2010
AN EVEREST RESEARCH INSTITUTE REPORT
“Survival of the Differentiated” – The New Mantra
of Success for Tier-2 Service Providers
Distinctive Value Propositions of Leading
Tier-2 Indian IT Service Providers
Everest Research Institute
ERI-2010-5-R-0486
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Amneet Singh, Vice President – Research
Jimit Arora, Research Director
Kiranjeet Kaur, Research Analyst
Copyright © 2010, Everest Global, Inc. All rights reserved.
“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Table of contents
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
Background and Introduction
Background and introduction.....2
Role of Tier-2 service providers in
a buyer portfolio.......................5
Leverage points and differentiating
value propositions of showcased
Tier-2 service providers............10
Service provider profiles...........13
Conclusion: implications for
buyers and service providers.....23
As the global sourcing market evolved, mature buyers diversified their IT delivery
footprint beyond India and are sourcing services from locations such as China, the
Philippines, Brazil, Mexico, and countries in Central and Eastern Europe to manage
“concentration risk” considerations. However, despite the growth of these other
emerging IT destinations, the US$27 billion Indian offshore IT services market
commands approximately 50 percent of the global industry and remains the single
largest location for offshore delivery of IT Application Development and
Maintenance (ADM) and Remote Infrastructure Management (RIM) services.
A significant contributor to India’s dominance in the offshore IT services market was
the success of the Indian service providers that firmly established the proposition of
the global delivery model by delivering high-quality IT services in a cost-effective
manner from India. While the captive model for sourcing IT services retains its
relevance, the landscape of third-party service providers exploded over the last two
decades; consequently, buyers seeking to source IT services from India have a large
number and variety of providers to choose from. Expectedly, the landscape of
service providers exhibits wide variances in terms of scale, breadth, and depth of
capabilities as well as delivery maturity. Our analysis of the Indian IT services
landscape reveals four distinct categories of service providers operating in the
market (Exhibit 1).
EXHIBIT
1
Description

Indian IT Service Provider
Global majors
Landscape
Source: Everest Research Institute

Tier-1 Indian
majors



Tier-2 Indian
service
providers



Other service
providers



Examples
Large, diversified global IT-BPO majors (>US$5 billion in revenues) that
have established presence in India and several other global locations to
serve the local markets and also take advantage of low-cost locations
for service delivery
Global majors have aggressively leveraged inorganic means to grow
India delivery presence
Accenture, Capgemini,
Dell Services, CSC, HP,
IBM
India-based service providers with revenues over US$1 billion
From their legacy strength in IT ADM, these providers invested
aggressively to build an end-to-end proposition spanning consulting, IT
infrastructure, IT applications, and BPO
These providers are also building a global delivery footprint (including
onshore presence) to compete effectively with global majors
Tech Mahindra-Mahindra
Satyam, Wipro, Infosys,
TCS, Cognizant , HCL
(TWITCH)
Mid-sized service providers with revenues in the range of US$100
million to US$1 billion
Select providers in this segment developed mature delivery capabilities
around select verticals and specific services and increasingly compete
with global majors and Tier-1 Indian majors
Delivery footprint is concentrated largely in India; however, these
providers aspire to expand to other low cost locations
Headstrong, Hexaware,
L&T Infotech, Patni,
Microland, MindTree,
MphasiS, Sonata
Software, Syntel
Smaller players with less than US$100 million in annual revenues
Includes select “specialist” providers with narrow focus on a specific
service line or vertical
Segment also includes “generalists” that are focused on small buyer
organizations with a limited proposition for mid-sized and large buyers
Applabs, Aditi
Technologies, InterGlobe
Technologies, Kale
Consultants, QA Infotech
The first two categories – global majors and the Tier-1 Indian majors – dominate
the market and collectively constitute 40-50 percent of India’s offshore IT services
market revenues. The success of the Tier-1 Indian service providers, in particular,
was instrumental to the growth of the Indian IT market. Despite their large installed
revenue base, they achieved 20 percent CAGR revenue growth over the last three
years.
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
An important but often overlooked category of service providers is the Tier-2 or midsized service providers that are in the US$100 million to US$1 billion revenue
range. Despite their relatively smaller operating scale, these service providers played
an important role in India’s growth as an offshore IT hub and currently account for
approximately 30 percent of India’s offshore IT services market (Exhibit 2). Over the
past few years, these service providers developed credible, competitive offerings in
offshore IT services (especially for mid-market buyers) and have established an
important position in the Indian offshore IT market.
EXHIBIT
2
Indian Offshore IT Services
Global sourcing IT market size
2009; US$ billion
Indian IT service exports provider landscape
2009; US$ billion
56-58
100% =
100% = ~27
Market and Service Provider
Landscape
Other offshore
destinations
Other service providers
~52%
10-15%
MNC captives
~10%
10-15%
Sources: Everest Research Institute;
NASSCOM
Global majors
Tier-2 Indian 25-30%
service providers
India
~48%
2009
30-35%
Tier-1 Indian
majors
However, despite their notable contribution to the growth of the Indian IT services
industry, uncertainty surrounds the future of Tier-2 providers. Even prior to the
economic recession, the average Tier-2 provider witnessed slower growth than their
larger counterparts. In a post-recession environment, Tier-2 providers continue to
face increased challenges in the form of aggressive buyer-driven service provider
portfolio rationalization, enhanced competitive pressures from global and Tier-1
Indian majors, limited mindshare of capabilities among global buyers, and market
speculation about acquisitions in this segment. These challenges raise questions
about the role and relevance of Tier-2 service providers in the rapidly changing
global services delivery space.
Everest’s assessment of the demand- and supply-side dynamics in the current global
sourcing environment confirms that Tier-2 IT service providers are likely to remain
relevant and continue to play an important and meaningful role in the future.
However, to achieve success in this intensely competitive offshore services
marketplace, these providers will need to carve out niches and demonstrate a
differentiated value proposition that goes beyond labor arbitrage and lower billing
rates. These service providers will need to differentiate themselves from the pack
and build mindshare and credibility based on unique value propositions (e.g.,
domain expertise, service expertise) in order to remain relevant and deliver
compelling value to their customers. These differentiated value proposition can then
be “large” in the relevant target markets.
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
This Everest research report examines the Tier-2 service provider landscape and
examines the distinctive value propositions of five leading Tier-2 service providers –
Headstrong, Microland, MindTree, MphasiS, and Sonata Software. These service
providers, in aggregate, achieved above-average revenue growth in this category.
This is mainly attributable to their success in establishing differentiated offerings that
will serve as foundations of growth for the future and enable them to continue
achieving higher success in the competitive global services marketplace and break
away from the numerous undifferentiated, “me-too” providers.
In this Everest report focused on Tier-2 service providers we examine:
The role of Tier-2 service providers in a buyer’s portfolio (illustrated by two client
case studies)
 Differentiation themes and key leverage points of showcased Tier-2 service
providers
 Fact-based snapshots and details on the differentiated foundations for growth of
the five showcased service providers
 Implications for buyers and service providers

