Vibrant Gujarat 2013

1. Opportunities in IT/ITeS Sector in Gujarat Colonel Naveen Bhasin, CEO, SaiInfoSystems (India) Ltd Vibrant Gujarat 2013

2. Contents –IT/ITeS

3. Overview 1 Vibrant Gujarat 2013 • IT

4. India – IT/ITeSScenario GROWING INDUSTRY IT / ITeS industry is expected to be USD 320 billion by 2020. The CAGR for the decade (2011-2020) is pegged at 15% Domestic BPO market would increase to USD 2.5 billion by 2014 The Indian electronics turnover is expected to be USD 400 billion by 2020. TRAI is targeting a 10-fold increase in broadband subscribers to 100 million by 2014 from existing 10.3 million Industry has also started to impact rural areas – rural BPO organizations employed more than 5,000 people in FY2009 LARGE INDUSTRY The Indian IT industry is a USD 88 billion industry with 80% of the revenues coming from exports. It has been growing at a CAGR of about 17% in last 5 years (FY07-FY11). The Indian IT & ITeS sector employs over 2.5 million skilled people. Employment has been growing at a CAGR of about 20% in during FY07-FY11. The per capita GDP contribution of IT-BPO employees is about 80 times that of a person employed in the agriculture sector The IT-BPO industry currently contributes 14% to India‘s total exports Between 2000 and 2011, the IT/ITeS sector received cumulative FDI of USD 107 billion India is referred to as the back office of the world, with its strong cost advantages and skilled work force in providing ITeS.

5. India – IT/ITeS scenario Revenues of different components of IT/ ITeS Industry. CAGR for FY05 to FY 10. • Industry characteristics • Major segments: 1. IT Services, 2. ITeS – BPO, 3. Software products and Engineering Services, 4. Hardware • Segment-size: IT services is the biggest in size (the revenue from IT services constitutes about 50% of the total industry revenues) • Segment growth: Software products & Engineering services are fastest growing (CAGR – 27.5%) and slowest growing segment is Hardware (CAGR – 17%) • Larger companies depend more on export and smaller ones more on domestic market – hence, larger companies would prefer an SEZ over other IT space (such as an IT Park) because of export incentives provided in SEZs. • In the future, domestic market would be the growth driver for the IT industry – even the top 10 companies’ revenue dependency on domestic market would increase. CAGR 10.5% CAGR 21.8% IT services form the largest portion of IT/ITeS revenues CAGR 27.5% CAGR 23.1% Source: NASSCOM

6. Future outlook The total IT / ITeS industry in India should be USD 230 billion to USD 320 billion compared to about USD 90 billion today • We have projected the Indian IT sector demand for four different scenarios as tabulated below. Source: PwC analysis

7. Top 10 Sectors in India – FDI Inflows in 2010-11 Source: FDI in India, 2011 Report

8. Growth drivers-National Policy on IT 2011 • AIMs at MAKING A CHANGE • Toincrease revenues of IT and ITeS Industry from USD 88 Billion at present to USD 300 Billion by 2020 • To expand exports from USD 59 Billion at present to USD 200 Billion by 2020. • To create a pool of 10 million additional skilled manpower in ICT. • To make at least one individual in every household e-literate. • To provide fiscal benefits to SMEs and start-up ventures in key industrial verticals • To gain big global mkt share in cloud-based services & mobile-based value-added services • To leverage ICT for key Social Sector initiatives • To strengthen the Regulatory and Security Framework for ensuring a Secure Cyberspace ecosystem • To attract investments in IT in Tier-II & III cities Targeted revenue in USD billion by 2020 Enabling IT Policy 2011 Current revenue in USD billion in 2011 • Strategies formulated in the Policy to achieve targets • Creating ecosystem for a globally competitive IT/ITeS Industry • Human Resource Development • Promotion of Innovation and R&D in IT Sector • Enhancing productivity and competitiveness in key sectors through ICT • Creating an ecosystem for Internet and mobile driven Service Industry • Enabling Service Delivery through e-Governance • Mobile based Value added Services • Development of Language Technologies • GIS based IT Services • Security of Cyber Space Source: Department of Electronics and Information Technology, GoI

