Zinnov Zones 2019 ER&D Services December 2019 Zinnov Proprietary Confidential 1 01 ER&D Services Market Overview Ø Global Corporate ER&D Spend v Z1000 R&D Spend by vertical v Overall Digital Engineering Spend 02 Zinnov Zones ER&D Service provider Ratings 2019 Zinnov Proprietary Confidential 2 Global ER&D spend is resilient and has witnessed growth despite slowdown and geo-political factors Global ER&D Spend – USD B DIGITAL ENGINEERING SPEND 2,155 GLOBALLEGACY ER&D SPEND DIGITAL ENGINEERING SPEND OVERALL ER&D SPEND 19% 1,358 53% 1141 OF ER&D SPEND 1,103 BY 2025 12% 404 204 1% 1% 2.8 X Increase in Digital Engineering spend by 2025 899 1014 954 Focus of ER&D Spenders Product Development Velocity Product Ownership Experience Alternate Revenue Streams 2013 2019 2025E Process & Quality Control Biz Model & Tech Convergence Zinnov Proprietary Confidential Source: Zinnov Z1000 database, Zinnov Research & Analysis 3 Global ER&D spend is resilient and has witnessed growth despite slowdown and geo-political factors All figures in USD B ER&D Spend (2019) 2018 2019 Y0Y 7% YoY USD 1,358 B Software & Consumer Medical Automotive Telecom Industrial Semiconductor Aerospace Internet Electronics Devices 21% 4% 196 158 162 151 9% 5% 9% 8% 80 80 10% 5% 76 76 73 70 65 71 54 57 45 48 Zinnov Proprietary Confidential Source: Zinnov Z1000 database, Zinnov Research & Analysis 4 Growth in digital engineering spend is accelerating across industries Enterprises continue to invest in digital engineering initiatives to stay relevant CAGR USD B USD 404 B 19% 1,141 Digital Engineering Spend (2019) Digital Engineering Spend (2025E) All figures in USD B 22% 527 16% 15% 16% 80 12% 10% 20% 160 60 32 33 24 24 32 13 12 11 19 11 Software & Internet Telecom Automotive Consumer Electronics Medical Devices Semiconductor Industrial Zinnov Proprietary Confidential Source: Zinnov Z1000 database, Zinnov Research & Analysis 5 Engineering is a core function in services verticals Digital Engineering Spend (All figures in USD B) DRIVING THE CORE BFSI Retail ORGANIZATION STRUCTURE 32 18% 87 19 21% 59 Created a streaming video unit in 2018 to embrace online video. Launched • Robo-Investment Advisory • Transformation of in-store ESPN Plus and Disney • Payments Tech shopping experience Plus 21% • Telematics based insurance • Connected products for • Fraud Detection Management monitoring and feedback Services-led • Customer Insights & • Omni-channel experiences Intelligence TARGETED INVESTMENTS verticals’ • Robotic automation share of 2019 Spends 11 B on tech 2025E annually and focus areas digital include AI, ML, block engineering Healthcare Payers & Providers Media & Technology chain, and big data spend by 18 19% 51 11 23% 39 2025 LEADERSHIP TO DRIVE INNOVATION • Remote patient monitoring • OTT • Diagnosis prediction • AI/ML based content Walmart appointed • Healthcare robots recommendation and tagging Suresh Kumar as CTO & • Patient experience platforms • Targeted advertising using CDO (ex- Google, • Physician assistance tech intelligent platforms Microsoft, Amazon, IBM) Zinnov Proprietary Confidential Source: Zinnov Z1000 database, Zinnov Research & Analysis 6 Large IT Service Providers are betting on ER&D capabilities to drive growth ACQUISITIONS IMPACT ER&D Services growth rate is consistently outpacing IT services’ • Acquired for USD 4.1 B in 2019 USD 4 B • Gained access to new verticals, • In combined revenues, making it a delivery geographies, and horizontals global leader for ER&D • “One stop shop” for full stack engineering & digital requirements • New Brand launched “Cognizant • Acquired Softvision for ~USD 0.5 B in Softvision” 2018 • Access to Romania for digital • Enhanced capabilities in AI, VR, IoT, engineering talent etc. • Focus on developing platforms • Fairway’s San Diego office is Accenture’s new “Engineering • Acquired Fairway Technologies, a US Innovation” center based firm with a focus on platform • Accenture has shown a strong focus engineering services on platform engineering services and has an 8,000 member team Zinnov Proprietary Confidential Source: Zinnov M&A database 7 Large ER&D deals continue to sustain momentum Drivers of Large ER&D deals Large ER&D deals ~USD 15 B Building the Digital TCV of large ER&D deals signed in the last ~3 years Core for Large 1 Enterprises Carving Out Partner of Choice 44% Legacy Products for Enterprise Of large ER&D Deals had SOFTWARE in scope for Software Cos. & 2 3 GCoEs Enterprises Globalization of IOT Managed Private Equity Services Related 17% Portfolio 4 5 Opportunities of large ER&D deals involved “BUILD THE NEW” Companies Zinnov Proprietary Confidential Source: Zinnov Z1000 database, Zinnov Research & Analysis 8 Ø Overall ER&D Zones 2019 v ER&D Zones – Small and Medium Service providers 2019 Ø Horizontal