Q4 2020 Managing Director Cowen and Company

Managed Services & As-a-Service Market Insights

12 January 2021

HOSTED BY Bryan Bergin Q4 2020 Managing Director Cowen and Company

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© 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 Steve Kathy nd Hall Rudy to the 73 Quarterly Partner & Chief Data & President Analytics Officer

Stanton Owen Jones Wheatley Director & Partner, Principal Banking & Analyst Financial Services

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

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© 2021 Information Services Group, Inc. All Rights Reserved. ISG’s Top Findings – Q4 2020 Q4 Best Quarter Ever for Global Combined +13% Market ACV Managed Services Outperformed Expectations While As-a-Service Continues to Accelerate

ACV = Annual Contract Value 3 4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider ISG’s Top Findings – Q4 2020 Q4 Americas Up Modestly Year Over Year Strength in As-a-Service Offset +4% Weaker IT Managed Services Results

4 4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider ISG’s Top Findings – Q4 2020 Q4 EMEA Up Significantly Year Over Year Strong Deal Momentum in +18% Managed Services and Robust Demand in As-a-Service Contributed to Upside

5 4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider ISG’s Top Findings – Q4 2020 Q4 Asia Pacific Up 35% Managed Services Had Its Best Quarter of the Year While +35% As-a-Service Regained Momentum Off Mid-year Lows

ACV $B Quarterly Trends 16.0 14.6 Combined Market ACV reached 14.1

$16B, up 13%, a new high 8.0 8.8 7.0 6.6 7.2 7.2 Managed Services had a strong quarter at $7B+ Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 Q4 19 20 20 19 20 20 19 20 20 Five mega-deals awarded; best mega-deal ACV result since 1Q17 6.6% -4.0% 17.0% Manufacturing ACV reached 2020 2020 2020 nearly $2.5B in Managed Full Year Full Year Full Year Services, posted best quarter Combined Market Managed Services As-a-Service

Full Year 2020 Trends ACV $B 2019 2020 Best ACV ever for ITO, beating 24.3 previous high from 2018 21.4 BPO ACV down substantially on 22.8% weakness in Contact Centers 2020 2.1% 3.7% and Facilities Management 2020 2020 -22.9% IaaS growth accelerated on 2020 continued enterprise 8.9 penetration 5.3 SaaS ACV remained in tight range between $8B-$9B ITO BPO IaaS SaaS ACV = Annual Contract Value

8 4Q20 © 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

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4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. Managed Services Market THE Accenture ISG IBM Global Services 15 Atos Infosys Capgemini NTT Data Global Market Cognizant TCS DXC Technology The Big 15 As-a-Service Market Revenues > $10B Alibaba Microsoft Amazon Web Services Salesforce Google SAP *

* New to leaderboard in 4Q20 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

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4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. 10 Managed Services Market THE Orange Business Amdocs Services * ISG 15 FIS Global * Sopra Steria * Genpact Tech Mahindra Global Market Global Payments * T-Systems HCL Wipro The Building 15 As-a-Service Market Revenues $3B-$10B ServiceNow Adobe Systems VMware Equinix Workday

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4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. 11 Managed Services Market THE EPAM Systems Sutherland ISG 15 LTI TietoEvry Mindtree Unisys Global Market Mphasis Virtusa As-a-Service Market The Breakthrough 15 Dropbox * Revenues $1B-$3B ACI Worldwide * Palo Alto Networks Autodesk Rackspace Digital Realty Twilio *

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As-a-Service Market The Booming 15 Revenues <$1B Atlassian CyrusOne RingCentral Coresite DocuSign Veeva Systems Crowdstrike Flexential * Zoom Video

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ACV $B Quarterly Trends 8.0 Combined Market’s 4% Y/Y rise 6.9 7.2 was still its weakest quarter of 4.4 4.7 3.7 3.9 2020 3.0 2.5

Due to lack of large awards, Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 Q4 Managed Services had its 19 20 20 19 20 20 19 20 20 lightest quarter since 3Q16

IaaS drove the upside in -4.4% Combined Market; SaaS 7.9% 18.5% 2020 recovered sequentially off 2020 2020 Full Year Full Year Full Year 2Q/3Q 2020 lows

Combined Market Managed Services As-a-Service

Full Year 2020 Trends ACV $B 2019 2020 ITO weighed down by weak 4Q 12.2 performance, lightest since 2016

BPO was up 7% as F&A and 7.5% 9.2 R&D/Engineering reached 24.6% 2020 new heights 2020 -8.0% 7.4% IaaS and SaaS both achieved all- 2020 2020 5.8 time highs in ACV; Americas was only market with gains in SaaS 3.3