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Role of Tier-2 Service Providers in a Buyer Portfolio
Traditionally, sourcing of IT services was managed in a decentralized manner, with
individual business units and geographies selecting their own service providers for IT
delivery. As a result of this decentralized approach, most buyer organizations today
typically work with a number of service providers for sourcing offshore IT services.
The use of multiple service providers often results in a complex portfolio of service
providers that creates challenges for buyers to manage and optimize. To reduce the
cost and complexity of managing multiple relationships, most large buyers are now
seeking to rationalize their portfolio of providers (and others have already done so).
In these portfolio rationalization initiatives, typically it is the large service providers
(i.e., global majors and Tier-1 Indian majors) that benefit at the expense of their
smaller counterparts. Despite the specter of portfolio rationalization, Tier-2
providers can continue to play an important role in buyer portfolios for not only
small/mid-sized buyers (the perceived “sweet-spot” of Tier-2 providers) but also for
large enterprise buyers.
Global sourcing buyers utilize service providers in their portfolio in four distinct
modes (Exhibit 3). Expectedly, while Tier-2 service providers have a more obvious
and complete proposition for small/mid-sized buyers, they also play an important
role as “specialists” for large enterprise buyers.
EXHIBIT
3
High
Medium
Low
Ability of Tier-2 providers to create value for
Role of Tier-2 service providers
in buyer IT portfolios
Third-party
outsourcing modes
1
Key characteristics
Service provider facilitates easier access to specific skills
Leverage for work with volume fluctuations or where
expertise cannot be sourced as effectively internally
 Performance is viewed as productivity relative to the
utilized staff
 Manage similar to internal resources
Staff
augmentation

Specialized
support

Source: Everest Research Institute
Small buyers
Mid-sized buyers
Large buyers
(<US$1B revenues) (US$1-5B revenues) (>US$5B revenues)

2


3
Service provider support spans across multiple areas to
generate value from leveraging the relationship, contract,
and other structures
 Requires careful structuring and investment in
relationship, including how to grow the relationship to
broader scope/value
End-to-end
support

Enterprise
transformation
partner

4
Utilize best-of-breed providers for relevant areas
Leverage provider’s investments in its domains of expertise
Relationship managed by the organization entity receiving
the services
Service provider delivers capacity and expertise to
accelerate change
 Targeted at specific business areas that justify
transformative efforts
 Provider must work closely across multiple areas of
organization
Differentiation through
specialization is key to success
in mid-sized and large buyers
Our analysis of Tier-2 Indian providers indicates that they typically architect their
differentiated value proposition by specializing along three distinct themes – industry
vertical, service offerings, and geographic market focus (Exhibit 4). For IT ADM
services in particular, industry vertical expertise and client references are increasingly
becoming critical provider-selection criteria. In select instances, these service
providers combine two of these themes to create “super specialized” offerings.
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Service providers also leverage other differentiated propositions structured around
the delivery model (e.g., nearshore or onshore specialists), engagement models
(e.g., virtual captive, BOT), or pricing models (e.g., gain-sharing, transaction-based
pricing). However, these are more suited to succeed in specific client engagements
and are not usually relevant as enterprise-level differentiation themes.
EXHIBIT
4
Specialization themes
Specialization themes to create
differentiated value propositions
Vertical expertise
Source: Everest Research Institute

Distinctive domain
expertise demonstrated for
clients in a specific industry
vertical

To build and demonstrate
industry expertise, service
providers hire industry
practitioners, invest in
intellectual property and
develop reusable
frameworks to improve time
to market

Further, most providers aim
to specialize in subverticals such as capital
markets within financial
services, airlines in travel
and transportation, and
even specific systems such
as trading, reservations,
etc.
Service expertise


Distinctive capabilities
demonstrated in a specific
IT service offering (e.g.,
testing, business
intelligence) or technology
stack (e.g., .NET, SAP ISOIL)
In several instances,
service providers try to
customize these service
offerings for specific
verticals. Testing services
for insurance products,
outsourced product
development for hi-tech
vertical are examples of
vertical-focused service
specialization
Geographic expertise

Distinctive capabilities
demonstrated for clients in
a specific geographic
market

