NASSCOM CEO Survey: A Brief

NASSCOM CEO Survey Methodology

Profile Participation

Definitions:

Somewhat lower than 2018: - (0-2%)Somewhat better than 2018: + (0-2%)

Over 100 CEOs were surveyed over the period of 2-3 months (Dec-18 to Feb 2019)

Global Economic and Business Outlook 2019

44%Somewhat lower than 2018

25%

19%

6%

6%

As per World Bank Global economy expected to

slowdown to 2.9% in 2019

International Trade and manufacturing activities to

soften

Advanced economies growth forecasted to drop by 2% predicted by World

Bank

Trade tensions and rising US interest rates

Source: NASSCOM CEO Survey, World Bank, IMFSource: NASSCOM Survey of 100 CEOs

Uncertainties Prevail

US growth constrained by diminishing fiscal stimulus and higher interest rates

Tighter monetary policy

Same as the year 2018

Somewhat better than 2018

Significantly better than 2018

Significantly lower than 2018

34%

53%

13%

Grow by 4-6% Grow by 1-3% No growth / decline over2018

Global Technology and BPM Spending in 2019

Source: NASSCOM Survey of 100 CEOs

As per IDC, Worldwide ICT spending to reach USD 5000 bn by 2019

Worldwide spending on devices: PCs, tablets and mobile phones to grow 2.4% in 2019

SaaS to drive the major growth with CRM to be the focus

Tech Spending expected to grow, less impacted by global uncertainties

Source: IDC, Gartner, NASSCOM Strategic Review 2018, NASSCOM Analysis

Gartner Says Global IT Spending to Grow 3.2

Percent in 2019

Cloud software expected to grow at

more than 22% in 2019

Increased focus towards customer experience to

drive customer relationship management (CRM)

5%

4%

26%

17%

54%

12%

28%

29%

34%

13%

12%

17%

26%

19%

19%

28%

34%

15%

14%

6%

43%

17%

4%

16%

8%

Blockchain

Devices and IOT

Cybersecurity

Hybrid Cloud

Advanced Analytics and AI Priority 1

Priority 2

Priority 3

Priority 4

Priority 5

Top Technology priorities for global businesses in 2019

Source: NASSCOM Survey of 100 CEOs

AI and Data analytics is the game changer for business

Data management market to reach USD 950 mn in 2018 with a growth of over 13% YoY

Security software market expected to grow at CAGR of 15.7% till 2022

Spending on Artificial Intelligence to reach USD 47 billion by 2020

AI will increase economic growth an average of 1.7% across 16 industries by 2035

Source: Forbes, IDC, Markets and markets

Hybrid cloud market to reach USD 98 bn by 2023, driven by growing need for overcoming complexities

Key growth drivers for global businesses for Technology and BPM spending in 2019

Source: CLSA, Economic Times, Forbes, ISG

9%

23%

19%

20%

29%

10%

19%

21%

35%

17%

18%

21%

24%

15%

28%

19%

24%

22%

14%

12%

43%

13%

14%

15%

14%

Cost optimization

Enhanced efficiency and modernisation

Unlock growth with new revenue opportunities

Build customer value through enhanced customerexperience

Digitise the core and build a truly digital organizationPriority 1

Priority 2

Priority 3

Priority 4

Priority 5

CX and Digital: The value levers

Spending on devices (PCs, tablets and mobile

phones) is set to total $33 billion in 2019, a growth of 7.4% year over year as

per Gartner

Enterprise software spending forecasted to reach $6.3 billion and grow 12.9 % in 2019

According to Forbes, Digital transformation to

add USD 154 billion to India’s GDP by 2021

Business process outsourcing (BPO) and

consulting segments are expected to grow at

18.5% and 15.9% respectively in 2019

IT-BPM Industry in India 2019: Outlook

Source: NASSCOM Survey of 100 CEOs

Sentiment for 2019 dividedDigital transformation businesses to grow at CAGR of 18.5% over next 5 years

Source: BAML, CLSA, Economic Times

Government identified IT as one of the 12 champion sectors, INR 5,000 crore fund allocated for these sectors

Acceleration expected inCC YY growth acrossmajor Indian IT companies in FY20

Demand revival from commoditization of digital, hybrid cloud adoption, automation adoption

