater awareness about the career
opportunities in this segment
• NASSCOM is working with the academia across the country to encourage and
facilitate greater industry interaction
Employment figures-Software and Services sector
EMPLOYEMENT FIGURES-SOFTWARE AND SERVICES SECTOR
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450000
400000
350000
300000
250000 2004
200000
2005
150000
2006
100000
50000
0
IT Services Engg
services&r&d
Emergence of newer locations:

• As global delivery matures, newer locations are emerging; however India remains
the undisputed leader
• India maintains its distinctive lead amongst offshore destinations
• Strong fundamentals will help sustain India's value proposition
• 28% of the suitable talent available across all offshore locations (outranks the next
destination by a factor of 2.5)
• Keen emphasis on security and quality
• Sustained cost competitiveness, gains from increased productivity, utilization and
scale expansion
Growth in Domestic market:

• Complementing the continued growth in IT-IT & ITES exports is a growing
domestic market
• Domestic market coming into its own, to grow by nearly 22% in FY 2006
• Strong demand over the past few years has placed India amongst the fastest
growing IT markets in the Asia Pacific region
• Growth in the domestic market is witnessing the early signs of service line depth
that characterizes maturing markets
• Global product companies are also looking to introduce localized versions of their
software products to drive usability and penetration
• Several large domestic contracts announced last year were won by MNCs
Coming of age of Indian multinationals:

• Traditionally India-centric, indigenous players beginning to build noticeable
presence in other locations - through cross border acquisitions and organic growth
in other low-cost locations
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• Global majors continuing to significantly ramp-up their offshore delivery

capabilities - predominantly in India
• Portfolio of services sourced globally continued to expand into higher-value,
more complex activities
GLOBALIZATION AND ITS EFFECT ON EDUCATION IN IT & ITES SECTOR
1. STRESS ON QUALITY OF EDUCATION

The quality of IT education must be upgraded according to the changes in industry and
the requirements of users. This up gradation may include using new technology. Weight
age should be given to practical work and the course design should incorporate more
practical work. Online teaching methodology should be promoted using tools like
teleconferencing, web etc. The system of gradation and ranking should be strengthened to
maintain the quality of IT education.
2. FOCUS ON R&D
In order for India to remain a centre of knowledge having the largest pool of IT
Professionals on the world scene; research and inventions in IT education should be
Accorded priority.
3. COLLABORATION BETWEEN CORPORATE SECTOR & ACADEMICS
INSTITUTE
i) Curricula Development
Interface between the IT industry and academia should be encouraged for the
development of IT professionals. Industry needs in terms of manpower, skill sets and
quality of professionals in various disciplines and at different levels. This will help
realize the synergy between the two and strengthen Indian professional education
ii) Faculty Development
IT faculty should be trained with the help of the IT industry. Technocrats and personnel
from IT Industry should interface with the faculty members of Universities, Deemed
Universities, IT Institutes and Colleges. This would help in bridging the gap in teaching
and will be an effective device in promoting regular interaction between academic
institutions and the industry.
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iii) IT Related Research

IT Industry should take greater part in the promotion of IT-related research. The industry
can be advised by the Government to provide scholarships and sponsor students to
undertake research.
4. Faculty Remuneration
There is a need to revisit the faculty remuneration which is not attractive. It should be
Comparable with Industry salary. This will help attract the best talent in the industry to
the teaching profession.
5. Sharing of talent between institutes

There should be a system where national resources created at different points either by
National institutes or by companies should be made available to the other engineering
Institutes in the region, for use by students of IT.
6. PhD Programme
There is a general shortage of students for doctoral programmes. Teachers should also be
encouraged to undertake research leading to Ph.D. This can be done by providing
incentives such as scholarships, sabbaticals and other financial support.
7. Frequent Course Revision

IT courses need to be taught differently from conventional courses due to their high
technical contents, fierce competition and fast changing nature. The course curriculum
should be revised regularly.
8. Manpower Forecast Mechanism-- Data Bank

Establishment of a Manpower Information System for the IT sector is crucial for
Forecasting sufficiently in advance, the required number of IT graduates, post graduates
& professionals so as to have a balanced growth of IT education. This requires a strong
data bank to be built right at the education institutions and shared with the industry to
understand the demand and forecast the future manpower requirement.
9. IT Council
An autonomous body may be constituted exclusively to oversee the various facets of IT
education in India. The Study team recommends establishing an ‘IT Council' on the lines
of the Medical Council of India.
10. IT Infrastructure
There is a need to improve IT infrastructure for better networking and connectivity
between academic institutes which are not fully equipped with IT teaching tools and
facilities.
11. Penetration of IT education at school level

IT education should aim to “catch them young” - right from the school age.
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12. Stress on English and foreign languages

Fluency in English and other foreign languages should be targeted at the school level
as it has become a necessity due to globalization and interdependence of countries.
13. Software technology parks

More software technology parks should be established in cities across the country.
14. India's Brand Image: Role of Indian Missions Abroad

Indian Missions abroad can help reinforce global perceptions about the high standards
of India's IT education through education counselors and information network on IT
Education in India by organizing IT education fairs, seminars and workshops in the
context of globalization of Indian economy.
15. Integration of IT in rural sector

Efforts should be made to cover the rural segment of population in the shortest possible
time. To bring the rural sector into the mainstream IT revolution, the entry level for IT
education should be made affordable for this sector.
IT Education
• Course material needs to be upgraded periodically to meet industry standards and
requirements.
• Training methodology should be at par with the developed nations
• Training to trainers to be provided by industry experts
• Early faculty induction to attract and build a strong faculty team.
• Adjunct Faculty - Bring back experienced professionals in the main stream.
• Sharing of Faculty - A consortium of colleges to be formed to pool senior level
faculty for imparting IT education in advanced areas.
• Research and Development
• Consortium of institutions and industry players
• Exchange of education programs with developed IT nations
Industry Standards & Practices
• World class software development
• Ensure zero defect delivery
• IT industry should provide feedback through ongoing interaction with academic
institutes to improve the quality of IT manpower.
• IT industry should have a regular training programme on co –operative basis as
prevalent in USA, UK, & Australia.
Governance
• Data Bank of IT skills and resources - A joint effort by education institutions and
industry
• Education Council - An IT education council is required to monitor the education
standards and quality.
Infrastructure
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• High speed internet connectivity

• Software Parks in less developed IT zones - To promote IT education in these
areas.
Integration with other sectors
• IT enabled processes should be promoted.
• Every sector and industry should be automated as far as possible and have the
capability to share information and data on a single platform.
IT EDUCATION IN TAMILNADU-
1. Availability of Skilled Talent:

The key resource needed for IT & ITES is skilled manpower. Tamil Nadu has
proved to be a huge source of quality talent. The policy of the State on higher
education in the last two decades has enabled the creation of this talent pool.
2. Large pool of English speaking professionals:

Tamil Nadu has the largest number of English medium schools among the Indian
States. There are large numbers of Engineering, Medical, Law, Commerce and
Arts and Science colleges. English being the business and social language,
majority of these educated people are fluent in English. The Government will
encourage Universities and Institutions in the State to create institutional
infrastructure for acquiring foreign language skills.
3. Good quality talent:
Premium educational institutions like the Indian Institute of Technology, Chennai,
Anna University, Madras University, National Institute of Technology Trichy,
Institute for Financial Management and Research (IFMR), Loyola Institute of
Business Administration (LIBA), Institute of Mathematical Sciences, Madras
School of Economics and others produce some of the best and diversified talents
in the country.
4. Industry Academia Interface:
The large base of educational institutions in the State is a significant asset. These
institutions will be encouraged to include IT & ITES specific curricula designed
to industry needs as part of their syllabi so as to promote on-campus recruitment
by IT & ITES Companies.
5. High Computer Literacy:
Tamil Nadu is the first State to introduce Computer education in schools and
colleges with Public-Private participation. The computer literacy programme is
being successfully implemented in Higher Secondary schools spread all over the
State. Being aware that the future manpower needed by the IT & ITES sector is
still in the schools, Government of Tamil Nadu intends to provide both language
and IT & ITES specific skill sets in the Schools. Imparting of IT & ITES skills at
the level of 9th and 10th standards will be taken as a goal from the next academic
year.
• IIT, National Institute of Technology
• 252 Engineering Colleges
• 210 Polytechnics
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• 600 + Industrial Training Institutes

• 79800 Engineering Graduates
• 56000 Diploma Holders
Role of NASSCOM for improving the talent pool in India due to globalization
The Indian IT & ITES BPO industry is constantly decrying the lack of right talent pool
and quality manpower despite churning out graduates and engineers by dozens every
year. To be precise, the vast network of academic institutions churns out 3.1 million
graduates annually. The main problem lies in the disparity in learning of the fresh
graduates at their colleges and engineering institutions and the actual skill sets required to
work in the IT & ITES BPO industry.
To address this challenge, NASSCOM and the Indian IT-BPO sector have taken the lead
in ensuring that requisite remedial actions are undertaken well in time to avoid any form
of talent crisis. The association has announced the NASSCOM Educational and
Workforce Enhancement Initiative. "Slowly it is becoming imperative to enhance the
Indian talent pool to maximize the industry's potential and enable the sector to further
catalyze the growth rate of the industry. The educational institutions need to train the
young graduates on some of the key skills needed to join the IT & ITES BPO industry.
Need for the extra push

According to some leading industry experts, the onus of training the manpower to be fit
for joining the team currently lies on the shoulders of the companies. "We need to train
the fresher for at least two months before they can be taken in to a project,” This in turn
increases the cost of employment and total turn around time for the companies and the
industry as a whole.
To create the right balance between industry academia need and supply, the association
has started the IT Workforce Development (ITWD) program. According to NASSCOM,
this initiative was created keeping the issues and concerns of the industry at one end and
challenges of the academia at the other end. As part of this initiative, NASSCOM has
been nurturing the industry-academia interface through workshops and conferences,
faculty sabbaticals, training programmes and mentorship initiatives to ensure better
synchronisation between IT education and the industry requirements.
Along with this NASSCOM has also initiated a mentorship programme where IT/IT &
ITES and BPO companies are providing consistent guidance for over 12-24 months to a
particular college or institute. They are also closely working with academic bodies such
MHRD, AICTE and UGC to standardize the curriculum and pedagogy.
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The finishing touch

One of the key moves by NASSCOM is the initiative to work with the Ministry of
Human Resource Development (MHRD) to set up new Indian Institutes of Information
Technology (IIITs) and Finishing schools. The aim of these institutions will be to
enhance and produce competent professionals and engineers, incubate new companies
and clusters and nurture existing clusters of knowledge-based companies.
The MHRD with support from NASSCOM and the IT industry has recommended the
launch of five new IIITs based on the Public-Private Partnership model by 2008. On the
whole the ministry aims to set up around 20 IIITs over the next few years.
Another pioneering initiative by NASSCOM in partnership with the MHRD is the

"Finishing Schools for Engineering Students" programme, which is expected to enable
young technical graduates to become industry-ready.
The pilot of the "Finishing School" for engineering graduates, still seeking employment,
was launched in May this year. The pilot was conducted during the summer months of
May-June, 2007, for a period of eight weeks in eight institutions, including IIT Roorkee
and seven NITs namely Calicut, Durgapur, Kurushetra, Jaipur, Surathkal, Trichy and
Warangal. The "Finishing School" is covering the curriculum provided on technical and
soft skill development.
"The students get an opportunity to reinforce some basic engineering skills and in
addition, acquire industry-specific knowledge and skills, soft skills, management and
employment skills, which are being delivered by trained faculty and practicing IT and IT
& ITES industry consultants
NAC empowers entry level at BPOs
In order to develop entry-level human-power, especially for the BPO industry and equip
them with relevant hard and soft skills that ensure employability, NASSCOM launched a
key endeavor, the NAC or NASSCOM's Assessment of Competence. It was launched as
an industry standard assessment and certification programme to ensure the transformation
of a "trainable" workforce into an 'employable workforce', thereby creating a robust and
continuous pipeline of talent for the BPO sector.
Now NAC is being taken to the next level, by proliferating it across Tier II and Tier III
cities and towns that can be strengthened into BPO hubs and used as playgrounds for
nurturing job-ready professionals. By the end of the year, NAC will be rolled out in
various states of India, including Tamil Nadu, Gujarat, Chandigarh, Andhra Pradesh,
North-Eastern States and West Bengal amongst others.
NASSCOM has entered into a MoU with the Ministry of Development of North Eastern
Region (DONER) for the rollout of NAC in the state. With this NASSCOM aims to
conduct NAC test amongst 20,000 students across eight states in the region including
Assam, Tripura, Manipur, Nagaland, Meghalaya, Mizoram, Arunachal Pradesh and
Sikkim between September 2007 to January 2008.
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NASSCOM has reportedly entered into a similar understanding with Gujarat Informatics
Ltd; the nodal agency of the state government, for promotion of information technology
in the state, for the NAC Test. NAC's foray into Gujarat is being done on a pilot basis and
hence has a limit of 2,000 seats.
The Role of IT in the Indian Economy

The linkages among different sections of an economy are of crucial significance in
understanding the trajectory of any industry. The significance and potential of any
industry can be observed by looking at three important indicators
• The output multiplier,
• The employment multiplier and
• The degree of forward linkage.
As elaborated earlier, the output multiplier can be defined as a total increase in output
generation for one unit increase of final demand in a particular sector. The employment
multiplier is specified as man-years of additional employment created for an increased
unitary output of the sector. Both these measures spell out the backward linkages with the
other sectors of the economy in terms of output and employment effect. Forward linkages
refers to the inter relationship between a particular sector and all other sectors which
demand the output of the former as inputs.
Output and Employment Multipliers
It is important to look at the economic implications of the above observations. For
instance, the CSO has estimated that the value of output at current prices for the software
sector during 1999-2000 is at Rs 21,263 crores and at Rs. 50,302 crores in 2002-03. With
in this short gap of 3 years, the output of the software sector has increased by 29,039
crores and in this period the economy has been able to create 6.8 lakh man-years of
employment or in simpler terms this sector has been able to create jobs for 24,500 people
who would be able to work in this sector for the next 25 years. Its contribution to GDP in
1999-2000 was Rs 14,619 crores and Rs. 34,584 crores in 2002-03 current prices. The
contribution of the software sector alone out of the ICT sector, in GDP has increased
from 0.83 per cent in 1999-2000 to 1.54 per cent in 2002-03 Direct employment in the
software sector in 1999- 2000 was 322983 according to CSO (corresponding figures for
the year 2002-03 are not available). The contribution of the hardware sector to GDP in
1999- 2000 was Rs 796 crores and employed around 16,800 persons. The output of the
hardware sector in 1999- 2000 was Rs. 4400 crores.. Though the ICT industry in India is
mainly export oriented, domestic consumption does show a forward linkage that is not
high as on date but is expected to increase in the coming years as the economy and the
using domestic sectors mature making greater use of ICT in business, governance and
society.
CONTRIBUTION TO GDP (IN CRORE)
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40000
30000
20000
10000
0
1999-2000 2002-03
Impact of the budget on IT
NASSCOM should be happy, and they are. Even though not much in the budget has been
targeted at the IT sector, some of the major areas of the economy that the IT industry
depends on —
• Infrastructure,
• Technical and general education,
• Scientific and technological research,
• Telecom,
Government spending — has been given added attention.
While the Indian IT industry scores highly on skill and cost-effectiveness, poor
infrastructure — especially power and telecom — pulls it down. This is why NASSCOM
has been pressing hard for more to be done to modernize India's infrastructure.
The focus on rural development also holds some promise for the IT sector if some of the
extra money being poured into agriculture and rural development is spent on using
technological solutions to rural problems. According to a NASSCOM report, the
government accounted for 9 per cent of total IT spending in India in 2002. This is
estimated to go up to 15 per cent over the next five years.
Kiran Karnik, president, NASSCOM realizes this, "At the broader level, we will be
happy to join hands with the government in leveraging technology as a tool for
transformation. Information technology can play an important role in promoting agri-
businesses as well as making food stamps a reality by ensuring efficiency and
transparency. We suggest a similar entitlement based system for education too."
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In a pre-budget assessment, Karnik had suggested setting up a special IT fund for

boosting the rural economy: "We see great scope for accelerating (rural) growth by using
IT for a range of applications including supply chain management, optimization of
irrigation water releases, expert advise on farm practices, information on power
availability, weather and market prices, details about loans and government schemes, and
so on."
One initiative that could have a big impact on small and medium-sized (SME) IT
companies is Indonext — an alternative national trading platform proposed to help SMEs
raise equity and debt from the capital market. SME companies currently find it very
difficult to raise capital from the market because of the high net worth criterion and have
to rely on venture capital and financial institutions.
Another announcement that could have a positive impact on the industry is a soon-to-be-
introduced bill on special regulation for the special economic zones (SEZs).
The industry was also happy with the general push towards greater foreign direct
investment.
GOVERNMENT INITIATIVES
Information Technology Enabled Services (IT & ITES) Policy of TamilNadu 2005
1. Preamble
Globalization and the drive to competitiveness are making all organizations to focus on
their ‘core business competencies’ and outsource the ‘non-core business processes’. This
provides an opportunity to global companies to relocate such processes in India. India has
inherent strengths to support this.
This sector holds immense scope for the common person as it provides employment to
technical and non-technical graduates. Besides, this sector has the potential to generate
enormous foreign exchange inflow into the country. Through this Policy, the Government
of Tamil Nadu proposes to generate large-scale employment and attract increased
Foreign Direct Investment.
Tamil Nadu with its excellent physical, civic and social infrastructure and a large pool of
talented, educated, hardworking, English – speaking workforce is well positioned to
capture a substantial share of the IT & ITES market thereby generating massive
employment opportunities in IT & ITES sector in Tamil Nadu.
2. Vision
To make Tamil Nadu the Global IT & ITES Capital
To attract increased foreign direct investments
To create large-scale employment opportunities
To add value and wealth by leveraging the inherent strength of the State
3. Background
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Tamil Nadu has: -