Service providers adopt a
focused strategy of
pursuing clients in specific
geographic segments and
offering a compelling value
proposition by adapting
their offerings to meet
unique market-specific
requirements (e.g.,
language, regulations)
Note: The above color scheme is used in the remainder of the report to illustrate provider-specific specialization themes
Role of Tier-2 providers for small/mid-sized buyers
Given their size, Tier-2 service providers are suited to play an end-to-end, strategic
role in the portfolios of small (less than US$1 billion in revenues) and mid-sized
(US$1-5 billion in revenues) buyer organizations. These relatively smaller buyer
organizations may not obtain the desired focus and attention of larger service
providers and, therefore, often seek “right-sized” service providers for their global
sourcing requirements. For these buyers, Tier-2 service providers expectedly emerge
as an attractive option and are well positioned to emerge as the strategic or core
providers within the portfolio of IT service providers. This positioning enables Tier-2
providers to bring differentiated value propositions to the table.
Further, as a result of the global economic slowdown, many small and mid-sized
organizations are focused on cost containment initiatives, and seek to experiment
with offshoring. For a number of these “first-generation” offshore buyers, Tier-2
service providers present an attractive sourcing option.
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Role of Tier-2 providers among large buyers
For large organizations (>US$5 billion in revenues), Tier-2 service providers
typically do not offer the scale and breadth of capabilities to serve as end-to-end
partners and are usually leveraged as “specialists” to access specialized or best-ofbreed skills.
In addition to the specialist role, Tier-2 providers serve as a potential choice for
large buyers that seek to execute small project-based engagements, manage
variances in business volumes, or build redundancy in their portfolios. Finally, Tier-2
providers have relatively lower corporate overheads and are usually more agile in
decision making compared to the larger providers. These attributes enable Tier-2
providers to be more aggressive in pricing, both in terms of billing rates and pricing
models (price challengers to larger providers), and also more flexible and creative
with their engagement and contract structures.
The following pages include case studies of two large buyer organizations that are
leveraging Tier-2 service providers as “specialists” in their global sourcing
portfolios. The case studies highlight the critical role of a differentiated value
proposition to survive and thrive in a portfolio of service providers.
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Case study: Mortgage services by Headstrong for a diversified bank
Client overview
Engagement
overview
The client is a diversified bank, headquartered in Virginia, offering a broad
array of financial products and services to consumers, small businesses, and
commercial clients in the U.S., Canada, and the UK.
During the last five years, the client acquired several smaller banks to further
its growth plans. With these acquisitions, the company recognized a need to
consolidate a loan origination solution around the different mortgage
businesses to develop its own methodology and meet Real Estate Settlement
Procedure Act (RESPA) requirements slated for January of 2010.
Aware of Headstrong’s specialized focus in the financial services market, the
client engaged Headstrong to streamline its suite of offerings in the Loan
Origination space in order to realize the full return on investment in these
areas and consolidate applications for efficiencies. The Headstrong team,
working in conjunction with the client, delivered a RESPA compliant loan
origination solution across the mortgage businesses in less than 90 days to
meet the regulatory requirements.
Following Headstrong’s delivery of front-end consulting services, the client
engaged Headstrong to assist with the development of a technical data
warehouse solution. This solution included working in conjunction with their
experts to build out a mortgage based data model that integrates into their
overall bank model, to support in-depth analysis across their services,
including credit card, banking, mortgages and other services.
Rationale for
selecting Headstrong
Headstrong was able to offer the client a full complement of consultants with
knowledge of the mortgage industry encompassing an average of more than
15 years of experience per consultant, as well as a robust toolkit and
established methodology for collecting and analyzing the organization’s
heritage business processes and mortgage data.
The client selected Headstrong for its niche domain knowledge and extensive
industry experience which allowed the client to leverage the technology
framework across other integrations, as well as operational data store for all
mortgage data. Furthermore, the client was able to utilize Headstrong’s
technology platform developed for loan origination systems servicing
platforms, point of sale solutions and secondary market platforms.
Key benefits and
results



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Improved overall efficiency by developing a reporting capability that
provided access to decommissioned loan origination systems data
Consolidated client systems and reduced inefficiencies by developing a
standard reporting solution
Streamlined business and data management processes by delivering
consulting, data and regulatory compliance services, that ultimately
reduced client’s operating costs significantly, as well as streamlined its
infrastructure
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Case study: Infrastructure Management Services by MindTree for The Carlyle Group
Client overview
Engagement
overview
“MindTree offers a unique
corporate culture that
differentiates them in the industry
and aligns with core values of
Carlyle. This paves the way for a
strong relationship, which will
help us reduce operational costs
by leveraging MindTree's IT asset
management expertise, ITIL
processes, and around-the-clock
support.”
"It was the only vendor that
talked to us about continual
improvement, helping us find
ways that can make us more
efficient, increase stability,
decrease call volumes, and
shrink our footprint. We were
impressed."
Headquartered in Washington, D.C., The Carlyle Group (“Carlyle”) is a
private global investment firm that originates, structures, and acts as lead
equity investor in management-led buyouts, strategic minority equity
investments, equity private placements, consolidations and buildups, and
growth capital financings.
Client situation and objectives: Carlyle had a long-running relationship with a
domestic managed services provider that served as an extension to Carlyle,
which resulted in a “personality-driven” relationship. Carlyle wanted to move
to a process-oriented relationship, comply with ITIL policies and procedures,
and be SLA driven.
Engagement scope: Carlyle switched its relationship from its domestic
managed services provider to MindTree in May 2010. As part of this
engagement, MindTree now provides IT infrastructure management and
support services for Carlyle’s global data centers. More specifically, the scope
covers monitoring and management of:
 All of Carlyle's IT production servers at Carlyle's data centers in the United
States, UK, and Hong Kong
 Disaster recovery data center in Virginia
 File servers located in Carlyle offices throughout the world as well as other
classes of hardware and applications
MindTree uses its managed services platform, mWatch, to remotely provide
services to Carlyle from India. mWatch is an integrated ITIL-compliant
platform with monitoring and management capabilities for applications,
databases, servers, networks, storage, and security.
Rationale for
selecting MindTree
– David Roth,
Managing Director,
Information Technology,
at The Carlyle Group
Narrowing its choice from five suppliers (including global and offshore
majors), Carlyle selected MindTree based on:
 Confidence in MindTree’s technical capabilities
 Cultural capabilities and shared values
 Willingness to agree to SLAs
 Competitive pricing
 Overall thoroughness of response to request for proposal
On the technical side, MindTree's tools for configuration, change, and service
management were the key aspects that led Carlyle to select MindTree as its IT
infrastructure services supplier.
Key benefits and
results