Ratings v Design & Simulation engineering v User experience engineering v Platform engineering 01 ER&D Services Market Overview v Quality Assurance engineering Ø Vertical Ratings v Automotive v Aerospace v Construction & Heavy Machinery v Consumer Electronics v Consumer Software 02 Zinnov Zones ER&D Service provider Ratings 2019 v Enterprise Software v Energy & Utilities v Industrial Automation v Medical devices v Semiconductor v Telecommunication v Transport Zinnov Proprietary Confidential 9 Overall ER&D Ratings 2019 Altran HCL Akka Technologies Alten TCS AF IAV L&T TS Wipro HARMAN* Bertrandt EDAG Cognizant Expansive GlobalLogic QuEST Global Itransition Cyient Tech Mahindra R Systems Capgemini Tata Technologies Infosys Aspire Systems Mindteck Tata Elxsi EPAM Caresoft Global Tieto Persistent Systems UST Global Sasken Infogain eInfochips Mphasis KPIT Technologies Cerium Systems Happiest Minds e-Zest Sonata Software TO THE NEW Musala Soft VVDN Technologies Niche Embitel Net Solutions Dextra Technologies SoftDel PathPartner Scale & Scalability, # of Verticals serviced, Client Spread Client serviced, Verticals of # Scalability, & Scale Daffodil Software Service providers with dotted lines have been evaluated based on Emerging Established Zinnov’s analysis and understanding Specialization, R&D practice maturity (depth and maturity of services), Innovation & IP, Eco-System Linkages, Customer input Zinnov Proprietary Confidential Source: Zinnov Research & Analysis *HARMAN Connected Services 10 ER&D Zones – Small and Medium Service providers 2019* Infogain Sasken VVDN Happiest Minds Technologies Leadership Zone Mphasis R Systems Itransition TO THE Expansive NEW Sonata Software Aspire Systems Mindteck Caresoft Global Cerium Systems Bristlecone Execution Zone Musala Soft Embitel e-Zest Net Solutions Dextra Technologies Niche SoftDel PathPartner Daffodil Software Breakout Zone Scale & Scalability, # of Verticals serviced, Client Spread Client serviced, Verticals of # Scalability, & Scale Emerging Established Specialization, R&D practice maturity (depth and maturity of services), Innovation & IP, Eco-System Linkages, Customer input Zinnov Proprietary Confidential *ER&D service revenue < $150M Source: Zinnov Research & Analysis 11 Ø Overall ER&D Zones 2019 v ER&D Zones – Small and Medium Service providers 2019 Ø Horizontal Ratings v Design & Simulation engineering v User experience engineering v Platform engineering 01 ER&D Services Market Overview v Quality Assurance engineering Ø Vertical Ratings v Automotive v Aerospace v Construction & Heavy Machinery v Consumer Electronics v Consumer Software 02 Zinnov Zones ER&D Service provider Ratings 2019 v Enterprise Software v Energy & Utilities v Industrial Automation v Medical devices v Semiconductor v Telecommunication v Transport Zinnov Proprietary Confidential 12 Design and Simulation Engineering Ratings 2019 TCS Altran L&T TS HARMAN Alten Connected Wipro Expansive Services HCL Tech Mahindra Tata Technologies Capgemini Tata Elxsi QuEST Global Cognizant Cyient GlobalLogic KPIT Technologies eInfochips EPAM UST Global Happiest Minds Caresoft Global Tieto PathPartner Niche Persistent Systems Mphasis VVDN technologies Scale & Scalability, # of Verticals serviced, Client Spread Client serviced, Verticals of # Scalability, & Scale Service providers with dotted lines have been evaluated based on Emerging Established Zinnov’s analysis and understanding Specialization, R&D practice maturity (depth and maturity of services), Innovation & IP, Eco-System Linkages, Customer input Zinnov Proprietary Confidential Source: Zinnov Research & Analysis 13 User Experience Engineering Ratings 2019 Accenture TCS HCL Altran Expansive Capgemini Wipro Tech Mahindra Tata Elxsi EPAM Tieto HARMAN Connected GlobalLogic L&T TS Services Persistent Systems KPIT Technologies Alten QuEST Global UST Global Cyient Mphasis Tata Technologies Niche Happiest Minds Infogain R Systems Softdel Itransition e-Zest Scale & Scalability, # of Verticals serviced, Client Spread Client serviced, Verticals of # Scalability, & Scale Service providers with dotted lines have been evaluated based on Emerging Established Zinnov’s analysis and understanding Specialization, R&D practice maturity (depth and maturity of services), Innovation & IP, Eco-System Linkages, Customer input Zinnov Proprietary Confidential Source: Zinnov Research & Analysis 14 Platform Engineering Ratings 2019 Accenture HARMAN TCS Connected Wipro Services HCL Expansive Cognizant Altran Capgemini Persistent Systems Tech Mahindra L&T TS EPAM Tata Elxsi Alten Tata Technologies QuEST Global GlobalLogic UST Global Happiest Minds KPIT Tieto Aspire Mphasis Systems Itransition R Systems Infogain Daffodil Software Musala Soft Sonata Software Niche Cyient Mindteck Net