• A proactive and investor friendly Government.
• Back offices of several global multinational corporations.
• Abundant skilled and educated human resources, world-class educational
institutions, good infrastructure of connectivity.
• A tradition of commitment and ‘Devotion to duty’ among the work force resulting
in lowest attrition rates in IT & ITES sector in the country.
• An excellent Social and Civic infrastructure providing a very high standard of
life.
• Higher level of compliance to rules in work place and in the civil society.
• Availability of large International and Domestic Bandwidth for communication.
• Amongst the highest level of urban dispersal in India.
• Become the epicenter for the Banking, Finance Services, and Insurance segment,
Health Care, Electronic Publication Services etc.
4. Objectives
• To get the maximum global IT & ITES investments to Tamil Nadu
• To develop Human Resources specific to IT & ITES Sector
• To create world class infrastructure for IT & IT & ITES and an enabling frame
work for protection of intellectual property and data
• To generate employment and other IT & ITES opportunities in major cities in
Tamil Nadu
• To provide a conducive environment for the sector by reducing regulations and
increasing opportunities.
5. Infrastructure for IT & ITES Sector

Infrastructure is the backbone for IT & ITES companies impacting cost, quality and
productivity. Government recognizes that high quality infrastructure is of paramount
importance to make Tamil Nadu the Global IT & ITES Capital and has taken several
steps in this direction.
• Government of Tamil Nadu shall have a single window agency for IT and IT &
ITES in ELCOT. This agency will ensure that all State level statutory clearances
are issued without delay. Government will create Single window clearance
agencies in Tier II cities / Tier III towns also.
• Communication Backbone:
The world’s biggest and India’s first private submarine Optical Fiber Cable
project i2i network with a bandwidth of 8.4 Tbps has made Chennai the
"Connectivity Gateway of India". The Government of Tamil Nadu will ensure
through Communication Providers, the availability of complete bandwidth
requirements for IT & ITES companies at their doorstep.
• IT & ITES Parks:
Government of Tamil Nadu will lead as well as encourage the creation of IT &
ITES Parks in Chennai and other Tier II / Tier III Cities. A rating of the builders
through an independent rating agency will be done and the land will be given to
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the eligible builders for the development of IT & ITES Parks as per the rating in
the Government promoted IT & ITES Parks.
• Power:
1. Tamil Nadu is one of the few States in India offering uninterrupted quality
power supply to the IT & ITES firms at competitive tariffs.
2. Tamil Nadu Electricity Board (TNEB) provides uninterrupted quality
power at adequate voltage and frequency within the prescribed technical
limits.
3. TNEB provides round the clock maintenance services and is committed to
provide new service connections within a time frame of one week to four
weeks depending upon the level of supply infrastructure required.
4. IT & ITES firms / IT & ITES Parks do not require any license to set up
captive power generation plants. These units will have open access to
Tamil Nadu Electricity Board transmission and distribution network for
wheeling purposes. Electricity supplied to IT and IT & ITES units is
charged at industrial tariff.
5. Tamil Nadu is free of power cuts and load shedding. IT and IT & ITES
units will be exempted from statutory power cuts, if any, in future.
6. IT and IT & ITES units are eligible for industrial tariff irrespective of
whether the premises using these units are owned by them or leased.
• Transportation
1. The Government will develop sustainable means of public transport to serve the
needs of IT & ITES units.
2. The Government, wherever needed, will create Public Bus Terminuses near the IT
& ITES Parks.
3. The Government will deploy adequate security near the IT & ITES Parks.
 Air Connectivity
Tamil Nadu has three international airports providing good connectivity to prime
locations both overseas and India. These locations include Bangkok, Malaysia,
Singapore, London and Frankfurt. Chennai is also well connected to important
domestic locations such as Mumbai, Delhi, Bangalore, Hyderabad and Kochi.
Government will strive to connect its two major tier II cities viz Coimbatore and
Trichy to more national / international destinations through direct flights to these
airports.
 Road Transport
• Chennai as well as other Tier II cities have excellent bus services infrastructure,
which is rated as the best in the country. Government of Tamil Nadu shall build
bus stops near IT & ITES Parks. Regular bus services shall be run connecting IT
& ITES parks.
• The developers of IT & ITES Park will be encouraged to get into public private
• 9.5.3 MRTS
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• Chennai offers a fast track Mass Rapid System for Transport (MRTS) from the
city centre to major commercial and IT & ITES hubs along a corridor for 16 Kms.
This is well integrated with the bus and rail transport system in the city. It is
proposed to extend the scope and coverage of MRTS in the near future and
technical studies have already been initiated. A state of the art highways is being
developed to connect all IT / IT & ITES ventures located in the southern corridor
of the city.
Tamil Nadu, a perfect blend of tradition and modernity, has an excellent social
infrastructure, which offers unmatched ‘Quality of Life’ for IT & ITES professionals
both citizens and expatriates .They are:
• A law abiding citizenry
• Perfectly maintained law and order and social harmony in the State
• Vibrant and varied cultural life
• Shopping Malls of international standards
• Excellent schools including international schools like American School, Chennai,
Kodai International School etc
• Top Quality Hotels to suit all budgets
• International and National food chains
• Range of tourist destinations
• Beautiful 18 hole Golf Courses
• Health Clubs and Sports like Rowing, Swimming, Bowling, Pool etc.,
• Global Standard Corporate Health care systems
• The only city which has an Entertainment Corridor of 25 km running parallel to
IT Corridor
Being aware of the 24/7 operations of IT & ITES sector and in order to maintain business
process continuity Government of Tamil Nadu has allowed 24x7x365 operation as well
as employment of women during night shift in IT & IT & ITES industries.
Vehicles of IT and IT & ITES units transporting women employees during night hours
will be issued special passes/permission.
6. Supportive Environment
1. Concessions extended to the IT & ITES Industry:

• IT & ITES industries will also be extended the following Fiscal and
Administrative incentives:
• Rs 50 crores and above and below Rs 100 crores would be eligible for a
capital subsidy of Rs 25 lakhs.
• Rs 100 crores and above and below Rs 200 crores would be eligible for a
subsidy of Rs 50 lakhs.
• Rs 200 crores and above would be eligible for a subsidy of Rs.100 lakhs.
• This subsidy will be payable after commencement of commercial
operations.
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• One time reimbursement for patent registration after 1.1.2004 up to 50%

of expenses or Rs 1.00 lakh (whichever is lower) will be given to any
production unit in Tamil Nadu.
• New industrial units (small, medium or major) where more than 40% of
the total workers employed are women shall be eligible for an additional
Capital subsidy of 5% of investment in fixed assets subject to a ceiling of
Rs.10 lakhs.
• Relaxation of FSI (Floor Space Index) to the extent of 100% will be given
in designated IT Parks. Such requests need to be addressed to the
concerned Regional Development Authorities.
• 50 % exemption of the Stamp Duty and Registration fee will be given at
the time of purchase of a land/ building for IT industries.
• Apart from development of software and hardware Industry through
ITPs /STPs the Government will also encourage software development
outside the Parks by giving such stand-alone units the same incentives as
the Units in the ITPs / STPs.
• IT & ITES industries will be assisted in obtaining necessary cable and
satellite links for connectivity. ELCOT will be the nodal agency for the
above.
• Special concessions will be given to the IT & ITES companies giving
employment opportunities to the physically challenged persons.
Government of Tamil Nadu will collaborate with leading institutions for
the development and promotion of specific software for the use of
physically challenged persons.
 IT Policy 2002 allows IT Companies to self certify that they are

maintaining the registers and forms as contemplated under the following 9 Acts.
• Payment of Wages Act.
• Minimum Wages Act.
• Workmen Compensation Act.
• Contract Labor Act.
• Employees State Insurance Act.
• Employment Exchanges Compulsory Notification of Vacancies Act.
• Payment of Gratuity Act.
• Equal Remuneration Act.
This self-certification will be regarded as sufficient compliance with the requirements of

the different Acts and the rules made there under regarding the maintenance of registers
and filing of the returns. Along with the above 9 Acts, the following 3 Acts are also
included in the list for IT & ITES Policy.
• Labor welfare Act 1972
• Maternity benefits Act 1961
• Industrial Employment (Standing Orders) Act 1946
2. Incentive for Quality Certification & Award for Excellence
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In order to promote the highest quality standards of operation in the IT & ITES Sector,
Government of Tamil Nadu will encourage IT & ITES Industries to obtain International
Process Quality Certification like COPC, ISO etc. by providing a cash reimbursement
incentive of Rs. 5 lakhs or the actual amount spent whichever is less to the IT & ITES
companies.
3. Information Technology Day

One of the Greatest Mathematicians of the present age Ramanujam was born in Tamil
Nadu. His birthday (22 December1887) will be celebrated every year as the Information
Technology Day of the State. Presentation of State-level awards will be given for
outstanding performance to ITS & IT & ITES units on Information Technology Day
every year.
4. New Enactments
As an industry catering to international customers, the Government will enact / assist in
enacting the following legislations for effective operation, early and stricter
enforceability of violations:
• Data Security And Customer Privacy Act:
To reassure the IT & ITES companies and their customers the safety of their data
and to indicate the Government of Tamil Nadu's commitment to and respect for
consumer privacy and for combating crimes and violations and to incorporate
penal provisions for violation of IPR issues the Government of Tamil Nadu will
formulate the Data Security and Customer Privacy Act.
• Assistance In Clearances Under Central Acts:

The Government of Tamil Nadu will assist the IT/IT & ITES Industry in
obtaining clearances/exemptions under various Central Acts in consultation with
the Union Government for better and smooth functioning of the industry.
C-TOSS: Chandigarh - Training On Soft Skills
The objective of the Policy is to make Chandigarh a major center for IT Enabled
Services, by attracting a substantially large share of the IT & ITES industry in India and
to enrich the skill sets of the Youth of the Union Territory to provide them with high
level employment and to enable high quality delivery of IT Enabled Services
The IT & ITES Policy of Chandigarh has envisioned acceleration of economic growth of
Chandigarh by leveraging the potential of IT and IT & ITES in the city, and creating a
competitive knowledge base for sustaining the growth of the industry. The objective of
the Policy is to make Chandigarh a major center for IT Enabled Services, by attracting a
substantially large share of the IT & ITES industry in India and to enrich the skill sets of
IIPM 41
the Youth of the Union Territory to provide them with high level employment and to
enable high quality delivery of IT Enabled Services.
To further strengthen the objective of making Chandigarh a Technology hub, the Society
for Promotion of Information Technology in Chandigarh (SPIC) under the aegis of
Department of Information Technology, Chandigarh Administration has taken the
initiative to start C-TOSS: Chandigarh Training on Soft Skills programme to develop
skilled professionals for the IT & ITES/BPO sector. The training programs are meant to
upgrade the skill-sets in Chandigarh with emphasis on the skills required for IT & ITES
professionals. The training modules to be imparted would cover Communications Skills
and other IT & ITES industry specific skills. There would be training programs with
different durations and selection for a particular training course will depend on the
current skill level of the student. The training would be carried out by the training
agencies at the respective college premises. The courses would be conducted on optional
basis for students of the respective Schools and Colleges
ADVANTAGE OF IT IN INDIA
• Evolution of global delivery model.