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Significant improvement in communication and transparency in operations
Excellence in service ownership demonstrated by proactive service
improvements
ITIL v3-compliant service delivery (ISO 20000)
Operations “run books” maintained current
24x7 support coverage enhanced service responsiveness to global
business offices
Demonstrated willingness to take on additional responsibilities
Stated objective on continual service improvement
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Leverage Points and Differentiating Value Propositions of
Showcased Tier-2 Service Providers
Of the several India-centric Tier-2 service providers, we examine the distinctive
capabilities of five leading providers – Headstrong, Microland, MindTree, MphasiS,
and Sonata Software. These service providers successfully differentiated themselves
by building credible scale and financial strength; investing in specific offerings for
clients in a select set of industry verticals, service lines, or geographies; and
expanding their delivery footprint beyond India to meet requirements of global
clients.
Scale and growth
The five showcased Tier-2 service providers demonstrated robust growth over the
last few years and achieved meaningful scale and client experience to meet the IT
needs of global organizations (Exhibit 5). Through organic and inorganic growth,
these five providers collectively achieved a CAGR of 30 percent in the last three
years, which is significantly above the growth trajectory of the overall Indian
offshore IT services market. Further, while 2009 was a challenging year for most of
these providers (due to the soft economy), our interactions with these providers
suggests that 2010 will be a year of robust growth.
EXHIBIT
5
Revenues
US$ million
Three-year CAGR
45%
Revenue and growth of Tier-2
874
service providers
Sources: Everest Research Institute;
service provider inputs; NASSCOM
Growth comparison
Three-year CAGR; Percentage
30%
18%
30%
215
27%
13%
272
291
MindTree
Sonata
20%
17%
1001
Microland
Headstrong
MphasiS
Showcased
Tier-2
service
providers2
Tier-1
Indian
majors3
India’s
offshore IT
market
1 Everest estimated revenue. Microland does not report financials being a privately-held firm
2 Headstrong, Microland, MindTree, MphasiS, and Sonata Software
3 Cognizant, HCL, Infosys, TCS, and Wipro
Distinctive capabilities and foundations for growth
Through focused strategies and investments, the five Tier-2 service providers built
differentiated capabilities in select niches / specialized areas to strengthen their
competitive positioning in the offshore IT services marketplace.
Everest’s assessment of capabilities of the five Tier-2 providers highlights that the
two relatively smaller providers adopted a unidimensional differentiation approach
– Headstrong for capital markets (vertical expertise) and Microland for remote
infrastructure management (service expertise). Given their relatively larger scale,
MindTree, MphasiS, and Sonata exhibit spikes in several areas that cut across a
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combination of the three differentiation themes (Exhibit 6). The showcased service
providers have been successful in building scaled practices (US$50-100 million in
revenues) for each of their differentiated offerings.
EXHIBIT
6
Differentiated
capability
Distinctive offerings of Tier-2
Headstrong
service providers
Capital markets
Sources: Everest Research Institute;
service provider inputs
Specialization
theme
Description
Vertical expertise
Headstrong has a strong capital markets focus and derives over
75 percent of its revenues from clients in this vertical. Its broad
suite of IT and business process services span multiple subdomains and competency centers within capital markets
including asset and wealth management, securities financing and
prime brokerage, mortgages, derivatives, and compliance
Service expertise
Microland’s 100 percent focus on remote IT infrastructure
services, comprehensive service presence across major
infrastructure towers, and investments in IP to enable a multitenanted delivery model make it a prominent, end-to-end provider
in the RIM market
Information
management
services for
manufacturing,
financial services,
and travel
Service-vertical
expertise
MindTree’s emerging information management services
business focuses on advanced performance management
services, business intelligence / data warehousing services on a
transaction pricing model, and advanced analytics to
manufacturing, BFSI, and travel clients
Testing services
Service expertise
MindTree’s 2,200+ testing employees deliver a comprehensive
suite of testing solutions for enterprise IT applications and
technology products
Microland
Remote
infrastructure
management
MindTree
Product engineering Service expertise
services
MindTree’s largest practice – product engineering services –
stands out given its end-to-end service offering, investments in
process accelerators and reusable frameworks, and a client base
that includes multiple technology leaders
MphasiS
Insurance
Vertical expertise
With over 2,900 resources in the insurance vertical, MphasiS
provides end-to-end consulting, business, technology and
infrastructure services to 25+ active insurance clients globally
Enterprise web
technologies
Service expertise
MphasiS’ enterprise web technologies practice offers
comprehensive capability across the entire Web technology
spectrum including enterprise portals, Web apps, enterprise
content management, security and identity management, ecommerce, open source, Web 2.0 / social computing
Infrastructure
assurance services
Service expertise
MphasiS’ infrastructure assurance practice provides a host of
industry standard, ITIL-compliant components across
infrastructure towers to 70+ global customers
Travel,
transportation, and
logistics (TTL)
Vertical expertise
Sonata’s joint venture with TUI AG, a leading integrated travel
company in Europe, provides the company the scale and domain
expertise to emerge as one of the strongest providers of offshore
IT services to travel companies
Outsourced product
development for
hi-tech / technology
companies
Service-vertical
expertise
One of the pioneers in the OPD market, Sonata has served 100+
product companies since 1992. Its expertise in OPD spans
enterprise products and embedded systems as well as online
solutions. It also has a specialized array of services and solution
accelerators to meet the requirements of each of these unique
sub-segments
Continental Europe
Geographic
expertise
With close to 48 percent of offshore services revenues from
Europe and a near-shore center in Continental Europe, Sonata
has demonstrated success in a market that was traditionally
elusive for most Indian service providers, irrespective of scale
Sonata Software
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Global delivery footprint
While the examined Tier-2 service providers have a significant employee base in
India, most of these organizations have strengthened their value proposition by
diversifying the delivery footprint to include a number of additional delivery centers
in North America, Europe, and Asia-Pacific regions (Exhibit 7). From being Indiacentric, these providers now leverage a global delivery model that combines
offshore, nearshore, and onshore delivery to not only offer benefits of labor
arbitrage but also build customer proximity and meet globalization requirements of
their clients.
EXHIBIT
7
Headstrong
MindTree
MphasiS
Sonata Software
Delivery presence of Tier-2
service providers outside India
Sources: Everest Research Institute;
service provider inputs
London
San Jose
New York
New Jersey
Hannover
Salzgitter
Tokyo
Shanghai
Colombo
Manila
Singapore
Sydney
The following pages provide an overview of the showcased Tier-2 service providers
and include details of Everest’s assessment of their distinctive value propositions.
These assessments are based on our independent data-driven research, service
provider responses to questionnaires, and our interactions with the leadership and
clients of these organizations. These assessments appear in the following order:
 Headstrong (page 13)
 Microland (page 15)
 MindTree (page 17)
 MphasiS (page 19)
 Sonata Software (page 21)
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Headstrong: Company Profile
Summary assessment:
Headstrong’s specialist focus on
capital markets, its broad suite of
service offerings across subsegments, a marquee client
base, and domain investments in
people, process, and technology,
position the company as a major
contender for delivering IT
services to global capital markets
clients.
Company overview
Headstrong is a privately held specialist service provider of information technology,
operations, and consulting services, focused primarily on buy-side and sell-side capital
markets clients. Founded in 1981, Headstrong was known as James Martin & Co. prior to its
name change in 2000. In 2003, the company acquired TechSpan, a firm focused on
offshore delivery of IT services to financial-services clients. Headstrong’s specialist focus on
capital markets, deep domain expertise across sub-segments, and investments in proprietary
solutions for IT and operations delivery, make it a differentiated and “must-watch” service
provider for capital markets companies.
Revenues
US$ million
CAGR
Established: 1981
215
18%
179
Headquarters: fairfax, VA, U.S.
159
131
Revenues (fY ending December
2009): US$215 million
Employees
Employees (as of October 2010):
3,500
Leadership:
 Arjun Malhotra, Chairman
 Sandeep Sahai, President
and CEO
 Harsh Singh Lohit, MD,
Global Delivery Centers
Quality certifications:
 ISO 27001:2005
 ISO 9001:2000
 SEI CMM Level 3
 CMMI Level 3
Delivery locations:
India (Bangalore,
Hyderabad, Noida)
 Philippines (Manila)
 U.S. (New York)
2006
2007
2008
2009
2,021
2,313
2,271
2,700
Key service offerings







