Market Vista™: Q2 2016
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Market Vista™: Q2 2016 April-June 2016 Copyright © 2016 Everest Global, Inc. We encourage you to share these materials internally within your company and its affiliates. In accordance with the license granted, however, sharing these materials outside of your organization in any form—electronic, written, or verbal—is prohibited unless you obtain the express, prior, and written consent of Everest Global, Inc. It is your organization’s responsibility to maintain the confidentiality of these materials in accordance with your license of them. EGR-2016-8-R-1857 Our research offerings for global services Market Vista™ Global services tracking across functions, sourcing models, locations, and service Custom research capabilities providers – industry tracking reports also available Benchmarking | Pricing, delivery model, skill portfolio BFSI1 Information Technology PricePoint™ Peer analysis | Scope, sourcing models, BFSI1 Business Process Finance & Accounting locations Healthcare & Life Sciences ITS Procurement Locations | Cost, skills, sustainability, portfolio – plus a tracking tool Healthcare & Life Sciences BPS Human Resources Tracking services | Service providers, Application & Digital Recruitment & Talent Acquisition locations, risk Cloud & Infrastructure Contact Center Other | Market intelligence, service Global Sourcing Service Optimization Technologies provider capabilities, technologies, contract assessment Locations Insider™ Transaction Intelligence Subscription information This report is included in the following subscription(s) – Market Vista™ Corporate Headquarters Office: +1-214-451-3000 In addition to published research, a subscription may include analyst inquiry, data cuts, [email protected] and other services European Headquarters Office: +44-207-129-1318 If you want to learn whether your organization has a subscription agreement or [email protected] request information on pricing and subscription options, please contact us 1 Banking, financial services, and insurance Copyright © 2016, Everest Global, Inc. 2 EGR-2016-8-R-1857 Market Vista™ Quarterly Report to come out as two separate reports from Q2 2016 Market Vista quarterly report to come out as two separate reports – Quarterly Report (covering analysis) and Service Provider Profiles Market Vista Index service providers (covering details for Market Vista Index service providers, as indicated on the right) 4 Single report covering all analysis and service Old format provider profiles Market Vista Quarterly Report included: – Market overview – Location trends – Service providers developments1 (both 2 analysis and profiles) 3 Two separate reports – first covering analysis and New format second covering service provider profiles 5 Market Vista Quarterly Report to include: – Market overview – Location trends – Service providers developments (only analysis) Market Vista Service Provider Profile to include: – Service provider profiles1 1 Analysis and profiles included for Market Vista Index service providers as indicated on this page 2 Perot was acquired by Dell in September 2009, and was rebranded as Dell Services 3 EDS was integrated into HP, and the segment is called HP Enterprise Services (HP ES), which is now a part of Hewlett Packard Enterprise (HPE) 4 Aon acquired Hewitt in October 2010. The combined entity is now called Aon Hewitt 5 The services division of IBM is referred to as IBM Global Services (IBM GS) Copyright © 2016, Everest Global, Inc. 3 EGR-2016-8-R-1857 Service provider profiles | Table of contents Topic Page no. Service provider developments – summary 5 Accenture 7 Aon Hewitt 15 Atos 18 Capgemini 21 Cognizant 26 Computer Sciences Corporation (CSC) 30 Convergys 33 Dell Services 36 EXL 40 Genpact 42 HCL 45 HP Enterprise 48 IBM 52 Infosys 61 TCS 68 Tech Mahindra 72 Unisys 76 Wipro 80 WNS 85 Xerox Services 87 Speculation around potential acquisitions 93 Copyright © 2016, Everest Global, Inc. 4 EGR-2016-8-R-1857 Service provider developments | Summary (page 1 of 2) Some company-specific highlights during the quarter Traditional global service providers – Hewlett Packard Enterprise (HPE) announced the spin off of its Enterprise Services business and its merger with CSC for US$8.5 billion, to form a new entity by 2017. The Board of the company will be constituted by Directors, 50% of whom will be nominated by CSC and the equivalent number by HPE – Accenture enhanced its digital capability by acquiring dgroup as well as a majority stake in IMJ Corporation to expand its digital capabilities in Germany and Japan, respectively. The company also acquired OPS Rules to provide machine learning and optimization techniques in analytics to clients. During the quarter, Accenture