• Unbundling of large IT outsourcing deals with larger India-based delivery shares.
• Large contract values due for renewal over the next two years.
• Large client wins.
• Cross-border mergers and acquisitions.
• Movement of the industry towards a stable pricing model.
• Gradual positive shift in the outsourcing debate.
• Having aligned their internal processes and practices to international standards
such as ISO, CMM, Six Sigma, etc., companies in India are seeking to further
increase the quality and productivity benchmarks by introducing adaptations more
suitable for remote service delivery.
Global forays
Indian IT & ITES companies are looking at rapid growth through mergers and
acquisitions, either of domestic players or niche-service companies abroad. The big
players are on the prowl and already a string of acquisitions have been finalized.
According to Grant & Thornton India (GT), an advisory firm, there have been 57 M&A
deals in the first eight months of 2006 in the IT & IT & ITES sector valued at over US$
1.73 billion. Some of the acquisitions that have hit the headlines are:
• Hex aware Technologies, a provider of IT and BPO services, is planning to
acquire an IT company in the US or Europe for US$ 20-40 million.
• Hyderabad-based technology solutions provider, Prithvi Information Solutions
Limited (PISL), is planning to close four acquisition deals in the US by December
this year, for an aggregate consideration of US$ 40-50 million.
IIPM 42
• Para dyne InfoTech has acquired a US-based software services company with a
turnover of around US$ 10 million.
• Bangalore-based Subex Systems acquired UK-based Azure Solutions for US$ 140
million.
• NIIT bought out the US-based US$ 80-million company, Element K, for US$ 40
million.
• Sasken Communication Technologies acquired Finland-based Botnia High-tech
for US$ 45 million.
• Transworks acquired Canada-based Minacs Worldwide for US$ 125 million.
• Servion Global Solutions, a player in communications software, has acquired
California-based 5by5 Networks, a technology company
India's sunshine sector -- IT-IT & ITES -- continues to chart double-digit growth and is
expected to grow to US$ 53 billion by the end of calendar year 2008, It will witness a
compounded annual growth rate (CAGR) of 23.1 per cent till 2008, with exports growing
by 25.3 per cent and the domestic market by 18.5 per cent. With growth in the sector
being stupendous, the average increase in salary levels in the IT & ITES sector is
between 16 per cent and 18 per cent.
TRENDS IN IT INDUSTRY
Exports:
According to Nasscom, the IT & ITES sector is likely witness a growth rate of 32.6 per
cent growth in total software and BPO export revenues in FY07, marginally lower than
the growth of 33.3 per cent in FY06. Exports could touch US$ 31.3 billion in FY07
compared to US$ 23.6 billion in FY06. Nasscom predicts that the sector's revenues could
touch US$ 39.7 billion in FY07, and if IT hardware sales are also included, the total
revenues can touch US$ 47.8 billion in FY07. The IT industry's contribution to the GDP
is expected to rise from 4.8 per cent in FY06 to 5.4 per cent in FY07. Growing at the rate
it is now, the total IT industry can touch US$ 100 billion by FY10, says Nasscom.
For exports, the US and UK were the largest markets. In fact the share of Europe has
been increasing steadily. For FY06, revenues from the Americas totaled 67 per cent,
Europe 25 per cent and rest of the world, 7.7 per cent.
The growth in large deals and unbundling of multi-million dollar contracts has resulted in
Indian players growing their share of the pie in the contracts of over US$ 50 million to 7
per cent in 2006, as compared to 1 per cent in 2002. Multinationals announced
investments worth over US$ 10 billion in FY07, but the amount will be invested over a
period of a few years.
EXPORT IN IT & ITES SECTOR
IIPM 43
35
30
25
20
15 In US$ Billion
10
0
FY 07 FY 06
%GDP CONTRIBUTION
5.4
5.2
4.8
4.6
4.4
FY 06(in %) FY 07(in%)
Domestic market:
The domestic IT industry has moved away from hardware-led growth and is deriving
greater momentum from the software and services sector. It is projected at US$ 15.9
billion in FY07, representing a 21 per cent growth over the previous year. However,
hardware is still a large portion of the domestic pie at US$ 7.6 billion compared to US$
5.6 billion from services, US$ 1.6 billion from software and US$ 1.2 billion from BPO.
At these levels, the domestic BPO industry has logged a sharp 30 per cent growth, IT
services 25 per cent and hardware a 12 per cent growth over FY06.
IIPM 44
DOMESTIC MARKET CONTRIBUTION IN IT & ITES SECTOR
8
7
6
5
4
3
2
1
0
Hardware BPO Services Software
IN US$ BILLION
Employment:
The number of people employed by the software and BPO industry has also grown
rapidly, from 2, 84,000 in 2000 to 1.6 million for FY06. This is a 26 per cent growth in
manpower in FY07 compared to a 22 per cent growth in FY06. As before, the industry's
growth was led by export services, which is forecast to be US$ 18.1 billion in FY07.
However, engineering services, R&D and software product development services have
made a substantial contribution to export revenues. Revenues from this segment are
expected to account for US$ 4.9 billion, compared to US$ 4.0 billion recorded in FY06.
IIPM 45
3
REVENUE IN USD
2 BILLION
0
FY 06 FY 07
Production Profile
According to (NASSCOM), the Indian IT software and services sector grew by 31.4
percent during 2005-06, notching up aggregate revenue of US$ 29.6 billion, up from US$
22.5 billion in 2004-05. Encouraged by the 2005-06 performance, the IT and IT & ITES
sector is confident of achieving the US$ 60 billion milestone in exports by 2010.
The Business Process Outsourcing (IT & ITES-BPO) sector has emerged as a key driver
of growth for the Indian software and services industry in 2005-06. The IT & ITES-BPO
industry recorded a growth of 37 percent and clocked revenues of US$6.2 billion.
Key Growth Drivers

According to NASSCOM, the high performance of the IT-IT & ITES sector was in large
part due to factors such as
• The emergence of a more efficient global delivery model,
• The unbundling of large IT outsourcing deals with larger India-based delivery
shares,
• The bagging of large contract by the country's players.
• Customer relationships,
• Cross border mergers and acquisitions,
• The move of the industry towards a stable pricing model
India's edge in the off shoring domain was based on factors such as
• Availability of people's skills,
• A conducive business environment,
• Focus on information security and
• Operational excellence by leading IT-IT & ITES vendors
• Relevant financial structures.
Policy Framework
IIPM 46
• Industrial Approval Policy

• Industrial Licensing has been virtually abolished in the Electronics.
Information Technology sector except for manufacturing electronic aerospace
and defence equipment.
There is no reservation for public sector enterprises in the Electronics and Information
Technology industry and private sector investment is welcome in every area.
Electronics and Information Technology industry can be set up anywhere in the country,
subject to clearance from the authorities responsible for control of environmental
pollution and local zoning and land use regulations.
FDI AND FOREIGN TRADE POLICY
Foreign Trade Policy

• India welcomes investors in Electronics and IT sector. Government of India is
striving to bring greater transparency in policies and procedures to provide an
investor friendly platform.
• In general,
IIPM 47
• All Electronics and IT products are freely importable, with the exception of
some defence related items.
• All Electronics and IT products, in general, are freely exportable, with the
exception of a small negative list which includes items such as high power
microwave tubes, high end super computer and data processing security
equipment.
• Second hand capital goods are freely importable.
• Export Promotion Capital Goods scheme (EPCG) allows import of capital
goods on payment of 5% customs duty.
• The export obligation under EPCG Scheme can also be fulfilled by the supply
of Information Technology Agreement (ITA-1) items to the DTA provided the
realization is in free foreign exchange.
• Special Economic Zones (SEZs) are being set up to enable hassle free
manufacturing and trading for export purposes. Sales from Domestic Tariff
Area (DTA) to SEZs are being treated as physical export. This entitles
domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service
Tax exemption.
• Supplies of Information Technology Agreement (ITA-1) items and notified
zero duty telecom/electronic items in the Domestic Tariff Area (DTA) by
EOU/EHTP/STP/SEZ units are counted for the purpose of fulfillment of
positive Net Foreign Exchange Earnings (NFE).
• The import of second hand computers including personal computers and
laptops are restricted for imports. However, second hand computers, laptops
and computer peripherals including printer, plotter, scanner, monitor,
keyboard and storage units can be imported freely as donations by the
following category of donees,
1. School run by Central or State Government or a local body
2. Educational Institution run on non-commercial basis by any
organization
3. Registered Charitable Hospital
4. Public Library
5. Public funded Research and Development Establishment
6. Community Information Centre run by the Central or State
Government or local bodies
7. Adult Education Centre run by the Central or State Government or a
local body
8. Organization of the Central or State Government or a Union Territory
FDI POLICY FOR INFORMATION TECHNOLOGY
FDI up to 100 percent is permitted for E-Commerce activities subject to the condition
that such companies would divest 26 percent of their equity in favor of the Indian public
in five years, if these companies are listed in other parts of the world. Such companies
would engage only in business to business (B2B) E-Commerce and not in retail trading,
IIPM 48
inter alia, implying that existing restrictions on FDI in domestic trading would be
applicable to E- Commerce as well.
Special schemes are available for setting up Export Oriented Units for the Electronics/IT
Sector. These schemes are:
• Export Oriented Unit (EOU) Scheme
• Electronics Hardware Technology Park (EHTP) Scheme
• Software Technology Park (STP) Scheme
• Special Economic Zones (SEZ) Scheme
• Export promotion Capital Goods (EPCG) Scheme
• Duty Exemption and Remission Scheme
Major IT and IT & ITES Companies in India
Tata Consultancy Services GE

Wipro Technologies IBM
Infosys Technologies Dell
HCL Microsoft
Intel Cisco
MERGER AND AQUISITION
• M&A in Indian IT/IT & ITES Sector - Facts

• Classifying M&A – by geography and service offering
• Future Expectations
• Investment Trends (Financial Investments)
IIPM 49
• Impact on Stakeholders
• Participation in Consolidation – is it a Choice?
• About Baring Private Equity Partners
MERGER & AQUISITION –

• IT & IT & ITES exports from India have grown almost 4x in last five years,
reaching US$ 23.4 billion dollars in FY 2006
– Tremendous growth in size and scale of companies has accelerated the
M&A activity in recent years
• Over US$ 1.3 billion in M&A in CY 2005, around 80 deals

– In terms of number of deals, IT/IT & ITES was the largest contributor
among all sectors
– In terms of value of deals, it was third after Telecom and Energy
• In excess of US$ 1 billion in first four months of CY 2006 around 30 deals

– M&A activity in IT/IT & ITES sector growing rapidly
– Deal sizes are getting bigger
CLASSIFYING M&A
High risk; indicates

Low risk; customer base or saturation of growth
execution capability developed opportunities in core
quickly; indicates increased business
globalization
New
Geographie
s
Medium to high risk;
Same
could lead to
Geographie
diversified focus (for
s
instance an IT
Consolidation services firm acquiring
primarily for market Same New outsourced clinical
share; indicates Services Services research company)
mature market
Shaded boxes above reflect globalization and diversification of

service offerings
IIPM 50
Break-up of M&A Activity in IT/ITES Sector in

India
Value of M&A Deals - Jan '05 to Apr

'06
(16 months) 73% - Same geographies,
new services
27% - New geographies,

same services
Negligible activity in other

classifications
M&A in Indian IT/ITES industry reflects globalization and diversification

of service offerings
Indian Scenario - Same Geographies, New Services
• Examples
– Oracle’s acquisition of iFlex (core-banking solution, US$ 600 million)
– Subex’s acquisition of Azure (revenue assurance and fraud management,
US$ 140 million)
– Wipro’s acquisition of Spectra mind (BPO services, ~ US$ 100 million)
– Flextronics’ acquisitions of Future Soft and Deccanet
• Characteristics
– Global players acquiring Indian vendors’ capabilities – various deal sizes
from small to large
– Indian vendors acquiring companies – small to medium size deals
Indian Scenario - New Geographies, Same Services
• Examples
– EDS acquisition of Mphasis BFL (US$ 380 million)
– RR Donnelley acquisition of Office Tiger (US$ 250 million)
– TCS’ acquisition of Comicrom BPO in Chile (US$ 23 million)
– Secova’s acquisition of Ultra link
IIPM 51
• Characteristics:
– Global IT services vendors acquiring execution capability in India. Tend
to be large deals as scale is a must
– Indian vendors acquiring execution capability in other geographies. Small
to medium size deals
– Indian vendors acquiring customer base abroad. Small to medium size
deals
Future Expectations
Would expect to see larger acquisitions going forward by Indian companies, primarily
in new service areas
• Drivers
– Indian companies are cash-rich. Total cash on balance sheet of TCS,
Infosys and Wipro alone is around US$ 4 billion
– Companies have grown to a size where small acquisitions do not have
short to medium term impact
– Increased risk appetite; ability to assimilate large acquisitions being built
over period of time – Wipro’s ‘string of pearls’ strategy
• Success factors:
– Guarding against excess diversification
– Quick assimilation and integration of the acquisitions
Investment Trends (Financial Investments)

• Majority of transactions being done currently:
– Hiving off captives / divisions of large firms
• GENPACT (from GE by Oak Hill and General Atlantic, US$ 500
million)
• Flextronics Software Systems by KKR (US$ 900 mn)
– Growth capital / turnaround for existing companies
– Platform plays in niche areas
• Secova, Pharmarc, Quatrro, Newgen
– Secondary deals
• Softbank’s purchase of Barings’ stake in Slashsupport
• No Greenfield activity in previously ‘hot’ areas - voice-based support, CRM etc.
Summary
• M&A activity in Indian IT/IT & ITES industry
– Acquisition of execution capability in India or abroad
IIPM 52
– Acquisition of customer base abroad

– Acquiring new service offering capabilities (expected to accelerate in the
future)
• Investment activity in Indian IT/IT & ITES industry

– Hiving off large captives
– Growth capital / turnaround
– Platform plays in niche areas
– Secondary deals
Impact on Stakeholders
Employees
• +ves: Provides global opportunities for growth
• -ves: Improper integration could lead to uncertainty and dissatisfaction
Customers
• +ves: Increases range of services and geographies to choose from
• -ves: Integration issues could lead to customer dissatisfaction
Shareholders
• +ves: Increases growth opportunities, and scalability, leading to greater
shareholder returns
• -ves: Excess diversification, improper integration could hurt shareholder returns
Vendors
• +ves: Provides a platform for global growth along with the company
• -ves: As company becomes larger, older vendors could be marginalized
Mergers & Acquisitions in the BPO Sector

M&A in the BPO sector in India are not confined to Indian companies alone .In India;
M&A in BPO sector are proceeding on two fronts. Even as some Indian BPO companies
are getting acquired, other Indian BPO companies are acquiring operations both in India
and abroad.
• HCL Technologies acquired over a year ago a 90 percent stake in the
Apollo Contact Center in Belfast of BT Group. The deal gave HCL a
beachhead in the European market, and helped it bag business from the
London-based BT, including a $160 million order for setting up a BPO
operation for BT in India.
• TransWorks Information Services Pvt. Ltd., a Mumbai based BPO

company, was acquired recently by the Aditya Birla Group, a large
Mumbai based business conglomerate.
• Customer Asset, a Bangalore based BPO company, was acquired a year

back by ICICI OneSource. Customer Asset had about 750 employees and
operated a 350 seat call center in Bangalore.
IIPM 53
• For example Wipro, a Bangalore-based software and services company,

acquired Spectramind eServices, a CRM (customer relationship
management) services company in Delhi a few months back.
CHALLENGES IN IT & ITES SECTOR
The challenges facing the Indian IT & ITES BPO Industry are-
• Moving up the value chain will become a challenge for Indian companies as
customers seek vendors with significant domain experience and expertise.
• It will be critical for Indian vendors to be able to scale up quickly because large
customers prefer vendors with size and with a proven track record.
• There is a plentiful supply for entry level positions; there is a dearth of candidates
for middle management positions. This has led to an increase in attrition rates to
about 25-40 per cent
• Local infrastructure like roads, bridges, airports, urban transportation is now
becoming a bottleneck to the expansion of capacity. An adequate legal framework
for setting up IT companies and the execution of their businesses exists in India.
The IT bill passed in 2000 provides a legal framework which recognizes
electronic contracts, prevention of computer crimes, electronic filing of
documents etc. Foreign companies have been permitted to invest in India and set
up offices under the provision of the Companies Act and FEMA (Foreign
Exchange Management Act). In this light it can thus be observed that there is a
major role that IT can play in the implementation of the second-generation
reforms and also to growth. It is also very clear that second-generation reforms
are critical if the country in to make strides in growth and productivity.
IIPM 54
• Increasing awareness of potential benefits of ICT in rural development. India’s

attempts at moving towards an e-ready economy should therefore focus on
providing a favorable environment for the Central and State governments.
THE slew of protectionist measures announced recently by the federal government and
the governments of some States of the United States against the outsourcing of jobs to
cheaper destinations in developing countries do not appear to have unduly worried the
leaders of India's Information Technology (IT) sector, even though India will be the first
to be affected by the BPO (Business Process Outsourcing) `backlash'. Reacting to what is
perhaps the strongest expression in recent times of protectionist intent by the U.S.
government, namely, a clause in a $328-billion spending Bill passed by Congress
prohibiting the outsourcing of federal government contracts to India, Kiran Karnik,
president of the (NASSCOM), emphasized the relatively minor impact of the law on
business in India. The law will be in operation only until September 2004, and its impact
can be gauged from the fact that the share of U.S. federal government contracts in exports
of IT software and services from India is less than 2 per cent.
With a projected annual growth rate of 11 per cent, the Information Technology Enabled
Services (IT & ITES) segment, which accounts for the lion's share of outsourced jobs, is
considered by NASSCOM as representing the "most significant business opportunities
for the Indian software and services industry. There are at present 350,000 workers in IT
services and outsourcing in India, a figure expected to cross one million by 2008. "The
outsourcing law will have a definite impact, but at this time it is not very clear which
agencies in the federal government will actually adhere to it.
The outsourcing of IT & ITES jobs to India has had a major impact on the country's IT
industry. There was a time when Infosys, or for that matter any of the IT majors, their
sprawling campuses and plush modern offices serviced by food courts and gyms for a
large workforce of skilled and highly paid professionals, were the symbols of everything
that the new IT-driven economic dream promised. Just a decade into the IT boom, these
celebrated success stories have given way to new legends of entrepreneurial achievement.
It is now IT & ITES, the fastest growing segment within the IT industry that is being
projected as the promise of the future. The outward signs of the aggressive penetration of
this segment of the IT industry are nowhere more dramatic than at the International
Technology Park Ltd (ITPL) in Whitefield, on the outskirts of Bangalore, India's IT
capital. It is here that a large segment of the city's 100,000 outsourced jobs are located.
The urban call-centre worker who has now become the symbol, in IT industry hard-sell,
of the supposedly exploding employment opportunities that globalization has brought
India. Popular media representations of the typical call-centre operator celebrate the new
lifestyles spawned by this young, Western-oriented, urban workforce of contract workers,
who work by night, sleep by day, and supposedly make enough money to party wildly
over the weekends.
IIPM 55
GLOBALIZATION OF SERVICES- OTHER CHALLENGES AND