Services mix
Percentage
Application development
Application maintenance
Business consulting
Platform implementation
Quality assurance
Product development
Business process outsourcing (BPO)
Others (3%)
BPO (3%)
Production support
Platform implementation 4%
4%
Quality assurance 7%
Business consulting 13%
67% ADM
Key business segments
North America is the single largest market and accounts for approximately two-thirds of
Headstrong’s revenues. Headstrong also has a strong focus on the Japanese financial
markets, which is the second largest market at 17 percent of revenues.

website: www.headstrong.com
From a vertical stand-point, Headstrong derives ~75 percent of its revenues from clients in
the capital markets vertical. The remainder of the revenues is derived largely from hi-tech /
Independent Software Vendors (ISVs) and healthcare companies – primarily legacy clients
from before the merger of James Martin & Co. and TechSpan.
Vertical mix
Percentage
Geographic mix
Percentage
Others
India
5%4%
UK
7%
Others
Healthcare
5%
8%
Hi-Tech/ISV 12%
Japan 17%
67% North America
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75%
Capital markets
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Headstrong: Key Differentiators
Capital market highlights:
75 percent of total revenue
share
 1,500+ financial domain
experts globally
 70 percent on-site resources
recruited from local securities
industry
 Demonstrated credentials in
serving capital market clients.
Clients include:
 Nine of the world’s top 10
investment banks
 Two of the top five asset
managers
 Multiple exchanges and
electronic marketplaces

