Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Challenges in the European market Srinjay Sengupta

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Agenda 1.The Market In Europe 2.Infosys Europe Performance 3.Key clients 4.Europe : Investment For growth

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited The Europe IT services market ■ Total market size is $158B and CAGR is 7% ■ The UK is the largest IT market in Europe. ■ 3 countries contribute to 60% of the European market ■ Others’ comprises multiple countries including Spain, Italy, Finland, Denmark, Portugal, Greece Source : Gartner

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Europe market - Segments Source : Gartner

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited United Kingdom - market ■ $39B market – CAGR of 7.4%. IT services market closely tracks the US ■ UK economy is one of the better performing European economies. GDP growth average of 2.5% per annum since 2000 ■ US and Indian companies view UK as a springboard into Europe. Financial services/ public sector/ utilities and manufacturing are large sectors ■ Large number of redundancies announced in the market during 2001 continues ■ Application outsourcing and BPO are large growth areas Source : Gartner

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Germany - market ■ $27B market – CAGR of 5.9%. ■ German economy slowed down since Manufacturing, public sector and financial services are big sectors ■ Offshore is becoming more accepted including Eastern Europe suppliers. Language is a challenge. ■ Applications outsourcing and BPO are large growth areas Source : Gartner

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited France - market ■ $22B market – CAGR of 5%. ■ GDP growth has been relatively strong. Expected to grow 2.5%+ in 2002 ■ Outsourcing rates in France are among the lowest in the large Western European economies. ■ Biggest challenge is to overcome language and cultural barriers ■ As with UK and Germany, applications and BP outsourcing are large growth areas. Source : Gartner

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited State of the Market Overall ■ The economic downturn has led to sluggish growths in the IT service market since H ■ Consulting and systems integration (CSI) has been the worst affected. Spending has shifted from e-com capabilities to CRM, application integration and ERP consolidation. Multiple vendor redundancies in this area ■ The network IT services market has had mixed results. Software maintenance and support is a high growth area as also IT security services (post Sept. 11). Telco operators are also investing heavily in customer care, billing and mobile infrastructure. Financial stability is an important criterion for vendor selection ■ IT outsourcing and BP outsourcing are the fastest growing sectors in Europe. Some of the key drivers are cost reduction, focus on core competencies, process improvement and access to new technologies. To win, vendors need to demonstrate capabilities, relationship models and flexible engagement structures. Offshore vendors have the strongest play in this area. ■ Alliances and partnerships are becoming increasingly important in service provisioning

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Market : Trends in Europe Pricing ■ Market pricing continues to be under pressure especially in large outsourcing deals ■ Largely driven by need to burn the bench and utilize excess capacity ■ Due to better access to people, in-sourcing has started to become an attractive sourcing option Other Market Information ■ Decision cycles continue to be significantly longer than before ■ Offshore sourcing is gradually becoming a strategic choice for clients ■ Many outsourcing decisions run into roadblocks because of tough labour laws. Vendors need to demonstrate the capability of hiring people from client companies to overcome this roadblock ■ BPO is fast becoming a focus area especially in UK and Germany

Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Infosys in Europe How Infosys has fared in Europe

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Financial Year Europe Revenue (USD mn) Infosys total Revenue (USD mn) Europe Revenue as a % of total Revenues from Europe for Infosys has crossed $100 Million for the year Infosys in Europe : increasing share of company revenues…

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited European operations of global corporations European multi-nationals as well large pan-European corporations Regional and national banks and financial institutions Europe Key Clients : Banks, financial services, and insurance (A mix of global as well as regional and national players)

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Retail & Distribution Heavy Engineering Europe Key Clients : Retail and manufacturing The best brands and leaders in engineering

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Hi-tech Manufacturing Telecom and Information Technology Energy and utilities Europe Key Clients : Hi-tech, telecom, energy, and utility companies Systems and equipment manufacturers, and service providers

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Infosys first Established in Europe, UK $11.32m $106.10m $$$.$$m$77.88m$30.07m UK Office France Office Germany Office Benelux Office Nordic Office Acquisition (IQ Financial Systems) Business development investment Industry focus Regional Manager Business development investment Large expansion in local delivery team Expansion in consultants Paris office established Expansion of BDM team Local marketing activity New office in Holland Country Manager Appointed Expanding sales and delivery teams New office in Sweden Expanding BDM team Swiss Office New country sales team Marketing activities New business Growth 265%258%139% Infosys Europe : Investing for Growth

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Go-to-market : ISIN Conversion From 22 April 2003, the six digit numeric Wertpapierkennnummer (WKN) currently used in Germany to uniquely identify securities is being replaced by the new International Securities Identification Number (ISIN), a 12 digit alphanumeric code. German banks need to transition all relevant IT systems to the new standards. Infosys has introduced its Security Number Conversion Services which can ensure total ISIN/alpha-WKN compliance before April 2003, in synchronization with system enhancements and business demands. Go-to-market : BASEL II Solution (Europe) Infosys has introduced its Basel II service and has won its first Basel II client Go to Market : Public Sector Services S-Cat Empanelment, NHS projects Client win BHF Bank Investing for Growth : Specific go-to-market Solutions

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Wharton Infosys Business Transformation Award (WIBTA) – France Paris, May 16, recognizes organizations that have transformed their business or industry through the creative application of technology. All Global 2000 companies are eligible to be considered for this Award. Awards will be based on the level of innovation, thought leadership and transformational results represented by the entry and will be presented in May The winners will receive a trophy and certificate of honor. Winners based in Europe and Rest of the World recognized at a special ceremony during a gala dinner at Chateau de Versailles, as part of the Wharton-INSEAD Economic Forum 2002 in Paris on May 16. (Capital One, National Stock Exchange of India, GreenPoint Mortgage, Schlumberger, Warren Lieberfarb of Warner Home Video and Takeshi Natsuno of NTT DoCoMo win the inaugural Awards) Milan in Europe – Monte Carlo, November 7-9, Infosys flagship customer relationship event will be held at MonteCarlo Key clients and prospects will be invited to this three day meet, which will be the flagship event in Europe marketing Europe Leaders visit Infosys Tony Blair was an honored guest at Infosys, Bangalore Investing for Growth : Europe focused marketing

Analyst Meet August 27, 2002 © 2002 Infosys Technologies Limited Europe continues to be a growth Engine for Infosys! ■ 8 office locations with state of the art networks and systems ■ global delivery consultants focused on Europe ■ European Alliance Program established ■ European Regional Marketing established ■ The Infosys Global Delivery Model (GDM) available across all European regions to deliver and support any requirement in any country

Analyst Meet August 27, 2002 “Living up to the promise” © 2002 Infosys Technologies Limited Thank You