OPPORTUNITY
The following sections present perspectives on the key challenges and opportunities in
each of these areas.
1. Building and managing an effective cross-cultural workforce

As globalization accelerates, a globally distributed organization is more likely to involve
a large number of people from different nationalities, cultures and backgrounds
interacting on a regular basis. Further, the success of this organization’s operations will
be driven by the effectiveness of these interactions. Hence, building and managing an
effective cross cultural workforce will increasingly assume critical importance.
Take the case of a global automobile manufacturer and a global IT-IT & ITES service
provider. The auto major may source its design and parts from India, locate its production
in China, to manufacture cars for sale in different parts of the world. Clearly, these
distributed workgroups need to be culturally oriented towards working together
effectively. Yet the need for cross cultural orientation is likely to be even higher in the
case of a global IT-IT & ITES provider providing 24X7 support to a leading bank in the
US, from its delivery units in India, South Africa and the Philippines. While the former
(auto major) scenario will entail limited or no interaction between the car salesman /
potential customer and the teams in India or China, the latter (IT-IT & ITES provider)
could have the teams across delivery centers in three countries potentially interacting
with the same customer in the US – at different times of the day.
Over the past twelve-eighteen months, several leading India based IT-IT & ITES service
providers have expanded their global delivery footprint to other countries to leverage
benefits of a specific location, language and cultural affinity, and proximity to their
customers. As these firms build scale in multiple locations, the share of an international
(non-Indian) workforce is rising rapidly. To ensure that their globally dispersed teams
build healthy working relationships, firms are beginning to experiment with various
means of raising the levels of interaction amongst them.
2. Boom time in Cyberia

• According to news reports in August 2003, research firm Gartner has predicted
that India has the potential to generate $13.8bn in exports through business
process outsourcing (BPO) contracts by '07, despite a negligible growth in '02-03.
• India's revenue from offshore BPO, Gartner says, will represent 66% of the global
offshore BPO market. The size of the global BPO market by '07 would be
$173bn, of which $24.23bn would be outsourced to offshore contractors.
• Since organizations have been cautious in their adoption of offshore BPO
services, growth in offshore delivery, though continuous, would be moderate
compared to that last year," Gartner, vice president research, Sujoy Chohan said.
According to Gartner, the global offshore BPO market is expected to reach $1.8bn
this year ('03), a 38% increase compared to $1.3bn in '02. In '03, offshore BPO
will represent 1.5% of the total BPO market.
IIPM 56
• The market's decidedly bullish. Take a look at figures for 2002-03 from National
Association of Software and Service Companies (NASSCOM):
• The Indian IT market grew from Rs. 5,450 crores (US$ 1.73 billion) in 1994-95 to
Rs. 79,337 crores (US$ 16.5 billion)
• IT accounted for 3% of India's GDP
• The software and services exports registered a growth of 18.4%, recording
revenues of Rs. 34,800 crores (US$ 7.2 billion)
• IT & ITES-BPO segment witnessed a growth of 59% to reach Rs. 11,300 crores
(US$ 2.3 billion)
Total software & services exports (including IT & ITES-BPO) increased to US$ 9.5
billion (Rs. 46,100 crore) from US$ 7.6 billion (Rs. 36,500 crore) during 2001-02.
The total number of IT Software and Service companies in India is estimated to be 5000.
Of this, while 60% of the companies are domestic players and 40% are MNCs, the split in
terms of revenue is around 35% from domestic players and 65% from MNCs. From a
base of 6,800 knowledge workers in 1985-86, the number of IT software and services
professionals had grown to 650,000 by March 2003.
700000
600000
500000
400000
300000 NUMBER OF WORKERS
200000
100000
0
1985 2003
One of every four global MNC IT giants outsource their software requirements to India.
IBM, Philips, Dell, Oracle, Hewlett-Packard, Cisco, Intel, Bosch, Siemens and GE have
operations in Bangalore, Delhi and Mumbai. The boom isn't merely confined to IT.
Insurance and banking, which have been among the first to use call centers, have shifted
to India.
At least 70,000 jobs in the UK would be lost to India by the turn of the next decade,
according to Accenture. UK train operating companies plan to shift to Bangalore, in
South India, putting 1700 jobs at risk in Cardiff, Derby, Newcastle and Plymouth,
reported The Guardian.
3. Laying Down the Red Carpet
IIPM 57
The Indian government and various state governments have initiated several steps to
promote India as a major destination for the IT & ITES sector. These include a proposal
to set up an 'India Brand Marketing Fund', the creation of infrastructure in various parts
of the country and the inclusion of IT & ITES in educational curriculum. The
Government of Karnataka, which has been promoting Bangalore as India's IT capital,
has, in collaboration with McKinsey, initiated a 'Millennium BPO policy' which seeks to
generate a million jobs in this southern Indian city by 2010. Along with other southern
states, notably Kerala (which is promoting the coastal city, Kochi), Karnataka also boasts
the 'Last Mile Access' and a geographical positioning that favors satellite and submarine
cable networks. The policy outlines the development of small towns like Hubli,
Gulbarga, larger cities like Mysore and Mangalore, and creating an IT corridor outside
Bangalore.
In addition, the Karnataka government has awarded concessions like a 50% waiver of
stamp duty on lease or sale of property; exemptions on payment of entry tax on capital
goods and other rebates. The governments of Andhra Pradesh and Tamil Nadu have
initiated almost similar policies.
4. Making Inroads into Small Town India
NASSCOM Mumbai has 35 registered BPOs in the Western region of India, with at least
90 percent of these located in Mumbai and Pune. Around five percent are located in
Gujarat and the remaining in Bhopal and Goa.
Bangalore, touted as India's IT capital, continues to be a popular location, as are Delhi,
Mumbai and Chennai. But providing stiff competition to these metros are Hyderabad,
satellite towns like Gurgaon (near Delhi), Pune (near Mumbai) and other cities like Jaipur
and Nashik.
5. Easy Money, "Cool" Working Environment
Trasnworks, recently taken over by the Aditya Birla group, boasts of several Fortune 500
companies in its list of clients
The atmosphere in a call center is like a typical college - casual, friendly and cool,
munching chips and colas. The hierarchy is not very obvious and employees in their early
20s have a good time, salaries are high at Wipro Spectramind. Ranging from Rs 9000
-12,000 per month [US$ 187- 250] with productivity incentives, employees can also avail
of transport pickup and drops, 24 hrs medical facilities with a doctor and nurse in
attendance, a gym and 24-hour health food café (all these are not free, but subsidized.
India's ocean of skilled, computer-literate, English-speaking graduates are of the order of
250 million, helping to absorb a stiff attrition rate of anything between 30 to 60 percent.
The services sector is not a product of recent economic evolution – and trade in services
is not restricted to IT-IT & ITES.1 However, developments in this sector (ICT/ IT-IT &
ITES) have played a integral role in the globalization of services, not only as a prominent
output of the phenomenon, but also by facilitating the influence of other underlying
drivers.
Today, the Indian IT-IT & ITES sector provides services to a majority of the global 1000
companies (over two-thirds of the Fortune 500). Several leading global IT-IT & ITES
service providers have chosen to build their service delivery centers in India and are
aggressively ramping up their presence.
1
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The Global Scenario

Every nation is making serious efforts to participate in the digital economy. Asia has
become an emblem of the borderless economy. India’s famed IT-enabled service (IT &
ITES) sector, which now contributes an estimated US$17bn to the economy annually, is a
shining example to the emerging markets. India’s success story has been replicated
throughout the region—there are booming call centers surrounding Manila, customer
help desk centers in Malaysia, and Korean and Japanese language software production
houses in China.
Role of IT/IT & ITES Sector and its Unionisation
IT/IT & ITES sector and its role in country’s economic growth, in terms of its
contribution to GDP, exports and employment creation have been steadily increasing. As
per NASSCOM estimates, the size of the industry is at $22 billion, comprising $4.8
billion of domestic revenues; $12 billion of software and services export revenues and
$5.2 billion of revenues from exports of IT-enabled services and business process
outsourcing (BPO).
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12
10
0 DOMESTIC EXPORT OF ITES&BPO

SEGMENTATION OF
REVENUE IN IT(US$
BILLION)
Revenues of this sector now amount to 4.5 per cent of GDP. This makes it an important
segment of the non-agricultural sector. By way of comparison, the gross revenues from
IT services was, in 2004-05, about 20 per cent higher than the GDP generated by the
construction sector and almost three times as much as the GDP generated in mining,
electricity, gas and water supply. In terms of value addition, as a percentage of GDP, the
contribution of IT/IT & ITES sector is more than double the contribution of textile sector.
NEGATIVE EFFECT OF IT & ITES-
1. LOW EMPLOYMENT GENERATION

IT/IT & ITES sector contribution to employment does not at all match with its role in the
generation of income and foreign exchange. As per NASSCOM estimates, the
employment in IT/IT & ITES sector is around ten lakh in 2004-05. This represents only
around 0.21 per cent of the non-agricultural workforce and 0.08 per cent of the total
workforce in the country. When compared to other sectors of economy, the IT/IT & ITES
sector employment is quite low. For example, it constitutes a mere 3.4 per cent of the
total employment engaged in textile production.
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This mismatch between employment generation and contribution to gross revenue and
GDP of the IT/IT & ITES sector is not merely due to its technology savvy character but
mainly due to the tutored shift in the IT policy of the government towards software
services and away from hardware manufacturing. Originally, the emphasis of India's IT
policy was on generating an indigenous hardware industry, with focus on domestic
production of mini and microcomputers. But, the process of liberalisation and the
experience from 2000 onwards saw a shift in emphasis away from hardware to software
services. The hardware imports have been gradually liberalised to make available cheap
imported equipment for the growing software and services export industry. As a result,
the share of revenues from hardware sales fell from 44.4 per cent in 1995-96 to 17.8 per
cent in 2004-05 and this trend is continuing. In the hardware sector, the domestic
producers like PCL, DCM and ECI have been marginalised – rather, made to vanish –
and the MNCs like HP, IBM, Compaq, Epson, Samsung etc. have monopolised the
domestic market.
Further, the absolute dependence of the domestic IT/IT & ITES sector on service exports,
that too concentrated to one country, the USA, makes this sector extremely vulnerable to
external shocks and raises doubts on its sustainability. Moreover, even within the
domestic service providers, concentration of 61 per cent of the export revenues within the
top 20 players (out of a total of around 415 firms) along with the overcrowding by
numerous small firms with low turnover, lower margins, which in turn are leading to
comparatively low wages, reflects a very high range of income inequality, uncertainty
and extreme fragility of the service conditions among majority of the IT/IT & ITES
sector workforce. This is quite contrary to what is being showcased by the advertisement
blitz on the IT/IT & ITES sector by the media.
2. WORSE WORKING CONDITIONS

This phenomenon is reflected in the extremely fragile working condition in the IT/IT &
ITES
Sector. The much rosy picture painted in the media may be true only in respect of a
smaller segment of the IT/IT & ITES sector. The conditions generally prevailing in the
larger
segment of the IT/IT & ITES sector are:
• Long working hours (without any compensation for the extra hours),
• Almost no leave or holidays,
• Strenuous work environment,
• Close surveillance on employees,
• No right to collectively represent or complain et al..,
• There are no social security provisions even for this tiny segment, except in a few
firms.
There cannot be any sector – be it in industry or services – which can stake any claim
that it should be a trade union-free sector or immune to unionisation. The employees of
the Information Technology and IT-Enabled Services (IT/IT & ITES) sector also should
have the basic right to association, which is a fundamental right guaranteed by the Indian
Constitution. Moreover, the right to association and right to collective bargaining
constitute the core conventions of the International Labour Organisation (ILO). The latter
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includes the right to strike as well. The industrial legislations in the country, including the
Trade Union Act, are applicable to the IT/IT & ITES sector as well. The labour ministry,
government of India, has taken a stand that the state governments are the “appropriate”
authority under labour laws and legally vested with powers to deal with violations of
labour laws that protect the interests of the workers of the IT/IT & ITES sector. Further, it
had requested the chief secretaries of the states to get implementation of labour laws
reviewed expeditiously. This, in itself, confirms the trade union view that the IT/IT &
ITES sector can under no circumstances be outside the purview of industrial legislations.
The present debate has been sparked off with the Centre of Indian Trade Unions (CITU)
forwarding a list of several complaints it received from the employees in this sector to the
labour ministry for taking suitable action. The CITU stressed that steps must be taken to
see that this sector respects labour laws of the country and creates proper working and
living conditions for the employees.
3. UNHEALTHY TREND
Going against the human biological clock, essential for work in the BPO industry, has a
direct impact on health, particularly women's health.
The BPO industry even has a name for it: BOSS - Burn out Stress Syndrome. Here's what
www.BPO.org has to say: BOSS syndrome is seen very commonly among young people
working in call centers.
Gastrointestinal problems are inevitable for those working at nights as the body is put
under chronic stress. A potentially fatal increase in heart rhythm can result in severe
chronic gynecological problems in women and sleep disorders in both men and women.
A study (2001) by the Seattle based Fred Hutchinson Cancer Research Center, in
association with the National Cancer Institute has shown that women who work the night
shift may face an increased risk of breast cancer of up to 60 percent. The research looked
at night-shift work and light at night as specific risk factors for breast cancer. Sleep
deprivation and exposure to light at night may interrupt melatonin production, thereby
stimulating the body to produce more estrogen, which is a known hormonal promoter of
breast cancer. The astonishing finding that women who had worked the "graveyard shift"
at least once in the decade before diagnosis had as much as a 60 percent increased risk of
breast cancer compared with those who had not, has implications for the thousands of
young women queuing up for jobs in call centers.
After working on overnight shift, many shift workers face a serious risk of falling asleep
at the wheel. Studies have found that auto accidents increase during the early morning
hours. In fact, several studies show that sleepiness and alcohol have very similar effects
on the ability to drive.
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NEED FOR UNIONISATION
The employees of IT/IT & ITES sector have begun to feel acutely the need for
unionisation, perhaps not so much to make or achieve any economic demands but more
for pursuing their demands of security of job and better work place environment. Though
there is a growing demand for unionisation from the employees of this sector, the same is
muted, as any attempt to do so will result in arbitrary dismissal.
IT/IT & ITES sector is a by-product of globalisation and the practice of Business Process
Outsourcing (BPO), resorted to internationally. Hence, we need to take note of the global
practices in this sector. There are trade unions functioning in the IT/IT & ITES sector in
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several developed countries. There is no reason why India should be exception to this
global trend.
FALSE ARGUMENTS AGAINST UNIONISATION
IT/IT & ITES – and more particularly the BPO segment thereof – is showing a frenzied
response to the very suggestion for unionisation of the employees. First, the NASSCOM
came out with a bald statement that there is no need for trade unions in the IT/IT & ITES
sector. Perhaps realising such a stance would not be tenable, the NASSCOM later made a
correction in their stance that the employees of the IT/IT & ITES sector did not want
trade unions.
The threat perception on the part of the employers of the IT/IT & ITES sector is,
unfounded. The IT/IT & ITES sector has nothing to fear about unionisation, if the
employers can be transparent and are willing to recognise the merit of engaging their
employees in dialogue on issues relating to their service conditions and work
environment. But, in our country the employers have never taken kindly to the very idea
of the employees unionising, as they innately prefer a union-free environment.
There is an argument that India will lose its competitive advantage of the BPO segment
of the IT/IT & ITES sector, once trade unions become a reality in this sector. But, this has
to be viewed from two angles. First, there is no justification of the IT/IT & ITES
companies to persist with their race to the bottom both within the country and between
countries of the third world aspiring to secure the favour of international companies in the
matter of BPO contracts. In this, there is an implied truth that the employers fear that the
employees, once unionised, may seek a larger share of the pie, which is presently taken
by the former. The foreign companies resorting to BPO attach more value to the skills
and efficiency levels - including the fluency of language, areas in which India is
definitely having an edge over other developing countries. Second, there is no reason
why the employees, even after unionisation, will refuse to cooperate with the employers
in the matter of sustaining the work orders, as these employees can very well be expected
to have an enlightened vision of their prosperity being intertwined with the prosperity of
the very companies that they are serving. So, India can and will continue to be the
favourite destination of BPO, notwithstanding unionisation of the IT/IT & ITES sector.
At any rate, there is no empirical evidence to suggest the foreign companies awarding
BPO contracts are specifying absence of trade unions as a necessary precondition!
What is required is a positive thinking and approach on the part of the employers towards
recognising the trade unions rights of the employees the IT/IT & ITES sector.
Unionisation could lead to a more dignified work place atmosphere and positive response
would not be lacking on the part of the employees even after unionisation.
It is, therefore, imperative that the present fear driven work environment gives place to a
responsible unionised situation in the IT/IT & ITES sector. The right course for the
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employers should be to encourage their employees to form their own unions and deal
with them as representative entities ushering in a process of dialogue to resolve the issues
and grievances. This should emerge as a reality very soon. Whether these unions should
chose to affiliate with any central trade union or not is another question, which must be
left to free will and discretion of the employees.
THREADS TO BPO SECTOR
Despite the boom and support that BPO sector has fetched, there are certain grass-root
level setbacks too. These setbacks are strongly propagated to be threats resulting into
backlash to the BPO activity in India. These are as under:
1. Lack of maturity in service line, increasing competition among e-logistics providers

and management resistance are the main deterrents to the outsourcing in the logistics
Sector.
2. Discretionary cuts in budgets, low growth due to industry maturity and decentralized
Nature of facilities management are the main deterrents to the outsourcing in the
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facility & operations management sector.