Vertical expertise: Capital markets
Headstrong differentiates itself through its focused strategy of pursuing a narrow base of
financial services clients – capital markets. Headstrong’s focus on the segment is evidenced
by the fact that 75 percent of revenues is derived from capital markets clients (the balance
revenues are primarily from legacy clients from before its merger with TechSpan). This
specialist focus makes the scale of Headstrong’s capital markets practice comparable to that
of larger service providers and allows it to successfully compete with larger competitors for
business.
Headstrong has a broad suite of services for capital markets clients that span multiple
domains and competency centers including:
 Asset and wealth management
 Securities financing and prime brokerage
 Reference data
 Mortgages
 Derivatives
 Compliance
In addition to managed services and consulting, Headstrong invests in products and
frameworks for capital markets clients. This helps reduce implementation time and also
improve time to market. Examples of Headstrong’s proprietary solutions include:
 Tradeport: Multi-asset class trading platform for brokerages
 Ice-Fish: Platform to connect to industry utilities across different communication protocols
and message formats
 STRIDE: Exchange technology platform for crossing networks
 WIMS: Consolidated reporting platform for financial advisors, family offices, and endclients across asset classes, client hierarchies, and financial institutions
In addition to these proprietary solutions, Headstrong also has expertise in a variety of
standard third-party solutions such as Eagle, Geneva, Calypso, Summit, and Actamize, for
which it offers platform implementation services.
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Microland: Company Profile
Summary assessment: A pioneer
of the remote infrastructure
management (RIM) model,
Microland established a
prominent position as an
specialist IT infrastructure service
provider. Given its scale, strategic
alliances, and flexible, multitenanted delivery model,
Microland is well positioned to
further strengthen its competitive
position in the Tier-2 IT services
landscape.
Company overview
Microland is an IT infrastructure services specialist, offering a comprehensive range of
services to global clients. A pioneer of the remote infrastructure management model,
Microland has its operations hub in India with a global presence across the United States,
UK, and Middle East. With an annual growth rate of ~30 percent over the last three years,
Microland established itself as one of the largest pure-play remote infrastructure
management services providers in India.
Headcount
Number of employees
2,040
2,240
2,300
2008
2009
2,500
Established: 1989
2007
Headquarters: Bangalore, India
2010
Note: Revenue-based CAGR between 2007-2010 is 30 percent
Revenues (fY ending March
2010): US$100 million (Everest
estimated revenue; Microland
does not report financials being
a privately-held firm)
Key service offerings



Employees (as of March 2010):
2,500


Leadership:
 Pradeep Kar, founder,
Chairman and MD
 Sharad Heda, CEO, Global
Tech Support Business
 Jawahar Bekay, COO
 V M Kumar, CMO
Quality certifications:
 ITIL
 Six Sigma
 ISO 27001
 ISO 20000-1
Delivery locations:
India (Bangalore, Gurgaon,
Mumbai)

website: www.microland.com
Services mix
Percentage
Datacenter services
Messaging and collaboration
Networks, communication, and security
services
End-user services
Technical support services
25%
End user
services 17%
20%
23%
Networks,
communication &
security services
Key business segments
Microland focuses primarily on the North American market and derives over half of its
revenues from North America.
Microland’s client portfolio spans multiple industries including software and hi-tech, financial
services, and diversified conglomerates that operate across multiple verticals. 90 percent of
the company’s revenues derive from remote infrastructure management (RIM), while the
remaining 10 percent are through on-site IT infrastructure support.
Geographic mix
Percentage
Vertical mix
Percentage
Middle-East
4%
India
19%
Healthcare
Media
5%5%
Manufacturing
7%
UK
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Datacenter
services
Messaging &
collaboration
services
51% North America
Everest Research Institute
Technical
support services
15%
Software
and hi-tech
ITES 13%
26%
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30%
BFSI
17%
23%
Diversified
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Microland: Key Differentiators
RIM highlights:
2,500 infrastructure
employees
 20+ years experience
 More than 75 clients,
including Fortune 100
 Strategic alliances with Avaya,
ChangeBASE AOK, Cisco,
Microsoft, Sybase, Symantec
and VMware
 Experience of managing
 200,000+ systems and
devices
 650,000+ mailboxes
 50,000+ end-user
devices
 “smartnow” – focused on
services for optimizing current
IT operations. Services suite
covers:
 Infrastructure management
services
 IT modernization services
 Process maturity services
 Assurance and compliance
services
 Technical support services
 “smartfuture” – next
generation IT solutions that
deliver long term business
impact. Services suite covers:
 Collaboration services
 Mobility services
 Virtualization services
 Cloud computing services