Digital the key growth driver, forms ~30% of revenue for Top 5 Indian tech firms

As per Bank of America Merrill Lynch, IT services demand expected to be very strong in US

2%

47%

32%

19%

Significantly betterthan 2018

Somewhat betterthan 2018

Same as the year2018

Somewhat lowerthan 2018

Technology Skills and Hiring: Outlook 2019

Tech Talent with right skills will continue to be in high demand

Source: AICTE, Mercer, Robert Walters

As per AICTE, Indian tech companies expect 15-20% increase in hiring compared to 2018

BFSI, Software / Hardware, Manufacturing sectors in India to be the hiring focus in 2019

Jobs in Analytics, Design, AI, R&D and Robotics to attract high demand

Engineers, graduates, and management equivalents to be the hiring intent

Top hiring sourcing channels expected to be Job portals, internal referrals and consultants

5%

45%43%

7%

Significantly betterthan 2018

Somewhat betterthan 2018

Same as the year2018

Somewhat lowerthan 2018

Top focus segments for Digital Capabilities in 2019

Innovation – Build, Buy and Partner key focus

Source: Gartner, Economic Times

4%

16%

31%

15%

35%

8%

23%

19%

27%

26%

19%

23%

21%

23%

19%

21%

26%

17%

21%

8%

48%

12%

12%

15%

12%

Mergers and Acquisitions

New Business Models (Risk Reward, Onshore)

Reskilling and building the right talent pool

Partnerships and Co-Innovation

Products and Platforms

Priority 1Priority 2Priority 3Priority 4Priority 5

90% of Cloud System Integrators investing in Cloud

Management Platforms

As per World Economic Forum, Collaboration is a

strategic imperative as industries become

increasingly digital

Fintech firms to partner with non

traditional financial services to scale

innovation

Gartner predicts shift in “Platform-itization”

of emerging technologies like

Blockchain, AR/VR, IoT, AI etc.

Growth drivers for IT-BPM Industry in India in 2019

Digital @ Scale to grow in 2019

Source: Economic Times, Ibef, Indiaretailing

4%

28%

7%

19%

36%

15%

11%

23%

26%

31%

15%

19%

32%

26%

13%

17%

30%

23%

19%

11%

50%

13%

16%

9%

9%

Increased spending on non-discretionary spending

Increased discretionary spending on technology

Enhanced business opportunities in Europe, APAC

Growth in key verticals – BFSI, Retail, Manufacturing

Large deals for digitalizationPriority 1

Priority 2

Priority 3

Priority 4

Priority 5

Source: NASSCOM Survey of 100 CEOs

ER&D companies are bagging big digital

transformation deals

Indian retail industry expected to increase by 60% and reach USD 1.1

trillion by 2020

GoI to increase share of manufacturing sector to

GDP to 25% by 2022

Increasing FDI and more merger & acquisition

deals expected in 2019

Key risks that can hinder the growth of Indian IT BPM industry

Globalization in transition and skills shortage can hamper industry growth

Source: Business Standard, Economic Times, Livemint, NASSCOM

13%

10%

6%

27%

40%

23%

12%

15%

31%

23%

23%

20%

31%

19%

15%

15%

23%

35%

17%

12%

25%

35%

13%

6%

10%

Increased competition from emerging markets or smallplayers

Threat from advanced technologies like unethical AI,automation

Cyber risks

Lack of digital capabilities & skills

Increased protectionist policies against India

Priority 1

Priority 2

Priority 3

Priority 4

Priority 5

US complaint against certain export-subsidy

measures by India

Indian companies with the most exposure to the US are in the technology and pharma

sectors.

Goldman Sachs cuts the US economic growth forecast for

the first half of 2019 to 2% from 2.4%

Industry will face a shortage of 230,000 skilled techies as jobs

in AI and Big Data are estimated to be 780,000 by 2021

NASSCOM is the industry association for the IT-BPM sector in India. A not-for-profit organization funded by the industry, its objective is to build agrowth led and sustainable technology and business services sector in the country. Established in 1988, NASSCOM’s membership has grown over theyears and currently stands at over 2,500. These companies represent 95 percent of industry revenues and have enabled the association to spearheadinitiatives and programs to build the sector in the country and globally. NASSCOM members are active participants in the new global economy and areadmired for their innovative business practices, social initiatives, and thrust on emerging opportunities.

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