3. Privacy concerns and technical nature of subject matter are the main deterrents to the
Outsourcing of legal services.
4. If all above is not enough, the companies which are outsourcing non-core processes
from third party service providers are literally placing their fate in the hands of another
company, which appears to be a normal setback of BPO at the outset.
5. Some companies which jumped BPO market in India are now looking to sell their
assets being unable to scale operations up to the required level. As per the NASSCOM
report, recently there were about 200 Indian companies offering BPO and related
services looking for buyers.
6. Companies rush into BPO market without understanding the kind of operational and
marketing issues they would have to cope with and the kind of gestation periods to be
expected before profits can start flowing in consistently. As a result, many facilities that
were set up are lying vacant and the failed enterprises have to either close down or get
acquired, as they have neither funds nor clients.
7. The rapid growth of India's IT & ITES-BPO industry, has not been taken too well in
developed countries from where jobs are coming to India. Recently, in the US, bills
have been tabled in five states namely; New Jersey, Maryland, Connecticut,
Washington and Missouri that sought to ban the transfer of state data processing
contracts to developing nations. In the UK, three of the country’s biggest trade unions
have come together to fight the loss of jobs to India.
The complaints from the employees in the IT/IT & ITES sector include the
following:
• The employees are working around 12 hours a day without getting any overtime
payment.
• In many call centres/BPO establishments, employees are forced to work only in
night shifts, in contravention of ILO convention on frequency of night shift and
compensatory allowance for doing night duty.
• There is no grievance redressal machinery and the employees working in the
industry face summary dismissal if one even tries to raise any complaint about
working conditions.
• Several undertakings do not give even appointment letters to the employees so
that they can be dismissed from service without even giving notice.
• Any attempt to form a union or association by the employees is penalised by
summary dismissal.
• Several cases of sexual harassment and molestation of women employees have
occurred but invariably it is the women complainants who are asked not to report
for duty from the next day. This creates a situation where women employees are
faced with humiliating working conditions, while the culprits are rarely punished.
The occurrences are more frequent when women work in the night shift.
• There are no rules to govern the working conditions, and occupational hazards
have been reported in several cases without any remedy for redressal.
• Remunerations are arbitrarily fixed with consolidated wages and there is no social
security or job security for the employees.
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• Compared to the profits earned by the undertakings, the salary level is extremely
low leading to discontentment among the employees but they cannot raise any
dispute for fear of losing jobs.
• Maternity benefit is denied to women employees. Crèche facilities are absent
causing hardships to mothers with young children.
These are only illustrative and not exhaustive. The most common complaint is the
practice of the employers impounding the educational certificates and the passport of the
employees, in their attempt to tackle the problem of high attrition levels prevalent in this
sector. Yet another practice, widely prevalent in this sector, is not to pay the employees
their contracted monthly salary upfront, but to defer a substantial part of it to be paid after
expiry of a specified period subject to their performance being satisfactory.
SATYAM COMPUTERS AND EFFECT OF GLOBALISATION

ON SATYAM
TABLE OF CONTENTS
PAGE NO.
1. INTRODUCTION -01
2. HISTORY -04
3. ARCHIEVES -06
4. MERGER & ACQUISITION -08
5. SATYAM PARTNERS -11
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6. AWARDS -12
7. MILESTONES -15
8. GLOBALISATION - 21
9. EFFECT OF GLOBALISATION - 24
10. CUSTOMERS - 27
11. SATYAM COMPETIVE STRENGTH - 29
GRAPH PAGE
NO
1. CONSOLIDATED INDIAN GAAP FY 2007 - 04

2. REVENUE AND NET INCOME - 05
3. NET PROFIT IN FY, 07 Q3 & Q4 AND Q2,07 & Q1,06 - 10,22
4. NET INCOME - 23
5. TOTAL ASSETS - 23
6. REVENUE DERIVED FROM U.S. - 24
7. REVENUE FROM MANUFACTURING AND BANKING& FINANCE - 25
8. REVENUE FROM EXISTING CUSTOMER - 27
9. REVENUE FROM LARGEST CUSTOMER - 27
10. REVENUE FROM DIFFERENT SECTOR - 28
11. REVENUE FROM SERVICES AND BPO - 28
12. REVENUE FROM DIFFERENT COUNTRIES - 29
SATYAM COMPUTERS
INTRODUCTION
• Satyam Computer Services Ltd. (NYSE: SAY), offering a range of expertise
aimed at helping customers re-engineer and re-invent their businesses.
• Nearly 45,700* highly-skilled professionals in Satyam work onsite, offsite,
offshore and nearshore, to provide customized IT solutions for companies in
several industry sectors.
• Satyam's network spans 57* countries, across 6 continents.
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• Nearly 45,700* dedicated and highly skilled IT professionals, work in

development centers in India, the USA, the UK, the UAE, Canada, Hungary,
Singapore, Malaysia, China, Japan and Australia
• Serve over 599* global companies, including over 173* Fortune 500
corporations.
• Strategic technology and marketing with over 90* top-notch companies that
help us provide end-to-end services to our customers.
• Developed a unique quality hallmark, called eSCMSM (eSourcing Capability
Model), for (IT & ITES), in collaboration with Carnegie Mellon University and
Accenture.
• Specially developed Business Continuity Model (BCM), which allows us to
continue mission critical operations of our customers, even in the most
challenging of times.
Established on: June 24, 1987

Board of Directors
Executive Directors:
Mr. B. Ramalinga Raju (Founder & Chairman)
Mr. B. Rama Raju (Co-Founder & CEO)
Mr. Ram Mynampati (Board Member, President – Commercial and Healthcare
Businesses, Chairman – Citisoft, Plc.)
Non-Executive Directors:
Professor M Rammohan Rao
Dr. (Mrs.) Mangalam Srinivasan
Prof. Krishna G. Palepu
Mr. Vinod K Dham
SERVICES OFFERED
• Application Development and Maintenance

• Business Intelligence and Data Warehousing (BI&DW)
• Business Process Outsourcing (BPO)
• Consulting and Enterprise Solutions
• Embedded Services
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• Engineering Solutions
• Enterprise Storage Solutions, ERP
• Infrastructure Management Services
• Managed IT Services
• Quality Consulting
• GIS Technology
• High-Tech Solutions
• MES and LIMS
• Silicon Design Services
• Six Sigma Consulting
Development Centers:
Bangalore, Basingstoke, Beijing, Bhubaneswar, Budapest, California, Chennai, Chicago,
Dalian, Georgia, Guangzhou, Hartford, Hyderabad, Kaula Lumpur, Melbourne, Munich,
Mississauga, New Jersey, Ontario, Pune, Sao Paulo, Shanghai, Singapore, Sydney,
Tokyo, Wiesbaden.
Subsidiaries:
• Nipuna Services Limited
• Satyam Technologies Inc.
• Satyam Computer Services (Shanghai) Co Ltd
• Citisoft Plc.
Joint Ventures:
• Satyam Venture Engineering Services Pvt. Ltd.
• CA Satyam ASP Pvt. Ltd.
SATYAM INFOWAY
1. India's First Private ISP
Satyam's subsidiary, Satyam Infoway, became the first private Internet Service Provider
(ISP) in India, when it started operation in 1998.
2. First Indian Internet firm on NASDAQ
Satyam Infoway was listed on NASDAQ (NASDAQ:SIFY) in November 1999, making
it the first Indian Internet firm to trade on the premier US stock market. Infoway was
oversubscribed by a factor of over 27, the largest ever for any Indian ADR/ADS offering.
Financial Summary
Consolidated Indian GAAP Highlights for FY 2007:
• Revenue: Rs. 6,485 crore; a growth of 35.3% over fiscal 2006

• Total income: Rs. 6,668 crore; a growth of 35.8% over fiscal 2006
• Net Profit after Tax: Rs. 1,405 crore; a growth of 43.1% over fiscal 2006
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7000
6000
5000
4000
3000 Consolidate Indian GAAP
2000 FY 2007(in crore)
1000
0
Revenue Total Net Profit
income after tax
HISTORY
• B. Ramalinga Raju is founder and chairman of Satyam Computer Services Ltd.

• The company was incorporated in 1987, went public in 1992 and has since grown
to become one of India’s preeminent information technology (IT) companies,
with a global presence in 56 countries, serving over 150 Fortune 500 and about
400 multinational corporations. It employs more than 25,000 people.
• Satyam is on target to achieve the coveted US$1-billion revenue mark by the end
of FY2005-06. As per US GAAP, revenue for Q2 was US$267.85 million, a
sequential growth of 8.86 percent. Q2 was a landmark quarter, as this was the first
time that the company achieved annualised revenue run rate of a billion dollars.
• The company has vigorously expanded into new areas such as infrastructure
management, enterprise business solutions and software for engineering processes
in the automobile and defense industries Its IT consulting practice is also earning
significant revenues.
• Satyam already has a large US presence and is wooing clients in non-English-
speaking countries in Europe, Latin America and northern Asia. It has also set in
motion a global merger and acquisition strategy.
• Mr. Raju has an MBA from Ohio University. He is also an alumnus of Harvard
Business School. He has won several awards and global accolades, which include
Dataquest IT.
• Man of the Year in 2000 and CNBC’s Asian Business Leader–Corporate Citizen
of theYear award in 2002.
INFORMATION ON THE COMPANY

Business Overview
Satyam are a global IT solutions provider, offering a comprehensive range of IT
services to their customers including, application development and maintenance services,
consulting and enterprise business solutions, extended engineering solutions and
infrastructure management services. They also offer BPO services through our majority-
owned subsidiary company, Nipuna. Our headquarters are located in Hyderabad, India.
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They began providing IT services to businesses in 1988 and are currently the fourth
largest Indian IT software and services company, based on the amount of export revenues
generated during fiscal 2005. Their revenues grew to $1,096.3 million in fiscal 2006 from
$459.2 million in fiscal 2003, representing a compound annual growth rate of 33.7%. For
the same period, their net income grew from $82.3 million to $249.4 million. The number
of their employees, whom they refer to as associates, grew from 9,838 as of March 31,
2003 to 28,624 as of March 31, 2006.
1200
1000
800
2003(In US$
600 Million)
2006(In US$
400 Million)
200
0
Revenue Net Income
ARCHIEVES: 2001
Satyam's Middle East Solutions Center inaugurated at Dubai Internet City
Satyam Computer Services became the first of the Top 5 Indian software services
companies to open its facility at the spanking new Dubai Internet City. Satyam's Middle
East Solutions Center was inaugurated today by Mr. Mohammad Al Gergawi, Director-
General of the Dubai Technology, E-Commerce and Media Free Zone Authority, and
Chairman of the Dubai Internet City (DIC).
Clients include Emirates Airlines / Mercator, Dubai Duty Free, NMTC, Masafi Mineral
Water Company, Mashreq Bank, National Bank of Dubai, Al Futtaim, ARAMCO, Public
Warehousing Company, Alba and Kuwait University.
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ERP: SAP
Business Transformation for Value Creation
Mergers & acquisitions, divestures, increasing globalization, receding organizational
boundaries and emerging new technologies are transforming the way businesses are run
today.
Satyam’s SAP practice is helping customers around the world manage this constant
business transformation by delivering business solutions that help them:
• Integrate key business processes.
• Manage value-chain across extended enterprises.
• Enable collaboration among different organizations.
• Deploy best-in-class solutions for critical business needs.
• Improve operational efficiency.
• Improve information flow & access.
• Enable interoperability between heterogeneous applications.
• Reduce costs.
ARCHIEVES: 2004
Satyam to recruit Management Graduates from Singapore, first time outside
Satyam Computer Services Ltd. (NYSE: SAY), announced that it would recruit fresh
graduates from local universities in its first management graduates hiring programme
outside India to spur its fast-growing software and outsourcing activities in South East
Asia and China.
The Hyderabad-based Company, which has its Asia-Pacific headquarters in Singapore,
announced it would hire the first batch of five to six local graduates - Singapore citizens
or permanent residents - under Singapore's Ministry of Trade and Industry's Asian
Business Fellowship programme.
Under the programme, the Singapore government will subsidize training cost for a
defined period before being deployed in India, China and Singapore. The graduates will
be drawn from the IT, business development and marketing courses.
These management graduates will focus less on IT and software and more on marketing-
related skills, including pre-sales, marketing, business analysis and client interface.
Singaporeans, with their multicultural background and language skills, can play such
roles skillfully in South East Asia and China and help Satyam move up the value chain,"
With the recent launch of operations in Hungary and Brazil, Satyam is
preparing to actively engage in Europe and Latin America. Apart from expanding base in
US, Canada and Australia, Satyam also strengthened its operations in Bhubaneshwar,
Chennai, Bangalore and Hyderabad, in India.
KNOWLEDGE MANAGEMENT
Leveraging knowledge involves taking stock of existing knowledge (knowing what the
organization knows), disseminating it across the organization and continuously upgrading
it to keep pace with the requirements of a rapidly changing business environment.
Knowledge Management initiatives at Satyam
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K-Window: At the heart of Satyam’s Knowledge Management initiatives is K-Window.