collaborated with Apax Partners, to form a joint venture to develop claims, billing, and policy administration software for the insurance industry – In an effort to expand its traditional hardware businesses, Dell has undergone the following restructuring: Acquired EMC to focus on the data-storage hardware and data-center software from VMware, Inc. Sold off Dell Services, its IT services subsidiary, to NTT Data for US$3.06 billion Divested Dell Software, its software division, to Francisco Partners, for US$2 billion Copyright © 2016, Everest Global, Inc. 5 EGR-2016-8-R-1857 Service provider developments | Summary (page 2 of 2) Some company-specific highlights during the quarter (continued) Offshore-centric service providers – As a result of automation, cloud, and analytics, IT firms reported a decline in net additions during Q1 2016 (quarter ending March 2016). The hiring forecast for 2016-2017 is anticipated to be lower due to better employee retention and improvement in utilization and productivity, attributed to the automation initiatives of the firms In Q1 2016, Wipro’s total workforce was 172,912, with a net addition of 2,248 employees In Q1 2016, HCL Technologies’ workforce was 104,896 employees, with a net increase of 1,200 people Tech Mahindra reported a decline of 1,705 from its total headcount, with the total workforce reaching 105,432 at the end of Q1 2016 Infosys’ total workforce stood at 194,044 employees at the end of Q1 2016, with a net addition of 661 employees – Nasscom lowered its growth estimates for the Indian IT industry to 10-12% (in constant currency terms) in 2016- 2017, compared to 12.3% in 2015-2016. The slow down in the industry can be attributed to the tough economic conditions in the global markets resulting in reduced discretionary spending from the clients – Following United Kingdom’s decision to exit from the European Union, companies such as TCS, Infosys, Wipro, HCL, and Tech Mahindra lost a combined market value of US$7.33 billion TCS lost ~US$4.5 billion, followed by Infosys (US$1.8 billion), HCL Technologies (US$750 million), Wipro (~US$500 million), and Tech Mahindra (~US$500 million) Europe accounts for ~23-29% of the revenue of the Indian IT firms. In United Kingdom, TCS has an exposure of 15.8%, Infosys 6.6%, Wipro 11%, and Tech Mahindra 10.8% Copyright © 2016, Everest Global, Inc. 6 EGR-2016-8-R-1857 Q2 2016 | Key market developments Accenture (page 1 of 8) Recent transaction announcement Buyer name Announcement date TCV estimate (US$ million) Duration (years) Services 1 RCS MediaGroup April 2016 N/A N/A IO and AO The Hong Kong and China Gas Company May 2016 N/A N/A AO State of Wisconsin May 2016 N/A 1 AO EFG Eurobank Ergasias June 2016 N/A 10 AO Selective Insurance June 2016 N/A N/A AO Stryker Corporation June 2016 N/A N/A AO Location footprint Country City Month Headcount Function Other comments France Paris June N/A ITO – ADM Accenture launched an innovation center in Paris, France, to help the organizations in exploring innovative digital strategies, and create new products and services. The center will offer clients personalized services according to their business objectives Israel Herzliya June N/A R&D / Accenture launched a cybersecurity Research & Development (R&D) lab in engineering Herzliya, Israel. The center will focus on advanced threat intelligence, active defense, and industrial Internet of Thing (IoT) security using Artificial Intelligence (AI), blockchain, and advanced analytics 1 Not available Source: Everest Group (2016); company websites Copyright © 2016, Everest Global, Inc. 7 EGR-2016-8-R-1857 Q2 2016 | Key market developments Accenture (page 2 of 8) Location footprint (continued) Country City Month Headcount Function Other comments Spain Málaga June Plans to hire N/A Accenture opened a center in Málaga, Spain, to help its European clients 150 FTEs by develop digital marketing content in different formats and languages. The 2018 facility will provide digital marketing content such as banner advertisements, social media posts, and videos for marketing firms United States Nashville June 25; plans to ITO – ADM Accenture launched a technology delivery center in Nashville, United hire 225 FTEs States. The new facility will expand delivery capabilities for clients in public sector, including state and local government, as well as financial services, hospitality, and healthcare United States New York June N/A ITO – ADM Accenture launched a Content Studio in New York, United States, to create and R&D / and deliver content and explore innovations in this emerging content space. engineering The facility will focus on innovation, research, creative strategy, product development, and industry best practices Poland Warsaw May N/A N/A Accenture relocated to Grzybowska