9. Gujarat scenario 2 Vibrant Gujarat 2013 • IT

10. IT/ITeS – Gujarat scenario The stretch between Ahmedabad and Gandhinagar is now being developed as a knowledge corridor. Land has been allotted and several IT parks and centres of excellence are taking shape here. Gandhinagar More than 1,000 ICT & BPO companies are operational in Gujarat. 127 new companies are registered with the Commissionerate of Information Technology. More than 1,250 companies are registered with Gujarat Electronics & Software Industries Association (GESIA) IT units in Gujarat are spreading their markets from the US to other regions like Europe, Middle East and Africa Infrastructure available at Infocity - Gandhinagar, GNFC Infotower - Ahmedabad, Astron IT Tech Park - Ahmedabad and another one is coming in Baroda Ahmedabad Vadodara 14 Special Economic Zones have been planned specifically for IT/ITeS – 7 are notified and 7 have secured formal approval Valsad Source: http://www.gnr.stpi.in, GIL; Gujarat Electronics & Software Industries Association (GESIA), Commissionerate of Information Technology

11. Why Gujarat?

12. Investment opportunities 3 Vibrant Gujarat 2013 • IT

13. Investment opportunities During the Vibrant Gujarat Investment Summit 2011, 115 MoUs were signed for the IT/ITeS sector as against 20 MoUs in the 2009 Summit. The proposed investment amounted to Rs. 68,565 crore and could provide employment to 320,000 people. Foreign Investments proposed in the sector by USA were about Rs. 5300 crore employing 14000 people.

14. Urban Living – Products and Services Smart Grids Power, Water, Communication, Public Safety etc. Smart City Aggregation of all modules Smart Grids Smart City Sensors Surveillance Automation Disaster Management Dashboards Intelligent Buildings Energy Mgmt, Home Automation, security etc. Disaster Management EOC, Alert and Messaging, UC, Planning etc. Intelligent Buildings Analytics Homeland Security Turnkey projects involving command and control centres, info gathering, analytics etc. Homeland Security

15. HLS Spend Forecast: Break-up Source: “Homeland Security Assessment – India; Expansion and Growth” by ASSOCHAM; June 2011

16. Data Centres / Cloud Services – Market Size and Potential • Current data center capacity in India at approx. 2.8 million sq. ft. (Service Providers have 55% Market Share and Captive has 45%). The same capacity is projected to increase to 6.6 million sq. ft. (Service Providers capturing 70%) • Median Data Center size today is 2500 – 3000 sq. ft.; the industry may see consolidation of space in near future • PUE of 2.0 may become industry standard • Outsourcing will drive growth rather than captive data centers • Current Revenue streams from Colocation (for space and Power only) and Hosting stands at $487 million. Out of this, hosting and managed services account for < 25%. The revenue from these streams is expected to cross $1.3 billion by 2016 (Hosting and managed services to have 35% Market Share) • Disaster Recovery could become a must have service for organizations • Hosting / Managed service will experience higher growth trajectory (26% CAGR) • Growth in Internet and online content will leverage Hosting services Data Center Capacity in India (‘000 sft) Colocation & Hosting Revenue (USD Millions) 14% 22% Source: Gartner Research

17. Healthcare Segment – Products / Services Hospital Applications HMIS, Custom Development, Other Enterprise Level Software Hospital Applications EMR Inter-operability, Database development etc. EMRs Info. Exchange Bringing all the stakeholders in one open exchange Tele-Medicine Software, Physical Infra etc. Info Exchange Tele-Medicine Mobile Apps Portable EMRs, NFC enabled interfaces, QR etc. Mobile Applications

18. Energy Segment – Products / Services Distribution Franchise Would provide the basic know-how and operational experience Distribution Franchise SCADA Inherent part of any distribution operations SCADA Smart Meters Heavy demand projected, can be for captive use or for B2B selling Smart Grid IT systems, turn key deployment and operations Smart Meters Smart-Grid Sensors Niche Market, usage in multiple verticals Sensors SCADA: Supervisory Control and Data Acquisition

19. Agriculture Segment – Products / Services Soil Mgmt. Services Based on sensors, advisory services for seeds, fertilizers, farming etc. Soil Mgmt. Services Mobile Applications For farmers, market, govt. agencies etc. Mobile Apps GIS Mapping GIS Mapping services, land records and databases GPS Solutions GPS solutions to government and private agencies GIS Mapping GPS solutions Sensors Data capturing devices for all applications Sensors

20. Sum-up – Products and Services Enablers Data Centre / Cloud Services IP Surveillance Event Management System IP Communications IT Hardware

21. Block No. 18, 2nd Floor, UdyogBhavan, Sector 11, Gandhinagar, 382 017, Gujarat, INDIA Phone: 079-23256009, 23250492/3 Fax: 079-23250490 E-mail: indextb@indextb.com www.indextb.com Visit us at www.vibrantgujarat.com