This end-to-end KM solution includes a large Knowledge Repository containing
thousands of documents relating to Projects, Service Offerings, Best Practices, Case
studies, Competitors, Customers and Alliance partners. An Expert Locator helps
Associates to contact experts in the respective fields.
Publishing: This initiative focuses on promoting Thought Leadership by enabling
Associates to publish books, working papers, journal articles and case studies.
Pathshala: The Patashalas are highly interactive informal Knowledge sharing sessions
which typically last for about 90 minutes. These sessions aim at capturing and sharing the
Tacit/ Experiential knowledge of experts. Patashalas are facilitated by Subject Matter
Experts (SMEs) from within and outside Satyam who volunteer to share their
experiences, ideas, best practices and deep insights with Satyam associates.
Contemporary topics relevant to Satyam’s businesses are chosen for discussion.
MERGER AND AQUISITION

1. Satyam acquires Knowledge Dynamics
Satyam Computer Services Ltd. (NYSE:SAY) announced that it has acquired Singapore-
based Knowledge Dynamics Pte. Ltd., a high-end consulting solutions provider in
Business Intelligence.
The acquisition is an all-cash deal involving a consideration of US$ 3.3 mn of which US$
1.8 mn is initial payment and the balance would be paid over two years. An additional
sum of US$ 2.2 mn would be made as earn out payments based on certain set revenue
and profitability targets over the next three years.
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Synergies between the two companies will lead to Satyam emerging as a partner of
choice for its customers globally, as it now offers the entire Business Intelligence & Data
Warehousing (BI & DW) footprint of Intelligence, Insight and Integration. Satyam will
further leverage this acquisition to offer solutions on Knowledge Process Outsourcing
(KPO) through Nipuna, its BPO subsidiary.
The deal marks the first acquisition in Asia Pacific by the Indian software giant which
recorded revenues of US$793 million in the fiscal year ended 31 March 2005.
The merged operations, which will be driven out of Satyam’s headquarters for the Asia
Pacific region in Singapore, will enhance its global positioning in the high-end DW-BI
consultancy services which is forecast by Gartner to grow at a compounded annual rate of
nearly 9% to US$22 billion in 2005. Knowledge Dynamic’s CEO, Mr Venkat Narayanan,
will continue to lead the Knowledge Dynamics team following the acquisition.
Key benefits of Satyam’s acquisition of Knowledge Dynamics include:
With this acquisition, Satyam’s strengths in Data Warehousing will be combined with
Knowledge Dynamics’ strengths in business intelligence to cover the 3i’s of DWBI ie:
Integration, Intelligence, Insight. Coupled with its technical and domain expertise,
Knowledge Dynamics’ BI intellectual property – iDecisions – will become a strong
differentiator for Satyam in the booming global BI market. Through its BPO subsidiary,
Nipuna, Satyam will leverage this acquisition to offer solutions on Knowledge Process
Outsourcing.
Leverage on integrated high-value and cost-effective solutions that will make Satyam’s
customers more competitive. Satyam’s CMMi certified DWBI Global Delivery capability
and Knowledge Dynamics’ recognition as a niche high end consulting solutions provider
in BI will provide integrated, high value solutions which are also cost effective.
2. Satyam expands footprint in Malaysia
SINGAPORE--Satyam Computer Services unveiled Thursday plans to build the

company's large-scale development center in Asia, the first outside its home country.
Cyberjaya the new campus--which is expected to be completed by mid-2008--will have
an initial 2,000 square-feet facility and is likely to expand up to 5000 square feet over the
next few years,
People will be added to the current staff strength of 150 over the next six to seven
months, with plans to expand up to 2,000 people when the new Cyberjaya facility is built
a year and half later.
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To be built at an initial investment cost of under US$2 million, the Cyberjaya facility will
cater not only to the Malaysian market but also meet "software export and global
customers' requirements.
3. Satyam Computer Services to collaborate with Cisco
Satyam Computer Services has announced to collaborate with Cisco to explore a new
venture that will optimize, deploy and manage solutions for handling medical distress
solutions and health management solutions for global markets. Cisco has announced a
$100 venture programme targeting the Indian innovation.
Satyam has more than a decade of experience in delivering solutions to the healthcare
industry, and will continue to focus directly on this market. Now, working in
collaboration with Cisco, the development of a transformational business model
reinforces the collective vision of both companies to service healthcare needs by
effectively leveraging technology, process and domain expertise.
Satyam has customized its software applications with the integration of Cisco unified
communication system and Cisco unified contact center which makes the services more
citizen-friendly and effective. Taking advantage of the network as a platform for
delivering managed services will also help to build a model that can be replicated across
even the neediest parts of the world. The elegance of this model lies in its modularity and
the scalability that internet protocol (IP) supports, together with a robust process
framework which will help enable services to be rolled out in a phased manner globally.
The company made this announcement after the trading hours Wednesday, 31 October
2007.
OTHER COLLABORATIONS AND AGREEMENTS
• On 23 October 2007, Satyam computer signed an agreement with Fujitsu Services

to provide IT services to Reuters as part of a 10-year. Also, the company acquired
100% stake in Nitor Global Solutions (NITOR) of the UK, a niche-consulting
firm providing infrastructure management services (IMS).
• As per recent reports, Satyam Computer will soon open a software development
centre in Madurai. The company has applied for 50 acres of land under
Electronics Corporation of Tamilnadu (ELCOT) scheme proposed in the
university land on Theni road for this project.
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• On 27 September 2007, Satyam Computer Services launched a new solution

center in Brisbane's central business district. The facility will support Satyam's
Queensland-based clients across various IT platforms with an emphasis on
enterprise application-based solutions. Hyderabad-based Satyam Computers
already has development centres in Melbourne and recently launched a regional
solutions hub in North Sydney adding up to over 7,500 square meters.
• On 5 September 2007, the company launched integrated digital media framework
(IDMF), a solution accelerator for content producers to increase monetizable
opportunities. The launch took place on the sidelines of IFRA Expo 2007 in
Chennai.
• Satyam Computer Services’ net profit surges 7.19% to Rs 417.15 crore on
10.75% rise in sales to Rs 1948.24 crore in Q2 September 2007 over Q1 June
2006.
2000
1500
1000
Net Profit
500
0
Q2,07 Q1, 06
SATYAM PARTNERS
Adobe Interactive TKO Inc. Salesforce.com
APRISO Intershop Communication SAP
Ariba Interwoven SAS
Automatos Ipath Savvion
Autonomy JDA Seven Hills Business Solutions Ltd
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BEA Jonova Sistran
Brocade Kronos Software AG
Bsafe LeftBrain Solarc
Business Objects Lombardi Sterling Commerce
CAS Mainstay Partners, LLC. Sybase
COGNOS Managed Objects Symantec
Computer Associates Mark Logic Symbian
COMPUWARE Metastorm Symfact AG
Corticon Technologies Microsoft SumTotal Systems , Inc
Dassault Miebach Logistics Technology Evaluation Centers
eBaoTech MindFlow Telelogic
EMC-Documentum NETAPS TIBCO
EPiServer Network Appliance Tower Technology Inc.
FairIssac Corporation OAT Systems Triple Point Technology India Pvt. Ltd.
FAST TM Oblicore UGS
FatWire Software Oracle UNITED DEVICES
Gigaspaces Pegasystems Inc. VelQuest
Global 360 Pentaho Vitria
Goldratt Consulting Planview Weblayers
i2 Technologies Platform Computing Xerox
IBM Primavera
IDS Scheer Ramco
Informatica Red Hat India
AWARDS
2006
• Ranked the 3rd best company to work for in India by BT-Mercer-TNS
The BT-Mercer-TNS Best Employer Survey 2006 has ranked Satyam Computer
Services as the third best company to work for in India.
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• The Asian MAKE Award

Satyam has been recognized as a 2006 Asian Most Admired Knowledge
Enterprises (MAKE) Winner.
• Ranked the global number two outsourcing vendor
Satyam has been ranked by the Brown-Wilson Group as the number two
outsourcing vendor globally
• Ranked in the ASTD BEST awards
Satyam has been ranked 15th in the American Society for Training &
Development's (ASTD) Fourth BEST (Building talent, Enterprise-wide,
• TDWI Best Practices award
For the second time, Satyam has received the prestigious award from TDWI (The
Data Warehousing Institute) of North America.
• The RASBIC awards
Satyam won the RASBIC (Recruiting & Staffing Best in Class) awards for its
most innovative recruiting and staffing practices
2005
• Recognized for corporate social responsibility
Satyam was honored with the Corporate Social Responsibility (CSR) award by
the Businessworld-FICCI-Social and Economic Development Foundation for
being Corporate Citizen Number One.
• ‘Vendor – Client Collaboration Award’ at Gartner’s Global Sourcing
Summit
Satyam won the Vendor/Client Collaboration Award – a prestigious award for
effectiveness in delivering successful consumer alliance – at the Global Sourcing
Summit, hosted in San Diego, California from November 1–3, 2005.
• The ICWAI Award
Satyam won the ICWAI National Award for Excellence in Cost Management for
2005 under the services category. Instituted in the year 2003 by the Institute of
Cost & Works Accountants of India (ICWAI
• The ROC Award
Satyam won the Recognition of Commitment Award (ROC) from the Institute of
Internal Auditors (IIA), USA.
• Outstanding System Integrator Award from Oracle
Satyam won the ‘Outstanding System Integrator’ award from Oracle Corporation
during the Executive Partner Forum 2005.
• Indo-Australian Business Excellency Award

The Government of Australia recognized Satyam as a key Indian company in
Australia and presented the Indo-Australian Business Excellency Award.
• Pune Center assessed at SEI PCMM Level 5
Satyam’s Pune Development Center was certified at Level 5 of People Capability
Maturity Model (PCMM) by TUV Rheinland.
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• Ranked third in Corporate Governance

Satyam was ranked third in the Corporate Governance Survey by Asset
Benchmark Research for 2005. Over 110 global institutional investors voted for
Satyam’s exemplary corporate governance.
• Among the Top 13 best managed companies in India
For the second year in a row, Satyam was recognized as one of the top 13
companies in India.
2004
• HT Power Jobs Award
Satyam was recognized as an “organization that creates fun and joy at work” by
HT Power Jobs awards for HR Excellence 2004.
• Gartner Awards
Key IT and business executives voted Satyam as the best in the ‘Risk
Management’ and ‘Solution Delivery’ categories, at the Gartner Global Sourcing
Summit, held in Bonita Springs (Florida) during November 7-9, 2004.
2002
• Ranked in the CNBC-Hewitt Best Employers Survey
Satyam was ranked among the top 10 for the second time in the survey. Taking
Satyam into the top 10 were high scores received across parameters such as top
management’s belief in people, a friendly and open work culture that promotes
entrepreneurship and is process-centric.
• Ranked in the Business Today-Mercer–TNS Survey
Satyam featured in the top 10 ‘Best Companies to Work for in India’ in a survey
conducted by the Business Today-Mercer–TNS.
• Satyam bags National Award for bright ideas
Satyam has been Selected for a special and singular award (IT Industry) in
"Excellence in Suggestion Scheme Contest 2002" for "Suggestion Scheme
Performance in Information Technology Industry".
• Aberdeen Best Practice September 2002
Satyam's IT Offshore Service Delivery Program cited as 'Industry Best Practice'
by Aberdeen Group report.
• Excellence in Corporate Governance, 2002
Institute of Directors awards Golden Peacock to Satyam for excellence in
corporate governance.
• Ranked among Global Top 10

World Bank's Intranet site developed by Satyam ranked among the world 10 Best
Intranet Site by Norman Nielsen group.
• Security Standards, 2002
Satyam's certified under BS 7799 International Information Security and
Management Standards.
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• TDWI Award 2002

The data warehousing engagement executed by the BI&DW practice for GE
Power Systems won the TDWI award under the Global Data Warehousing
category.
2001
• IMC Bajaj National Quality Trophy for 2001
Satyam won the prestigious "IMC Bajaj National Quality Trophy" for 2001, one
of the highest Business Excellence awards in India.
• First ISO 9001:2000 Certified Organization in the World
Satyam became the first organization in the world assessed by BVQI and found to
be in accordance with the requirements of the new ISO 9001:2000 International
Standards, under the Tick IT scheme.
• SEI CMM® Level 5 Assessment
Satyam achieved this most sought after Quality standard in the world – the Level
5 of the Capability Maturity Model (CMM®) of the Software Engineering Institute
(SEI) instituted by the Carnegie Mellon University - in the first attempt.
1999-2000
• World Economic Forum's Pioneering Technology Company
In 1999, the World Economic Forum identified Satyam as one of "100 Leading
Pioneering Technology Companies" at the forefront of the knowledge economy.
• Satyam bags Golden Peacock Award for Innovation
Satyam bagged the coveted Golden Peacock award – 1999, chartered by the
Institute of Directors, Ministry of Human Resources, Government of India, for
innovative products/ services in the Infotech-Telecom category.
• World Economic Forum's Global Growth Company
In 1997, Satyam was selected by the Switzerland-based World Economic Forum
and the World Link magazine as one of India's "most remarkable and rapidly
growing entrepreneurial companies
• Best Software Exporter Award
Satyam was ranked the Top Software Exporter in the State of Andhra Pradesh
among STP units, during 1997-98 by the Software Technology Parks of India
(STPI).
Awards to the Founder and Chairman

• ABLA Award, 2002: CNBC's Asian Business Leaders Award for "Corporate
Citizen" for 2002.
• Dataquest IT Man of the Year Award 2000
Dataquest, a major information technology magazine, named Satyam Chairman
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B. Ramalinga Raju their IT Man of the Year, for his contributions to the growth
of IT in India.
• Ernst & Young Entrepreneur of the Year (Services) Award 1999
The Award celebrates the indomitable spirit of the Indian entrepreneur and seeks
to recognize the dreamers and visionaries who have driven their enterprises to
exceptional heights of success against all odds.
MILESTONES OF SATYAM
Milestones: 1987 - 1992

Satyam's growth has been an eventful and highly charged journey toward excellence, a
journey marked by pioneering achievements and global awards. Satyam has made
significant contributions to the industry in India and overseas. Some of our important
milestones are listed below.
May 1992 Initial Public Offering oversubscribed by a factor of 17.
Installation of 64 kbps satellite link, which paves the way for
January 1992
online access to global clients.
August 1991 Recognized as a Public Limited Company.
Deere & Co., Satyam's first Fortune 500 Client, initiates an
June 1991
offshore software project.
June 1987 Satyam incorporated as a private limited company.
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December 14, 1998 Announcement of Satyam GE Joint Venture.
November 22, 1998 Launch of Satyam Infoway's ISP Service.
Satyam Spark Solutions launches SearchPad, an intelligent
September 1997
search agent for the Internet.
First Indian IT Company to get ITAA Certification for Year
May 1997
2000 Solutions.
Formal inauguration of Satyam Technology Center outside
September 1996
Hyderabad city.
April 1996 Satyam Spark Solutions set up.
April 1996 Satyam Enterprise Solutions comes into being.
December 1995 Satyam Infoway incorporated.
November 1995 Satyam Renaissance founded.
July 1995 Rights Issue offered.
March 1995 Awarded ISO 9001 Certification.
July 1993 Joint Venture with Dun & Bradstreet.

