1Q 2021 Vice President and Lead Analyst Technology & Insurance Sectors

Home , Digital China, IBM Global Services, TietoEVRY

Managed Services & As-a-Service Market Insights

7 April 2021

HOSTED BY Rishi Jhunjhunwala 1Q 2021 Vice President and Lead Analyst Technology & Insurance Sectors

IIFL Institutional Equities @ISG_News #ISGIndex #ISGIndexInsider

© 2021 Information Services Group, Inc. All Rights Reserved. Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc. Welcome The ISG Experts th Steve Kathy Hall Rudy to the 74 Quarterly Partner & Chief Data & President Analytics Officer

Stanton Dale Hearn Jones Partner, Energy Director & with Principal Robert Stapleton, Analyst Director, Energy

Covering the State of the Managed Services & As-a-Service Industry for the Global Commercial Market

@ISG_News #ISGIndex #ISGIndexInsider

Q1 Continued Growth in Global Combined Market ACV +11% Managed Services outperforms for YoY second straight quarter; As-a-Service continues double-digit growth but begins to decelerate

ACV = Annual Contract Value

Q1 Americas Demand Recovers From a Weaker 4th Quarter +6% As-a-Service solely contributed to the YoY Y/Y upside; Managed Services results declined Y/Y but did improve sequentially in a very uneven market

ACV = Annual Contract Value

Q1 EMEA Growth Healthy for Second Straight Quarter +20% Strong deal momentum in YoY Managed Services across ITO/BPO and in largest markets: UK, DACH and France

ACV = Annual Contract Value

Q1 Asia Pacific Results Mixed Growing As-a-Service contributed 85%+ to Combined Market ACV; +11% results pulled lower by sluggishness YoY in Managed Services as sizable transactions remained absent from market

ACV = Annual Contract Value

Quarterly Trends 17.1 15.4 16.4 Combined Market ACV 9.9 8.6 9.1 surpassed $17B for the first time 6.8 7.3 7.2 Managed Services registered its Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 Q1 second straight $7B+ quarter 20 20 21 20 20 21 20 20 21 Four mega-deals awarded; in line with results from the past two quarters 7.5% -2.8% 17.2% As-a-Service ACV had best 1Q21 1Q21 1Q21 TTM TTM TTM quarter yet, but Y/Y growth slowed from the 4th quarter Combined Market Managed Services As-a-Service

TTM = Trailing 12 Months ACV = Annual Contract Value

Quarterly Trends ACV $B 1Q20 1Q21 ITO ACV flat; however, ADM 7.2 activity at all-time high BPO ACV rebounded with 5.8 strength in Industry-specific 18% BPO and ER&D 1Q21 7% 0.8% YoY 1Q21 IaaS ACV surpassed $7B for 1Q21 43% YoY the first time but Y/Y growth YoY 1Q21 2.7 decelerated to 18% YoY SaaS ACV surpassed $2.5B 1.4 for the first time, and its 0.0 Y/Y growth slightly increased ITO BPO IaaS SaaS

ACV = Annual Contract Value

Key Trends ACV $B Global ACV Percent Growth IaaS Market continues to add 59% $2B to $5B of ACV per year 49% Overall, As-a-Service market 45% should exceed $10B a quarter by mid-2021 29% 5-year CAGR (ACV) for IaaS 24% exceeded 25% 21% Expect to see continued growth in 2021, though we may see slight pullback (200-300 basis $3.7 $5.3 $7.9 $10.2 $16.3 $19.8 $24.5 points) from 2020 numbers 2014 2015 2016 2017 2018 2019 2020

ACV = Annual Contract Value

9 1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider Global Service & Technology Provider Standouts THE ISG15 Our ISG Contract KnowledgeBase™ is used to determine The Big 15 placements based on the annual value of commercial contracts awarded in the past 12 months The Building 15 The Breakthrough 15 The Booming 15

@ISG_News #ISGIndex #ISGIndexInsider

1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. Managed Services Market THE Accenture HCLHCL **† ISG 15 Atos IBM Global Services Capgemini Infosys Global Market Cognizant TCS DXC Technology The Big 15 As-a-Service Market Revenues > $10B Alibaba Google Amazon Web Services Microsoft China Telecom * Salesforce

* New to leaderboard in 1Q21 • ** Promoted to the Big 15 from the Building 15 Providers in alphabetical order; no rankings implied. Revenues Our ISG Contract KnowledgeBase™ is used to determine placements based on sourced from D&B and individual company financial fillings. the annual value of commercial contracts awarded in the past 12 months