Service expertise – remote infrastructure management services
Considered a pioneer of remote infrastructure management, Microland provides
comprehensive services across all infrastructure towers including datacenter, networks,
messaging, technical support, and end-user services. Microland’s specialist focus on the RIM
market allows it to successfully compete with larger service providers for business. It currently
serves more than 75 clients including Fortune 100 organizations. Microland guarantees TCO
reduction, helps achieving greater alignment of IT with the business, and delivers higher
client IT infrastructure performance by leveraging its processes, analytics, and automation,
combined with ITIL and Six Sigma best practices.
Microland offers the full realm of ITIL service functions through an Integrated Service
Management model based on an automation platform ‘smartcenter’ wherein Microland
leverages tools across orchestration, reporting, dashboards, process audits, and knowledge
management to deliver scalability, reliability, speed, control and productivity to its clients.
Additionally, the platform offers an industrialized service delivery model that supports output /
outcome-based pricing models.
Distinctive capabilities in Microland’s portfolio:
Datacenter services: Microland’s server management solutions help enterprises consolidate
and optimize the server infrastructure by centralizing business-critical applications and
servers. Similarly database management solutions deliver 24x7 availability and performance
of business critical databases through continuous monitoring, management and ensuring
optimal performance of the database environment. Further, Microland has built expertise in
virtualization services, which covers the entire services lifecycle from assessment, planning,
and deployment to management and then optimization as applicable.
Messaging management and migration services: Microland’s messaging service suite
includes messaging architecture design, testing and deployment, migration management,
and messaging platform management. With over 500 certified consultants, Microland has
worked with large enterprise customers including zero defect migrations of over of one
million mailboxes, and ensuring Six Sigma-class e-mail availability for 650,000 users.
Microland is a Microsoft Gold Certified Partner and runs a dedicated Center of Excellence
(CoE) for Microsoft technologies.
Network management and optimization: Microland’s network management and optimization
portfolio covers network management, network optimization, communications management,
unified communications deployment, and managed video conferencing services. Microland
has a dedicated Cisco CoE with over 230 Cisco certified professionals.
Windows 7 life cycle services: Microland’s Windows 7 life cycle services include Windows 7
application compatibility, optimized desktop plan, application remediation, application
virtualization, image engineering migration management, deployment readiness, and enduser deployment. It has expertise in remediating and migrating thousands of applications and
infrastructure seats and has delivered 50+ Windows 7 assessments to clients.
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MindTree: Company Profile
Summary assessment:
MindTree’s strategic focus on
information management
services which include BI/Dw
and analytics, testing services,
and product engineering services
position it as a leading mid-sized
player in the Indian IT services
industry.
Company overview
Started in 1999 with 10 professionals, MindTree Ltd. has grown at 27 percent CAGR since
2007, and currently employs over 9,500 professionals. Co-headquartered in Warren, New
Jersey, USA and Bangalore, India, MindTree has development centers in India and offices
spread across Asia, Europe, and the United States. MindTree’s distinctive capabilities are its
information management services which include BI/DW and analytics, independent testing
services, and product engineering services comprising of embedded systems and software
product engineering.
Revenues
US$ million
Established: 1999
27%
Headquarters: MindTree is
co-headquartered in Bangalore,
India ,and warren, New Jersey
(USA)
Leadership:
 Ashok Soota, Executive
Chairman
 Krishnakumar Natarajan,
CEO and Managing Director
 S. Janakiraman, President
and Group CEO, Product
Engineering Services
 Scott Staples, President and
CEO, Knowledge Services
 Parthasarathy N.S., President
and CEO, Independent
Testing & IMTS
 Anjan lahiri, President and
CEO, IT Services
Quality certifications:
ISO 20000
 ISO 27001
 ISO 13485
 CMMi and PCMM Level 5

Delivery locations:
India (Bangalore, Chennai,
Delhi, Hyderabad, Mumbai,
Pune)
 U.S. (New Jersey, San Jose)

269
272
192
132
Revenues (fY ending March
2010): US$272 million
Employees (as of September
2010): 9,584
CAGR
Employees
2007
2008
2009
2010
4,162
5,640
7,866
8,297
Services mix
Percentage
Key service offerings





IT application services
Information management services
Independent testing services
Infrastructure management and
technical support
Product engineering services
Consulting and IT licensing (2%)
Infrastructure management
& technical support
Package implementation
4%
5%
Independent testing 17%
53% Application
development
Application maintenance
19%
Key business segments
The majority of MindTree’s revenues derive from clients in North America. From a vertical
perspective, MindTree derives 85 percent of its revenues from technology (software product
engineering and R&D), banking, financial services, and insurance (BFSI), manufacturing, and
travel segments.
Geographic mix
Percentage
Vertical mix
Percentage
Others
Next In Wireless
9%
6%
Rest of the world
12%
India
6%
26%
Software product
engineering
Manufacturing 13%
Europe 19%
63% North America
Travel and 14%
transport
18%
BFSI
14%
R&D services
website: www.mindtree.com
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MindTree: Key Differentiators
Information management
services highlights:
 Eight percent of revenue and
700+ employees including
125 statisticians/business
analysts
 90 percent of revenues from
clients in manufacturing, BFSI,
and travel clients
 Leverages Analytics-onDemand and Hosted Analytics
Models
 Certified both internally
(MCPM MCSE) and externally
(by packaged tool vendors –
SAP, Oracle, Microsoft, IBM,
SAS, etc.)
Testing highlights:
17 percent of total revenues
and over 2,200 employees.
90 percent of employees are
engineers
 Tested 2,000+ products and
enterprise applications from
chip to cloud
 Testing solutions for 13
industry domains
 Strategic relationship with
many customers including
Microsoft, CCH, Symantec,
SITA, Avis Budget, Volvo,
NFUM

Product engineering highlights:
46 percent of revenues and
3,700 employees
 Developed and tested over
2,100 software products
 Key clients – Microsoft, Yahoo,
eBay, Symantec, Cisco, UTC,
AOL, Real, CCH (Wolters
Kluwer company)