February 9, 2004 Satyam opens new development center in Mississauga, Canada
January 30, 2004 Satyam Computers plans to set up base in Kolkata
Satyam awarded IBM Lotus Award in Knowledge & Content
December 23, 2003 Management Solutions category in the 10th Annual IBM Lotus
Awards
The Chairman of Satyam, Mr. B Ramalinga Raju given the
November 13, 2003
closing bell honor at the New York Stock Exchange
May 13, 2003 Satyam's first customer summit a big success
Satyam and Microsoft sign MOU to provide world-class IT
April 28, 2003
outsourcing services to Asia-Pacific region
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Indian Software Giant Satyam Computer Services Launches

April 28, 2003
Global Solutions Centre in Malaysia
Satyam partners Hummingbird to set up South Asia's first
April 04, 2003
Hummingbird's ETL/BI Competency Center
Satyam signs new multi-year service agreements with TRW
March 17, 2003
Automotive and Northrop Grumman
Satyam announces business continuity center in Singapore, the
February 27, 2003
first of its kind outside India
Satyam stated as " Top choice for SAP support" by Giga
December 30, 2002
Research group
Satyam ranked 3rd in top 10 US revenue growth for software
November 19, 2002
maintenance & support provider by Gartner Inc.
Satyam Computer Services and PeopleSoft India form

October 28, 2002
Strategic Alliance
AP Chief Minister inaugurates Nipuna's BPO facility at
October 17, 2002
Hyderabad
October 11, 2002 B. Ramalinga Raju, wins Corporate Citizen of the Year Award
Satyam to Provide Extended Support Services to Inktomi
October 11, 2002
Content Networking Customers
Satyam's Support To World Bank Intranet Wins World-Wide
October 09, 2002
Recognition
Satyam Computer Services Announces Support For Microsoft
October 08, 2002
Solution for UNIX Migration
SOFTBANK ASIA INFRASTRUCTURE FUND and
October 04, 2002
VentureTech to invest $20 Million in Sify
Satyam wins Golden Peacock Award for Excellence in
September 27, 2002
Corporate Governance
September 25, 2002 Satyam and Commerce One Establish Strategic Partnership
Satyam's IT Offshore Service Delivery Program Cited as
September 05, 2002
'Industry Best Practice' by Aberdeen Group Report
Satyam and ETI Establish Strategic Alliance to Provide
September 04, 2002
Data Integration Services to Fortune 500 Customers
Satyam campus at Hyderabad welcomes Intel CEO Craig
August 30, 2002
Barrett
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August 26, 2002 Satyam and Iona enter into strategic partnership
August 08, 2002 Satyam Signs Agreement with Saint-Gobain Abrasives
Healthaxis and Satyam Team to Deliver Web-enabled Benefits
May 31, 2002 Administration System for Washington State Health Care
Authority
Satyam nominated for eOscar 2002 in the Best B2B solutions
March 28, 2002
category
Satyam is first company to implement Oracle CRM
March 22, 2002
Applications in Thailand
Satyam gets certified under BS 7799 International Information
March 20, 2002
Security Standards
February 20, 2002 Satyam and Hummingbird Announce Global Strategic Alliance
January 29, 2002 Indian Software Leader Satyam Launches Operation in China.
Satyam wins the IMC Ramkrishna Bajaj National Quality
December 13, 2001
Award Trophy.
November 22, 2001 Satyam announces IT Services Partnership with CSC
Satyam and Carnegie Mellon launch world's first IT- enabled
November 20, 2001
Services Quality Model
November 1, 2001 Satyam opens Offsite Development Center in Sydney.
October 30, 2001 Satyam Europe wins software contract from Reuters.
Satyam Allies Itself with New Services Company Focused on
October 29, 2001 XML-based Communities for Healthcare: MedBiquitous
Services.
Satyam launches State-of-Art Solutions to Enhance Mobile
October 5, 2001 Connectivity using the Microsoft Windows-Powered Pocket
PC 2002.
Satyam declared a finalist in Microsoft MEC Awards 2001 for
October 3, 2001
innovative business solutions.
May 15, 2001 Satyam listed on New York Stock Exchange.
Satyam bags Frost & Sullivan Award for Competitive Strategy
April 20, 2001
in ASP.
April 16, 2001 Satyam sets up Asia-Pac Headquarters at Singapore.
Satyam's Middle East Solutions Center inaugurated at Dubai
April 3, 2001
Internet City.
March 29, 2001 Satyam and Ford sign MoU for Software Services.
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Review 200 Survey rates Satyam one of the 10 Most Well-

March 22, 2001
Regarded Companies in India.
Satyam becomes first ISO 9001:2000 Company in the world as
March 22, 2001
certified by BVQI.
Satyam Europe Launches Enterprise Application Integration
February 12, 2001
(EAI) Initiative.
January 20, 2001 Satyam, i2 Technologies announce partnership.
Satyam and CCMB partner for global foray into
January 20, 2001
Bioinformatics.
Satyam Chairman Ramalinga Raju named "IT Man of the
December 22, 2000
Year" by Dataquest.
December 20, 2000 Satyam TRW JV awarded $ 200 m contract from TRW.
November 22, 2000 Satyam, Ariba forge alliance.
November 22, 2000 Satyam Quality head wins Qimpro award.
Satyam receives National HRD Award from Government of
August 19, 2000
India.
SatyamWorld, Satyam's Organization-wide Intranet, bags CIO
July 1, 2000
Magazine's World's Best 50/50 Intranet SIT & ITES award.
Satyam establishes dedicated Offshore Development Center
July 1, 2000
for the Emirates Group.
Satyam, TRW form strategic alliance to service the
June 8, 2000
Automobile Sector.
Satyam, Microsoft join hands to speed Web/E-Commerce
June 7, 2000
Applications.
Satyam and Exterprise, USA, form global alliance to speed
June 5, 2000
deployment of software solutions for Net Market Makers.
Satyam forms Joint Venture with Computer Associates to
May 15, 2000
enable SMEs.
Satyam becomes the first organization in the world to launch
May 8, 2000
Customer-Oriented Global Organization training.
Satyam Subsidiary VisionCompass, Inc. globally launches
March 29 ,2000
VisionCompass software.
Satyam Chairman B. Ramalinga Raju invited to share the dais
March 24, 2000 with US President William Jefferson Clinton at a CII Function
at HiTec City, Hyderabad.
February 10, 2000 Satyam-GE receives ISO 9001 Certification within one year of
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operations.
Satyam declared one of '100 Most Pioneering Technology
February 2, 2000
Companies' by World Economic Forum, Davos.
Satyam's Joint Venture with Venture Engineering Services Ltd.
January 2000
goes on stream.
Satyam Infoway crosses the one-hundred thousandth customer
November 20, 1999
mark for ISP services.
Satyam Infoway becomes the first Indian Internet company to
October 19, 1999
be listed on NASDAQ.
Satyam Chairman B. Ramalinga Raju receives Ernst & Young
September 17, 1999
Entrepreneurship (Services) Award.
Satyam Spark Solutions Ltd., Satyam Enterprise Solutions Ltd.
August 1999 and Satyam Renaissance Ltd. formally merged with Satyam
Computer Services Ltd.
Satyam launches Dr. Millennium, the most comprehensive
June 11, 1999
solution for Y2K problems.
March 19, 1999 Satyam assessed at SEI CMM® Level 5.
Milestones: 2005 - Till date

Satyam acquired 100% stake in Singapore based Knowledge
July 21, 2005 Dynamics, a leading Data Warehousing and Business
Intelligence solutions provider
Satyam acquired 75% stake in London based Citisoft Plc, a
highly specialized business and systems consulting firm,
April 21, 2005 focused exclusively on the Investment Management industry.
The balance 25% stake will be acquired partly in April 2007
and the balance in April 2008
FACTS
• Commitment to transform lives with IT
• Social outreach program Satyam Foundation launched in October 2000
• Voluntary effort of Satyam Associates for Social Responsibility
• Preferred SAP Partner with one of the most mature practices in the world
• Backed by deep domain expertise, rich experience, a comprehensive portfolio
& strong SAP alliance
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• Significant investments in the latest technologies

• Over 599* global companies, including 173* Fortune 500 corporations
• Alliances with over 90* business and technology leaders
• Presence in 90* countries across six continents
• Strategic alliances with over 80 leading technology vendors & System integrators
• Presence in 57* countries across six continents
• Satyam globally certified to ISO 27001, ISO 20000 and ISO 9001 standards
• Satyam is a CMMI Level 5 company
• Satyam simulated a first-of-its-kind, cross-border country outage and business
continuity operation in Singapore
GLOBALISATION
• Globalisation is the removal of barriers of all kinds to the flow of trade. It is about
the best offerings of enterprises being made available to the rest of the world
rather than being confined to a region or geography.
• The impact of globalisation would be a reduction in the number of players for any
kind of value-creation activity. Only those providing the best value to customers
will survive.
• Satyam delivering services to a large number of companies who also want to
establish their operations in India. If Satyam define their future relationship with
them, Satyam priorities would be to expand Satyam’s global operations.
• Most of Satyam revenue today comes from global operations. satyam would like
to continue that by offering cost-effective and high-quality integrated services.
• As nearly 98 percent of revenues come from worldwide operations, Satyam have
had to compete with them to get this business.
• Satyam is one of the pioneers of the virtual delivery of services. This is a new
learning that the larger global companies have to adapt.
• The other competency Satyam have built up over the years is flexibility to adapt
to a fast-changing business environment. In the process, They have an
organisational structure that is entrepreneurial and relatively flat and that allows
for faster decision making..
BENEFITS OF GLOBALISATION
• In the beginning of the last century, world GDP was something like $1.5 trillion.
That grew to about 32 or 33 trillion dollars towards the end of the century. This
was driven by the inventions and innovations of the industrial era.
• Apart from IT, biotechnology and nanotechnology will be contributing in large
measure to making the world a better and a wealthier place.
• Increased wealth and sharing of technology, knowledge and best practices across
geographical boundaries will allow us to address the issue of global poverty.
Technology will help bring more people into the mainstream of the economy.
That in turn will help companies expand and grow their markets.
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• The biggest beneficiaries of technology breakthroughs in a globalised world are

the developing nations. These nations are witnessing impressive growth that was
hitherto thought to be impossible.
• The developed nations created the mobile phone, which was commoditised in
India and China, ushering in an exciting growth phase. We had earlier thought
that it would take decades to drive out illiteracy from our villages.
• Satyam’s own experiment in using information technology to spread literacy in
about 150 of its adopted villages has shown that it can be achieved in a few
years.These villages will be fully literate by the middle of 2006.
Challenges related to recruiting facing fresh talent

• Satyam is constantly looking at leveraging global advantages in talent and
technology. India may not be good at everything, so they tap talent and
technology wherever they are available around the world.
• Satyam workforce today has more people from different parts of the globe than
ever before. The past hierarchical structures are not able to cope with our global
growth ambitions, so newer structures with more-empowered people at all levels
are coming into play.
• Their leadership today is distributed all over the globe, and decision making is
faster to help the organisation respond quickly to changes in the environment they
operate in. They also see mergers and acquisitions as an integral part of our global
growth strategy.
• Indian software major Satyam Computer Services reported a net profit of Rs. 394
crores in the Q4, 2007 quarter ended March 2007 compared to Rs. 337 crores in
the previous quarter (Q3, 2007) ended December 2006. This implies a sequential
growth of almost 17%, despite the rupee appreciation and the hedging cost.
Satyam Computers revenues increased by over 7% to Rs. 1779 crores from Rs
1,661.12 crores.
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400
390
380
370
360
350
Net Profit, In Crore
340
330
320
310
300
Q3, 07 Q4, 07
250
200
150
Net Income(in $)
100
50
0
2002 2003 2004 2005 2006
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1200
1000
800
600 Total Asset( in US$

million)
400
200
0
2002 2003 2004 2005 2006
PROBLEMS IN RETAINING THE TALENT
• The supply-demand issue will pose a major challenge for the industry, particularly
for experienced professionals.
• Retaining the best talent will also be equally important. We can’t retain
professionals only by paying higher salaries and offering attractive perks; that is
the not the best way. We need to create enthusiasm in their role, their work and
the organisation. Satyam focusses on internal and external training programmes
• On periodical basis; there is also job rotation. Every 18-24 months, professionals
are placed on different processes of their choice.
EFFECT OF GLOBALISATION
1. The current economic environment, pricing pressure and rising wages

in India have negatively impacted our revenues and operating results.
Spending on IT in most parts of the world has recently increased after a two-year
decreasing trend due to a challenging global economic environment.
2. Our business will suffer if we fail to anticipate and develop new
services and enhance existing services in order to keep pace with rapid changes
in technology and the industries on which we focus.
Our future success will depend on our ability to anticipate these advances and
develop new product and service offerings to meet customer needs and complement
our offerings of end-to-end IT services
3. Our revenues are highly dependent on customers primarily located in
the United States and customers concentrated in certain industries, and
economic slowdowns or factors that affect the economic health of the United
States and our customers’ industries may affect our business.
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In fiscal 2006, 2005 and 2004, approximately 64.9%, 68.3% and 73.3%,
respectively, of our total revenues were derived from the United States.
74%
72%
70%
68%
Revenue derived
66% from US
64%
62%
60%
2004 2005 2006
For the same periods, we earned 28.6%, 29.2% and 32.0% of our IT revenues from the
manufacturing industry and 18.5%, 17.8% and 18.3%, of our IT revenues from the
banking and finance industry respectively.
35%
30%
25% Revenue from
20% Manufacturing
sector
15% Revenue from
10% Banking& fin
sector
5%
0%
2004 2005 2006
4. We face intense competition in the IT services and BPO markets

which could prevent us from attracting and retaining customers and could
reduce our revenues. We face competition in India and elsewhere from a number
of companies, including:
• Consulting firms such as Accenture, BearingPoint, Capgemini and
Deloitte Consulting;
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• Divisions of large multinational technology firms such as Hewlett-Packard

and IBM;
• IT outsourcing firms such as Computer Sciences Corporation, Electronic
Data Systems and IBM Global Services; and
• Offshore IT services firms such as Infosys Technologies Limited, Tata
Consultancy Services Limited and Wipro Limited
5. Our revenues are highly dependent upon a small number of customers.
We derive a significant portion of our revenues from a limited number of corporate
customers. In fiscal 2006, 2005 and 2004, our largest customer together with its
affiliates, accounted for 8.8%, 10.8% and 14.3%, respectively, of our total revenues.
In fiscal 2006, 2005 and 2004, our second largest customer accounted for 5.1%,
7.4% and 9.9%, respectively, of our total revenues. In fiscal 2006, 2005 and 2004,
our five largest customers accounted for 24.2%, 29.2% and 36.4%
6. Our fixed-price contracts expose us to additional risks, many of which
are beyond our control, which may reduce the profitability of these contracts.
7. Our customers may terminate projects before completion or choose
not to renew contracts, many of which are terminable at will, which could
adversely affect our profitability.
8. A number of our customer contracts are conditioned upon our
performance, which, if unsatisfactory, could result in less revenues than
previously anticipated.
9. We dedicate significant resources to develop international operations
which may be more difficult to manage and operate.
we have established IT centers in Australia, Canada, China, Hungary, Japan,
Malaysia, Singapore, United Arab Emirates, United Kingdom and United States and
plan to open additional international facilities. Because of our limited experience in
managing and operating facilities outside of India, we are subject to additional risks
related to our international expansion strategy, including risks related to complying
with a wide variety of national and local laws, restrictions on the import and export
of certain technologies and multiple and possibly overlapping tax structures.
10. Restrictions on immigration may affect our ability to compete for and
provide services to customers in the United States and in other countries,
which could hamper our growth and cause our revenues to decline.
The vast majority of our employees are Indian nationals. The ability of our
associates to work in the United States, Europe and in other countries outside India
depends on the ability to obtain the necessary visas and work permits
11. Compliance with new and changing corporate governance and public
disclosure requirements adds uncertainty to our compliance policies and
increases our costs of compliance.
Changing laws, regulations and standards relating to accounting, corporate
governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new
U.S. Securities and Exchange Commission, or SEC, regulations, the NYSE, rules,
Securities and Exchange Board of India, or SEBI, rules, and Indian stock market
listing regulations are creating uncertainty for companies like ours.
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12. As a foreign private issuer, we are subject to different U.S. securities

laws and rules than a domestic issuer, which may, among other things, limit
the information available to holders of our securities.
As a foreign private issuer, we are subject to requirements under the Securities Act
of 1933, as amended, or Securities Act, and the Securities Exchange Act of 1934, as
amended, or Exchange Act, which are different from the requirements applicable to
domestic U.S. issuers.
13. Regional conflicts or natural disasters in South Asia and elsewhere
could adversely affect the Indian economy, disrupt our operations and cause
our business to suffer.
South Asia has from time to time experienced instances of civil unrest and
hostilities among neighboring countries, including between India and Pakistan.
14. Political instability could seriously harm business and economic
conditions in India generally and our business in particular.
During the past decade, the Government of India has pursued policies of economic
liberalization, including significantly relaxing restrictions on the private sector.
Nevertheless, the role of the Indian central and state governments in the Indian
economy as producers, consumers and regulators has remained significant.
15. Currency exchange rate fluctuations may affect the value of our ADSs
and our financial condition.
Our functional currency is the Indian rupee, although we transact a major portion of
our business in U.S. dollars and several other currencies and accordingly face
foreign currency exposure through our sales in the United States and elsewhere and
purchases from overseas suppliers in U.S. dollars and other currencies.
Accordingly, changes in exchange rates may have a material adverse effect on our
revenues, other income, cost of services sold, gross margin and net income, which
may in turn have a negative impact on our business, operating results and financial
condition.
16. Our ability to acquire companies organized outside India as part of
our growth strategy depends on the approval of the Government of India
and/or the RBI and failure to obtain this approval could negatively impact our
business.
CUSTOMERS
Satyam market their services primarily to companies in the North America, Europe,
the Middle East and the Asia-Pacific region. They have a global customer base which, as
of March 31, 2006, consisted of 506 customers including 156 Fortune Global 500 and
Fortune U.S. 500 companies.
The strength of their relationships has resulted in significant recurring revenue from
existing customers. Their business from existing customers in fiscal 2006, 2005 and 2004
accounted for 90.6%, 92.1% and 90.7% of IT services revenues, respectively. In fiscal
2006, 2005 and 2004, their largest customer, together with its affiliates, accounted for
8.8%, 10.8% and 14.3%, respectively, of our total revenues. In fiscal 2006, 2005 and
2004, their second largest customer accounted for 5.1%, 7.4% and 9.9% respectively, of
our total revenues. Their top five customers accounted for 24.2%, 29.2% and 36.5% of
our total revenues in fiscal 2006, 2005 and 2004 respectively.
IIPM 94
93%
92%
92%
91% Revenue from

existing customer
91%
90%
90%
2006 2005 2004
16%
14%
12%
10%
8% Revenue from largest
6% customer
4%
2%
0%
2006 2005 2004
The following is a distribution of our IT revenues across our industry segments for the
three most recent fiscal years:
35%
30%
25%
20% 2006
15% 2005
10% 2004
5%
0%
Manufact. Banking Insur. MES Healthcr Transp Others
IIPM 95
Revenues
They generate revenues through fees for professional services rendered in our two
segments, namely, IT services and BPO services.
The following table sets forth the total revenues (excluding inter-segment revenues)
for our business segments for fiscal 2006, 2005 and 2004:
Graph
1200
1000
2004(In US$
800 Million)
600 2005(In US$
Million)
400
2006(In US$
200 Million)
0
Services BPO
Revenues based on customer location