@ISG_News #ISGIndex #ISGIndexInsider

1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. 11 Managed Services Market THE Conduent * Serco * Genpact Sopra Steria ISG 15 Global Payments Tech Mahindra OptumInsight * T-Systems Global Market Orange Business Wipro Services The Building 15 As-a-Service Market Revenues $3B-$10B ServiceNow Citrix * VMware Equinix Workday

* New to leaderboard in 1Q21 Providers in alphabetical order; no rankings implied. Revenues Our ISG Contract KnowledgeBase™ is used to determine placements based on sourced from D&B and individual company financial fillings. the annual value of commercial contracts awarded in the past 12 months

@ISG_News #ISGIndex #ISGIndexInsider

1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. 12 Managed Services Market THE EPAM Systems TietoEvry ISG 15 LTI TTEC * Mindtree Unisys Global Market Mphasis As-a-Service Market The Breakthrough 15 Autodesk Rackspace Revenues $1B-$3B Digital Realty Shopify * Dropbox Twilio Palo Alto Networks UKG *

@ISG_News #ISGIndex #ISGIndexInsider

As-a-Service Market The Booming 15 Snowflake Atlassian Cyxtera * Revenues <$1B Computing * Coresite DocuSign Veeva Systems Crowdstrike OVH * Zoom Video

@ISG_News #ISGIndex #ISGIndexInsider

Quarterly Trends 8.1 8.6 7.3 Highest Combined Market 4.7 4.7 5.2 quarterly ACV, up 6% Y/Y 3.4 3.4 2.6 Managed Services rebounded Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 Q1 sequentially in what has been an 20 20 21 20 20 21 20 20 21 uneven market during the past 12 months Both IaaS and SaaS drove the 6.1% -5.4% 15.6% upside in As-a-Service market 1Q21 1Q21 1Q21 TTM TTM TTM

Combined Market Managed Services As-a-Service

TTM = Trailing 12 Months ACV = Annual Contract Value

Quarterly Trends ACV $B 1Q20 1Q21

ITO down moderately Y/Y, but 3.5 ADM activity was up BPO moved in parallel with the 5% global market with Y/Y gains and 2.5 14% 1Q21 sequential declines 1Q21 YoY -8.0% 33% YoY IaaS and SaaS both achieved all- 1Q21 1Q21 1.7 time highs in ACV; however, Y/Y YoY YoY growth for SaaS/IaaS was the lowest of all three regions 0.8

ITO BPO IaaS SaaS

ACV = Annual Contract Value

Quarterly Trends 2.8 2.6 Combined Market ACV up 11% 2.3 2.2 2.2 1.8 0.7 Y/Y, but with a pullback 0.5 0.4 sequentially Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 Q1 Sluggish results returned to 20 20 21 20 20 21 20 20 21 Managed Services sector with a sub $400M quarter As-a-Service remained above the 6.9% -26.2% 20.5% $2B level and accounted for 1Q21 1Q21 1Q21 nearly 85% of Combined Market TTM TTM TTM ACV Combined Market Managed Services As-a-Service

TTM = Trailing 12 Months ACV = Annual Contract Value

Quarterly Trends ACV $B 1Q20 1Q21 ITO fell significantly Y/Y and Q/Q 1.9 with weakness in both Infrastructure and ADM transactions 24% IaaS reached a new quarterly 1Q21 high in ACV; SaaS rebounded YoY -36% from challenging 2020 12% 1Q21 29% 1Q21 YoY 1Q21 YoY YoY 0.3 0.3 0.4 ITO BPO IaaS SaaS

ACV = Annual Contract Value

Quarterly Trends 6.3 6.0 Combined Market ACV was up 5.0 4.1 3.5 20% Y/Y but did have a slight 2.8 2.2 2.2 2.5 sequential pullback Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 Q1 Managed Services generated its 20 20 21 20 20 21 20 20 21 second straight $3B+ quarter, strength in the largest markets of UK, DACH and France 9.9% 5.0% 18.0% As-a-Service ACV rebounded 1Q21 1Q21 1Q21 from mid-2020 low points and TTM TTM TTM posted a new high, up 16% Y/Y Combined Market Managed Services As-a-Service

TTM = Trailing 12 Months ACV = Annual Contract Value

Quarterly Trends ACV $B 1Q20 1Q21 ITO ACV up 17% Y/Y as both ADM and Infrastructure posted 3.0 strong gains BPO activity rebounded from 17% 1Q21 weaker 2020 on stronger results 1.8 across most functional areas YoY 9% 66% 19% 1Q21 Both segments of As-a-Service 1Q21 1Q21 YoY reached new quarterly highs in YoY YoY ACV; SaaS Y/Y growth has 0.7 0.5 accelerated from 4Q20 while IaaS Y/Y growth has slowed ITO BPO IaaS SaaS