ITO BPO IaaS SaaS ACV = Annual Contract Value

ACV $B Quarterly Trends Combined Market ACV, up 35% 2.6 1.9 2.0 1.9 Y/Y, exceeding the previous 0.6 1.5 1.6 record from 2Q19 0.4 0.3

Managed Services ACV had its Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 Q4 best quarter of the year; ANZ 19 20 20 19 20 20 19 20 20 was highest in two years

As-a-Service rebounded to a new -26.9% record, nearly breaking $2B for 2.2% 15.6% 2020 first time 2020 2020 Full Year Full Year Full Year

Combined Market Managed Services As-a-Service

Full Year 2020 Trends ACV $B 2019 2020 ITO fell to its lowest levels 6.0 since 2016 on absence of large transactions

BPO declined 30% versus both 18.9% 2018 and 2019 2020 -25.9% Best year yet for IaaS but annual 2020 -1.6% growth rate slowed from 24% to -30.9% 2020 19% this year 1.7 2020 1.0 0.4 ITO BPO IaaS SaaS ACV = Annual Contract Value

ACV $B Quarterly Trends 6.2 Combined Market ACV broke 5.3 4.6 4.0 through $6B ceiling for first time 3.5 2.6 2.2 Managed Services generated a 1.8 2.0 $4B quarter, its first in five years; Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 Q4 DACH set a record in Managed 19 20 20 19 20 20 19 20 20 Services All five mega-deals awarded in 4Q were based in Europe 6.8% 1.7% 15.2% 2020 2020 2020 As-a-Service Y/Y growth rate of Full Year Full Year Full Year 25% was its best in two years Combined Market Managed Services As-a-Service

Full Year 2020 Trends ACV $B 2019 2020

Very strong 4th quarter boosted 10.5 ITO to third-best year, behind 2011 and 2014

BPO activity fell significantly as 20.9% largest functional areas of 2020 6.1 Contact Centers and FM faded -2.8% -50.3% Annual growth rate of IaaS 23.4% 2020 2020 nearly doubled; larger, longer- 2020 term awards gained traction in 2.2 the G-2000 1.6

ITO BPO IaaS SaaS ACV = Annual Contract Value

Retail & Travel, 2020 Business Consumer Financial Healthcare Telecom Transport YTD Services Packaged Goods Energy Services & Pharma Manufacturing & Media Leisure Growth $11.1B ACV $7.3B ACV $3.9B ACV $12.0B ACV $5.3B ACV $10.0B ACV $5.2B ACV $5.1B ACV

Combined Market 13% 11% 12% 4% -7% 22% -14% 6%

Managed -9% -3% -6% -24% -33% -5% Services 12% 33%

As-a-Service 18% 20% 13% 22% 18% 9% 14% 16%

ACV = Annual Contract Value

Global Technology Services Industry Award Trends

Heavy concentration of investment XaaS displaced traditional outsourcing Financial banks buffered impact of COVID in U.S., models; platforms & automation Services in contrast to retail banks in Europe encroached on traditional BPO deals $12B ACV

Americas EMEA Asia Pacific ITO BPO SaaS IaaS

20% -13% -1% -5% -12% 18% 25%

2020 Q4 YTD Growth

ACV = Annual Contract Value

Owen Wheatley

Lead Partner – Banking & Financial Services

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Average Bank Stock Price Global GDP US Unemployment

Equipping workers with tools, Offshore delivery centers Global banks hit hard on security, connectivity ensuring business continuity revenue and margin

Customers embrace digital The online experience Corporate real estate is critical challenged

Consumers are The average balance not switching full in a digital bank banking services account is less than to new online banking firms

Banks seek scale and cost reduction

Big Tech is encroaching on Financial Services

Consumer

Financial Concierge Banking Intermediaries Are Out of the Loop

Breakdown of centralized regulation adds banking industry complexity

Platforms, Ecosystems, Fintechs and Providers improve customer experience and speed to market

Data insights enable the banking employee to give the customer a seamless experience and deliver more revenue

Productivity is exponentially increasing.

People using automation to AI & ML identify many more Data drive improved improve customer loyalty criminal transactions productivity

Expectations & “Virtual delivery Priorities in 2021 is here to stay; digital recovery is on the way.“ Stanton Jones

Director & Principal Analyst ISG Research

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. . . but delivery expectations did not change.

Everything is virtual: ⚫ Sales and Due Diligence ⚫ Transition ⚫ Delivery

Faster, Cheaper . . . and Often Better!