They have experienced increasing volumes of business from customers located in
North America and Europe, attributable to both new customers and additional business
from existing customers. We expect that most of our revenues will be generated in North
America followed by Europe in fiscal 2007.
The following table gives the composition of our IT services revenues (excluding
inter-segment revenues) based on the location of our customers for the years indicated:
IIPM 96
700
600
500
400
2004(In US$MILLION
300
2005(In US$Million
200 2006(In US$ Million)
100
0
North Europe Japan India Rest Of
America World
Satyam Competitive Strengths
They believe that we are strongly placed to consolidate our market position as a leading
IT service provider due to our competitive strengths which include:
1. Comprehensive range of services combined with specialized industry expertise.

Their comprehensive range of end-to-end technology-based services encompasses
application development and maintenance services, consulting and enterprise business
solutions, extended engineering solutions, infrastructure management services and BPO
services. Their comprehensive range of services enables us to broaden our dialogue with
potential customers, deepen our relationships with existing customers and diversify our
revenue base. Their services are built on a foundation of a rich understanding of the
industries in which our customers operate and the underlying technologies that drive
those industries. Their industry- focused business units such as manufacturing, banking
and financial services, insurance, TIMES, healthcare, retail and transportation, allow us
to understand the strategic issues facing our customers.
2. Flexible, highly evolved delivery model. They provide our services through 20
centers located in Australia, Canada, China, Hungary, India, Japan, Malaysia, Singapore,
United Arab Emirates, United Kingdom and United States and our onsite teams operating
at our customers’ premises. Over the past decade, we have made substantial investments
in our infrastructure, processes and systems allowing us to evolve our global delivery
model to effectively integrate offshore, offsite, nearshore and onsite services and perform
a greater volume of work at our offshore development centers.
3. Established leadership position in consulting and enterprise business solutions.
Their solutions are enhanced by our strategic alliances with more than 60 leading
technology providers such as SAP and Oracle. Over the past few years, they have made
strategic investments to augment our capabilities in this area which is reflected in the
growing revenues from this business. During fiscal 2006 and fiscal 2005, 39.2% and
34.3% respectively, of our revenues, was generated from consulting and enterprise
business solutions.
IIPM 97
4. Strong relationships with blue chip customers. They have long-standing

relationships with large multinational corporations built on our successful execution of
prior engagements. They believe we have significantly more Fortune Global 500 or
Fortune U.S. 500 corporations as customers, relative to scale of revenue, as compared to
other leading Indian IT services companies. As of March 31, 2006, 156 of their 506
customers were Fortune Global 500 or Fortune U.S. 500 corporations. We have a history
of high customer retention and derive a significant proportion of our revenue from repeat
business. During fiscal 2006 and fiscal 2005, 90.6% and 92.1% respectively, of their
revenues, was generated from existing customers.
5. Track record of high quality execution. They are committed to achieving operational
excellence in our processes, people and infrastructure. Their quality assurance programs
form an integral part of our project management methodology and seek to ensure that we
consistently deliver high quality services to our customers. For instance, They have a
company-wide quality management system, which satisfies the ISO 9001:2000 TickIT
standard. They have been assessed at CMMI Level 5, the highest level possible, and have
implemented the Six Sigma processes for application development and maintenance.
They have also achieved domain specific certifications like AS9100/EN9100 for ES
group – Aerospace domain, PCMM Level 5 Assessment for Pune Location,
S15000/ISO20000 certification for N&S across India and BS15000 Global Certification
for IMS business.
6. Culture of innovation. They have a history of innovation that is facilitated by our

entrepreneurial culture and our management’s willingness to make strategic investments
in growth markets. They believe we were one of the pioneers in the delivery of India-
based IT services. Our technology laboratories continue to develop and bring to market
new solutions based on new technologies. For instance, they are one of the few
companies in India to offer utility and grid computing services to customers.
Growth Strategy of Satyam Computers
Satyam goal is to be a leading global provider of comprehensive IT solutions and

services. They intend to accomplish our goal by:
1. Building on our long-standing customer relationships to cross-sell our

comprehensive range of services. Satyam goal is to build long-term sustainable
business relationships with our customers to generate consistent revenues.
2. Continuing to focus on enterprise-wide business solutions and high quality
value-added services. To better serve our customers in key industry segments,
Satyam intend to continue to focus on providing end-to-end enterprise-wide
business solutions and increasing our share of value-added services, such as data
warehousing and business intelligence, application portfolio management, process
and quality consulting, business performance management, industry and
regulatory specific solutions and grid computing solutions.
3. Expanding our presence in existing markets and penetrating new geographic
markets. Satyam plan to expand their presence in our existing markets and
establish a presence in new geographic markets throughout North America,
IIPM 98
Europe, Latin America, and the Asia-Pacific region. They intend to accomplish
this by increasing our brand visibility and leveraging our global development
centers to extend our services to customers located in these geographies. They
also plan to continue to hire local associates to staff and manage our global
development centers and to strengthen our sales and marketing functions to
facilitate building strong relationships
4. Continuing to enhance our industry expertise. Satyam aim to have an in-depth
understanding of targeted industries including manufacturing, banking and
financial services, insurance, TIMES, healthcare, retail and transportation, which
will help them identify and understand customer needs and proactively design and
offer customized IT solutions to address those needs.
5. Attracting and retaining quality technical associates and augmenting their
training. To attract, retain and motivate our technical associates, Satyam plan to
continue to provide an environment that rewards entrepreneurial initiative and
performance, including competitive salaries and benefits as well as performance-
linked incentives.
6. Enhancing their capabilities through technology alliances and acquisitions.
Satyam intend to continue to explore the formation of new alliances as well as
strengthen existing partnerships with key technology vendors to enable us to
leverage our partners’ strengths. They will also consider acquisitions to gain
access to specific technologies and exploit synergies with our existing business.
Sales and Marketing

Our sales operations comprise a Sales team, Account management team, Pre-Sales
support team, and our Strategic Deals Group. Sales associates work solely on acquiring
new customers. The second group consists of relationship managers who cross-sell
services to existing customers and are responsible for building long-term relationships
with such customers. The Pre-Sales group supports the business development efforts for
prospects and existing accounts. Satyam has also invested in a strategic deals group,
which focuses on acquiring large strategic deals.
Government Regulation
Regulation of business by the Indian government affects Satyam business in several
ways.
• Satyam benefit from certain tax incentives promulgated by the Government of
India, including a ten-year tax holiday from Indian corporate income taxes for the
operation of most of their Indian facilities and a partial taxable income deduction
for profits derived from exported IT services under Indian tax laws.
• As a result of these incentives, their operations have been subject to relatively
insignificant Indian tax liabilities.
• Satyam have also benefited from the liberalization and deregulation of the Indian
economy by the successive Indian governments since 1991.
• Further, there are restrictive parts of Indian law that effect their business,
including the fact that they are generally required to obtain approval from the
Reserve Bank of India and/or the Ministry of Finance of the Government of India
to acquire companies organized outside India, and they are generally required,
IIPM 99
subject to some exceptions, to obtain approval from relevant government

authorities in India in order to raise capital outside India.
• Finally, the conversion of their equity shares into ADSs is governed by guidelines
issued by the Reserve Bank of India.
RECOMMENDATION
1. Government should emphasize more on set up of SEZ for IT & ITES sector
IIPM 100
2. Level of education should be improved for IT & ITES sectors because most of the
employees are just 12th pass; at least minimum qualification should be
graduation.
3. IT education should be mandatory for all Government and private organization

and for this special training should be conducted to aware them about IT.
4. More emphasis is given on export of IT products & services so that more revenue
should be generated.
5. Government should give tax benefit for establishing new IT Company.
6. Working hour should be more flexible and timing should be such that female
employees feel comfortable.
7. Due to globalization more new companies are coming in India, so government

should keep watch on them that they should not exploit their employees and give
better salary and other benefits.
8. In case merger and acquisition it should be always keep in mind that Indian
company should acquire foreign companies not acquire by foreign companies.
9. Female employees should provide better facility and no night shift for them.
10. IT should be used in each and every field like agriculture and other allied services
and in government organization so that people get information on time for their
business.
11. Due to globalization latest technology are used in IT & ITES sector for this more
qualified people are required, so more emphasis is given on technical education.
12. Mostly IT companies are located in metros and big cities so people of small cities
are unaware of IT. To aware those about IT companies should open their branch
in small cities also.
13. Overtime should be provided to employees.
14. Labor law and union should be implemented in IT & ITES sector also.
IIPM 101
15. Sexual harassment and molestation of female employee should and controlled and
strict punishment should be given to culprits
16. Government should provide more infrastructure to these IT companies like land,
power, road and tax benefit so that they can set up their business easily.
17. New entrant should employ more and more Indian people so that unemployment
can be reduced.
BIBLIOGRAPHY
IIPM 102
i) www.tn.gov.in
ii) www.gelnet.com
iii) www.sciencedirect.com
iv) www.hindu.com
v) www.consultoras.org
vi) www.indiasource.org
vii) www.flonnet.com
viii) www.india.gov.in
ix) www.expressitpeople.com
x) www.hinduonnet.com
xi) www.webmsi.free.com
xii) www.ibef.org
xiii) www.cmie.com
xiv) www.indlawnews.com
xv) www.indianbusiness.nic
xvi) www.satyam.com
xvii) www.businessworld.com
xviii) www.bullishindia.com
xix) www.seas.upenn.edu
MAGAZINES
1. Business & economy
2. Rotman Magzine
3. Price water house cooper
Newspaper
1. The Times of India
2. Hindu
3. Economics times
4. Hindu business line
QUESTIONNAIRE
IIPM 103
1. What is your rating about working environment?
 Excellent
 Very good
 Good
 Satisfactory
 poor
2. Are you satisfied with salary structure?
 Very less
 Less
 Satisfied
 Very satisfied
 Extremely satisfied
4. Are women suitable for night job
 25% - Yes
 67% - No
 Rest – Can’t say
5. Are employees are qualified or under qualified for job
 55%- Yes
 35% - No
 Rest – Can’t say
6. Level of education in IT & ITES sector
IIPM 104
 Very High
 High
 Medium
 Low
 Very Low
7. Government support to IT & ITES sector
 Very High
 High
 Medium
 Low
 Very Low
8. Impact on health in night shift
 Good
 Average
 Bad
 Very bad
9. Number of Female of candidate
 40%
10. Average age group
 18-25 years – 40%

 25-40 years – 35%
 Above 40 years- 25%
IIPM 105
11. At what level customers are satisfied
 Very much satisfied
 Satisfied
 Less satisfied
 Not satisfied
12. Is IT & ITES sector has positive effect on economy
 60%- Yes
 30%- No
 Rest- Can’t say
13. Are employees are satisfied with benefits which companies provided
 Very less
 Less
 Satisfied
 Very satisfied
 Extremely satisfied

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IIPM 1

INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

MR. Sushant Kisore

SUBMITTED BY: SUBMITTED TO:

CERTIFICATE OF THE GUIDE

Desired area of Research :-

Problem Definition/Hypothesis/Research Objective:-

Introduction to the area of Research :-

.Scope of thesis work:-

Justification for choosing the Research Proposal:-

Details of External Guide :-

Computers as a example and discuss about company background, merger and

acquisitions and effect of globalization on Sataym Computers.

TITLE PAGE NO.

3. MAJOR SEGMENTS OF IT & ITES 15

6. CURRENT AND PROJECTED MARKET SHARE 22

7. GLOBALIZATION AND ITS EFFECT ON IT EDUCATION 27

8. ROLE OF IT ON INDIAN ECONOMY 32

9. IMPACT OF BUDGET ON IT & ITES 34

10. GOVERNMENT INITIATIVES 35

11. ADVANTAGE OF IT IN INDIA 41

12. TRENDS IN IT INDUSTRY 42

13. FDI POLICY AND FOREIGN TRADE POLICY 46

14. MERGER AND AQUISITION 48

11. CHALLENGES IN IT & ITES SECTOR 53

13. NEGATIVE EFFECT OF IT & ITES SECTOR 59

14. NEED FOR UNIONISATION 62

15. THREADS TO IT & ITES SECTOR 64

16. SATYAM COMPUTRES 66

18. BIBLIOGRAPHY 100

19. ANNEXURE- QUESTIONNAIRE 101

• To study the IT & ITES sector and its application

• To study current and expected market share of IT & ITES sector

• To analyze the effect of Globalization on IT & ITES Sector

• To analyze the changes required in education system India

In questionnaire I asked question to different employee through mail, consist of

IT Services are broadly defined as systems integration, processing services, Information

IT & ITES Spectrum in India

3. BACK OFFICE OPERATIONS

4. INSURANCE CLAIM PROCESSING

6. DIGITAL CONTENT DEVELOPMENT/ANIMATION

 Major Segments of IT Enabled Services

Following is a fairly detailed generic classification of IT & ITESwhich

IT & ITES DRIVES REAL ESTATE

BPO- BUSINESS PROCESS OUTSOURCING

Major Areas of BPO Sector-

GOVERNMENT SUPPORTS TO THE BPO SECTOR IN INDIA –

Government of India has introduced various policy concessions and initiatives to

1. In May 2002, the Government of India has accepted the recommendations of

CONTRIBUTION OF BPO TO THE NATIONAL ECONOMY

BPO and the Indian economy

Mergers & Acquisitions in the BPO Sector

INDIAN IT & ITES-BPO INDUSTRY : NASSCOM ANALYSIS

The Indian IT & ITES-BPO Scenario

Employees IT & ITES-BPO (in ‘000)

Key drivers of the Indian IT & ITES BPO Industry include:

CURRENT AND PROJECTED MARKETS

SERVICES Year 1998 Year 2008