ACV = Annual Contract Value

Retail & Travel, Trailing 12 Business Consumer Financial Healthcare Telecom Transport Months Services Packaged Goods Energy Services & Pharma Manufacturing & Media Leisure Growth $11.8B ACV $7.9B ACV $4.1B ACV $12.6B ACV $4.9B ACV $10.4B ACV $5.3B ACV $5.5B ACV

Combined Market 13% 17% 16% 9% -20% 19% -10% 11%

Managed -3% -45% -29% Services 14% 15% .2% 23% 5%

As-a-Service 17% 19% 17% 24% 15% 14% 15% 16%

ACV = Annual Contract Value

21 1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider Trends in Energy “Pandemic and (Oil & Gas and Chemicals) post-pandemic strategic playbooks are emerging.“

Dale Hearn Robert Stapleton Partner, Energy Director, Energy

@ISG_News #ISGIndex #ISGIndexInsider

Global Technology Services Industry Award Trends

In the trailing 12 months, Energy As-a-Service segment accounts vertical has generated over for 34% of Combined Market ACV, Energy $4B in ACV awards, a five-year high up from 29% two years ago $4.1B ACV

Americas EMEA Asia Pacific ITO BPO SaaS IaaS

8% 24% 6% 24% -18% -3% 26%

Trailing 12 Months Growth

* TTM = Trailing 12 Months ACV = Annual Contract Value

Revenue Employment losses Bankruptcy and Oil demand down have stabilized after mergers/buyouts is beginning to a rough 2020 are a new norm recover in 2021

Exploration Production Transportation Refining Processing Distribution Consumer

The chemical industry continues to Move to the cloud navigate a volatile market landscape

Raw material Processing Manufacturing Distribution centers Distribution Consumer

Oil & Gas is still in survive Higher oil prices Chemical firms proving more and recovery mode at the pump . . . insulated to pandemic effects

O&G companies Global government are now shifting pressure to to the new norm “go green”

ISG is observing increased attention on

Accelerating digitalization to improve safety, cost-efficiency and sustainability.

Artificial Cyber Security Intelligence Cloud Adoption

Reducing strains in IT as much as possible.

SAP Org Change Cloud Data

Stanton Jones

Director & Principal Analyst ISG Research

@ISG_News #ISGIndex #ISGIndexInsider

What’s Important This Quarter

⬤ Atos approaches DXC ⬤ IBM bolsters managed hybrid cloud ⬤ Accenture focuses on cloud native & talent ⬤ Wipro bets big on BFSI ⬤ Hitachi targets digital engineering

What’s Important This Quarter

⬤ ServiceNow acquires Intellibot ⬤ UiPath acquires Cloud Elements ⬤ Microsoft makes Power Automate free ⬤ Automation Anywhere partners with Google

What’s Important This Quarter

⬤ Capgemini hiring 30K; Cognizant 23K ⬤ Infosys, HCL, NTT Data ramping up local hiring ⬤ Strong focus on cloud, analytics, agile skills

What’s Important This Quarter

⬤ Google winning the enterprise ⬤ Microsoft nets big wins in automotive, travel ⬤ AWS gets a new CEO; wins commitments from BMW, Ford, AMP Bank

What’s Important This Quarter

⬤ Solar Winds breach infiltrates software builds ⬤ Exchange flaw targets outdated systems ⬤ Providers not immune!

Summary Outlook Managed Services Outperforms Managed Services Forecast

⚫ 1Q21 outperformed expectations as Europe ⚫ High, sustained level of contracting in the generated its second consecutive strong quarter industry along with accelerated decision-making ⚫ ITO posted a strong sequential result, while BPO ⚫ Mega-deals could provide a boost to 5.0% recovered with strength in Industry-specific BPO ACV growth by a factor of 5%-7% during 2021e and ER&D the next two quarters

New Highs in As-a-Service ACV; but IaaS Slows As-a-Service Market Forecast

⚫ As-a-Service generated record-setting results, ⚫ IaaS providers will need to continue signing but Y/Y growth of 15% slowed from 26% growth larger transactions to build scale and ultimately last quarter help with margin upside 18% ⚫ SaaS saw accelerating growth with robust results ⚫ SaaS firms will need to strengthen their 2021e in EMEA and Asia, while IaaS saw its Y/Y growth rate land-and-expand strategies within their client cut in half footprint with a focus on underpenetrated geographies