Increase Stay the same Decrease

2% 6% 3% 6% 13% 25% Managed Services 28% 45% 46% Spending Flat 41%

As-a-Service 73% 66% 52% 46% 48% Spending Accelerated

Cyber Public Automation Work From Saas Security Cloud Home Source: ISG Research. ISG Advisor Client Spending Sentiment for 2021, n=75

Turbocharge Focus on Industry- Focus on Diversity & App Cyber Security Specific Customer Environmental, Modernization Solution Experience Social, Efforts Adoption Governance

The global delivery model delivered during the pandemic

A virtual sales, transition and delivery model is here to stay

As-a-Service spending increased with the top technology vendors

Managed Services spending flat; opportunity for providers that can deliver on key digital drivers

Modernization, cybersecurity, platforms, customer experience, and environmental and social good will be big in 2021

Summary Outlook Managed Services Recovering Managed Services Forecast

⚫ 2020 outperformed expectations due to several ⚫ Middle part of 2021 will experience easier large mega-deal awards late in 4Q20 comparisons ⚫ Managed Services in Europe and Americas ⚫ Assuming mega-deal flow remains consistent, 3.0% moved in opposite directions with EMEA ACV growth should be more robust 2021e finishing strong and Americas suffering from ⚫ Margin impact on large transactions will be a lack of large awards key theme

As-a-Service Up As-a-Service Market Forecast ⚫ IaaS was up nearly 20% in each of the three ⚫ As-a-Service providers will push further into regions the enterprise with long-term agreements ⚫ Americas was the only market where SaaS ⚫ Growing backlogs will provide steady stream 20% experienced gains in 2020 of revenue and enable leaders to target 2021e underpenetrated markets

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

3. After you dial in, the operator will ask you for your name and company Stanton Jones Owen Wheatley 4. Now press *1 to be added to the queue Director & Principal Analyst Partner, Banking & Financial Services +1 281 795 2636 +44 7879 414490 [email protected] [email protected]

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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 Birlasoft Accenture Global Payments IBM Global Amdocs EPAM Systems Sutherland Ensono AT&T HCL Managed Services Conduent * LTI TTEC EXL Services Atos OptumInsight Infosys FIS Global Mindtree Unisys Globant Market Capgemini Tech Mahindra NTT DATA Genpact Mphasis Virtusa L&T Technology Services * Cognizant Wipro TCS Persistent Systems

Flexential * Amazon Web Services ACI Worldwide * Palo Alto Coresite QTS As-a- Google Adobe Systems ServiceNow Allscripts Networks Crowdstrike RingCentral Service Microsoft Equinix VMware Autodesk Rackspace CyrusOne Snowflake Market Salesforce Intuit * Workday Digital Realty Twilio Docusign Computing SAP * Zoom Video

* New to leaderboard in 4Q20 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings. 43 4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider Service & Technology Provider Standouts – EMEA

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 Bechtle DXC Technology Accenture CGI * Sopra Steria Asseco Sutherland adesso HGS IBM Global Atos Tech Mahindra EPAM Systems TietoEvry Atea ASA * Kapsch Group Managed Services Global Payments* BT T-Systems LTI TTEC* Eltel Networks * NNIT A/S Services Infosys HCL Market Capgemini Wipro Mindtree Unisys EXL Tata Elxsi * NTT DATA Orange Business Cognizant Services * Xerox Services* Mphasis HH Global * WNS TCS

Amazon Web Services Autodesk As-a- Google Adobe Systems DropBox* Atlassian VMware Digital Realty Veeva Systems Service Microsoft Equinix Rackspace Docusign Workday Constellation Visma Market Salesforce ServiceNow Sage * OVH Software* SAP

* New to leaderboard in 4Q20 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings. 44 4Q20 © 2021 Information Services Group, Inc. All Rights Reserved. @ISG_News #ISGIndex #ISGIndexInsider Service & Technology Provider Standouts – Asia Pacific

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 FIS Global * Beyondsoft Accenture IBM Global Institute Sutherland Genpact Mphasis * Data#3 Managed Capgemini Services Tech Mahindra TTEC Neusoft Empired Services NEC * HCL T-Systems Market Cognizant transcosmos IT Holdings (TIS) SCSK Fuji Soft DXC Technology TCS Wipro Unisys Relia ITOCHU Techno- Xerox Services * Solutions (CTC)

Alibaba Palo Alto Atlassian MongoDB * Microsoft Akamai Amazon Web Networks Cloudera Veeva Systems As-a- Salesforce Adobe Systems Equinix Autodesk Service Services Sage Crowdstrike Xero * SAP * Citrix Systems * ServiceNow Digital Realty Market China Telecom Splunk * Docusign * Zoho * Tencent DropBox Google Twilio Kingdee Zoom Video *

* New to leaderboard in 4Q20 Providers in alphabetical order; no rankings implied. Revenues sourced from D&B and individual company financial fillings. 45 4Q20 © 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.

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