1. Click the "Listen by Phone“ button Listen by Phone Steve Hall Kathy Rudy on your webcast screen Partner & President Chief Data & Analytics Officer +44 7384 259676 +1 972 653 2153 2. The phone number and passcode will appear, [email protected] [email protected] and the web streaming to your computer will be automatically muted

@ISG_News #ISGIndex #ISGIndexInsider

Broadcast Scheduled @ISG_Newsfor July #ISGIndex 7, #ISGIndexInsider 2021 2Q21 Mark Your ©Calendars! 2021 Information Services Group, Inc. All Rights Reserved. 4Q Global 20 ISG IndexTM The ISG Experts Want to Ask a Question?

3. After you dial in, the operator will ask you for your name and company Stanton Jones Dale Hearn 4. Now press *1 to be added to the queue Director & Principal Analyst Partner, Energy +1 281 795 2636 +1 214 476 7099 [email protected] [email protected] Sign up https://isg-one.com/isg@ISG_News- index #ISGIndex #ISGIndexInsider-insider for the © 2021 Information Services Group, Inc. All Rights Reserved. th The 74 Quarterly Thank you!

@ISG_News #ISGIndex #ISGIndexInsider

Our ISG Contract KnowledgeBase™ is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months.

The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues $1B-$3B Revenues <$1B HCL ** Accenture Amdocs IBM Global Global Payments EPAM Systems Birlasoft L&T Technology Capgemini Conduent TTEC Managed Services OptumInsight LTI Ensono Services Services Cognizant Cushman & Unisys Infosys Tech Mahindra Mindtree EXL Persistent Systems Market DXC Technology Wakefield * WEX NTT DATA Wipro Mphasis Globant Softtek * FIS Global * Genpact TCS

Adobe Systems * Autodesk Docusign Citrix Systems * Rackspace Coresite Amazon Web Services ServiceNow Digital Realty RingCentral As-a- Equinix Shopify * Crowdstrike Service Google VMware DropBox * Snowflake Market Intuit Twilio Cyxtera * Microsoft Workday Palo Alto Computing OpenText * UKG * Datadog * Salesforce Networks Zoom Video

* New to leaderboard in 1Q21 • ** Promoted to the Big 15 from the Building 15 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings.

Our ISG Contract KnowledgeBase™ is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months.

The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues $1B-$3B Revenues <$1B

DXC Technology Bechtle Serco Accenture Asseco HCL * CGI Sopra Steria Mindtree Atea ASA NNIT A/S Managed Atos Cancom * IBM Global Computacenter * Tech Mahindra Mphasis EXL SIA-SSB * Services BT EPAM Systems Services Global Payments T-Systems TietoEvry HGS WIIT S.p.A. Market Capgemini GFI * Infosys Orange Business Wipro Unisys Kapsch Group WNS Cognizant LTI TCS Services Xerox Services Webhelp *

Amazon Web Services Equinix Constellation Veeva Systems Google Atlassian As-a- ServiceNow Autodesk Software * Visma Service Microsoft Docusign United Internet * AVEVA * Digital Realty Zoom Video * Market Salesforce OVH VMware Rackspace Zscaler * SAP

* New to leaderboard in 1Q21 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings.

Our ISG Contract KnowledgeBase™ is used to determine placements based on the annual value of commercial contracts awarded in the past 12 months.

The Big 15 The Building 15 The Breakthrough 15 The Booming 15 Revenues > $10B Revenues $3B-$10B Revenues $1B-$3B Revenues <$1B Amdocs Nomura Research Accenture HCL * Canon * Institute Digital China * transcosmos Beyonsoft Empired Managed Capgemini IBM Global Genpact Serco Mphasis TTEC ChinaSoft Fuji Soft Services Services Tech Mahindra Market Cognizant Global Payments * SCSK Unisys Data#3 Relia DXC Technology TCS ITOCHU Techno- Wipro Sutherland Worldline * Datacom Taiji Computer Solutions (CTC) Xerox Services

Adobe Systems * Akamai Google Veeva Systems Alibaba Citrix Systems * Equinix Autodesk Sage Atlassian As-a- Microsoft Xero Service Amazon Web Dassault OpenText * Palo Alto Splunk * Crowdstrike Salesforce Zoho Market Services Systemes * ServiceNow Networks Twilio Kingdee Tencent Zoom Video China Telecom Rackspace *

* New to leaderboard in 1Q21 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings.

47 1Q21 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data.

isg-one.com