Service-vertical expertise – information management services for manufacturing, BFSI, and
travel
MindTree’s information management services practice offers end-to-end data, business
intelligence and analytics offerings, as well as advanced statistical and data mining services
(including segmentation, text mining of unstructured data, forecasting, scoring models, and
exploratory data analysis). The company specializes in delivering its information management
services to manufacturing, BFSI, and travel clients. It offers advanced performance
management solutions, business intelligence/data warehousing services on a transaction
pricing model, and advanced analytics to clients in these verticals.
MindTree has partnerships with industry-leading business intelligence solution/analytics/
technology providers (e.g., Microsoft, Oracle, SAP, IBM, Informatica, Omniture, Core
Metrics, SAS) and leverages its investments in IP and frameworks (e.g., Reusable Business
Intelligence Components – RUBIC, TP-360 for Trade Promotion Analytics for manufacturing),
to improve time to market and superior decision making.
Service expertise – testing services
With 2,200+ employees, MindTree’s testing business unit offers a comprehensive suite of
testing solutions for both enterprise IT applications and technology products. Its offerings
include:
 Core testing services including test life cycle, test consulting, and automation
 Specialized testing services such as white-box, performance, security, SOA, SAP,
accessibility and globalization testing
MindTree also offers output-based and outcome-based pricing to its testing clients, and
differentiates itself through its three pillars of excellence:
 Test Labs: Innovation center focused on test automation, performance testing, SAP testing,
and accessibility testing
 MindTest: Testing methodology aided by test dashboard, test quality index (TQI), and test
metrics analysis and decision model (TMAD)
 Testing Academy: Focused on competence development in key testing areas including
external certification, domain knowledge, and programming knowledge
Service expertise – product engineering services
With US$125 million in revenues (46 percent of total revenues) and over 3,700 employees,
MindTree has a significant presence in the product engineering services space. It derives over
60 percent of product engineering revenues from clients in the software product engineering
segment, while the remaining 40 percent comes from R&D services and wireless products.
MindTree employs over 2,000 professionals in the software product engineering segment that
has developed and tested over 2,100 software products. As part of the product engineering
services offering, MindTree offers software and embedded product development,
e-commerce and Web products development, product testing, sustenance engineering,
custom engineering and deployment, and product tech support services.
MindTree’s end-to-end service offerings, investments in intellectual property (IP), process
accelerators and reusable frameworks, and a strong client base (long-term client base, six of
the top 10 product companies, seven of the top 12 semiconductor companies in the world)
position the company strongly in the product engineering services market.
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MphasiS: Company profile
Summary assessment: MphasiS’
distinctive focus on services and
solutions for the insurance
vertical, its mature capabilities in
enterprise web technologies, and
its infrastructure assurance
services make it a credible
service provider for global
customers.
Company overview
The largest among the showcased Tier-2 providers, MphasiS Limited, was formed in June,
2000, after the merger of the U.S.-based IT consulting company MphasiS Corporation
(founded in 1998) and the Indian IT services company BFL Software Limited (founded in
1993). MphasiS operates as an independent Hewlett Packard (HP) subsidiary with its own
board of directors. Through its 38,000+ professionals and delivery centers across the globe,
MphasiS delivers applications services, infrastructure services, and business process
outsourcing (BPO) services to its clients. MphasiS’ differentiated capabilities are its distinctive
focus on the insurance vertical its mature capabilities in enterprise web technologies, and
infrastructure assurance services.
Established: 2000
Revenues
US$ million
Headquarters: Bangalore, India
CAGR
45%
Revenues (fY ending October
2009): US$874 million
874
695
493
285
Employees (as of July 2010):
38,120
Leadership:
Ganesh Ayyar, Chief
Executive Officer & Director
 Ganesh Murthy, Chief
financial Officer
Employees
2006
2007
2008
2009
N/A
24,882
28,795
33,524


Quality certifications:
ISO 9001:2008
 ISO/IEC 27001:2005
(formerly known as ISO
17799)
 CMMI v1.2 Level 5
 Six Sigma

Delivery locations:
Australia (Sydney)
 China (Shanghai)
 India (Ahmedabad,
Bangalore, Chennai,
Hyderabad, Indore, Kolkata,
Mangalore, Mumbai, Noida,
Pondicherry, Pune, Raipur,
Vadodara)
 Japan (Tokyo)
 Singapore
 Sri Lanka (Colombo)
 UK (London)
 U.S. (multiple locations)
Services mix
Percentage
Key service offerings





Application development
Application maintenance
Enterprise application services
Transformation and modernization
services
Infrastructure services
Business process outsourcing
Knowledge processes
Transaction processing
Customer Service
5%2%
Technical Help Desk 5%
6%
Infrastructure
18%
management
Application
37% maintenance and
other services
27%
Application
development
Key business segments

The United States is the largest market for MphasiS, followed by Europe, Asia Pacific and
Japan. In terms of client verticals, financial services is the primary vertical segment for
MphasiS, accounting for almost half of the company’s revenues.
Geographic mix
Percentage
Industry mix
Percentage
Logistics, airlines &
transportation
Healthcare & pharma
6%
8%
Telecom
9%
APAC and Japan
14%
Europe 18%
49% Financial services
68%
Manufacturing & retail 14%
U.S.
19%
Technology & OEMs
website: www.mphasis.com
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MphasiS: Key differentiators
Insurance highlights:
25+ active insurance clients
globally
 280+ active/completed
projects with total annual
revenues of US$81 million
 2,900+ resources across
applications, BPO, and ITO
with a combination of domain
experts (LOMA, CPCU, CII, III
certified) and technofunctional consultants
 Comprehensive portfolio of
consulting, business,
technology and infrastructure
services

Enterprise web technologies
highlights:
 Consists of following specific
COEs:
 Pega COE – For BPM
 Testing COE – Test
Automation
 Usability and Content
COE
 Open Source COE
Infrastructure assurance service
highlights:
 90 percent of MphasiS
Infrastructure services
workforce are ITIL trained
professionals
 Serves 70+ global clients
Vertical expertise – insurance
With over 2,900 employees and around US$81 million in revenue, MphasiS provides endto-end solutions and supports all processes in the policy life cycle from product definition to
claims settlement for property and casualty (P&C), life and annuities, and asset management.
MphasiS’ services footprint in insurance covers IT applications (application development,
maintenance and support, applications modernization, enterprise applications services, and
consulting), infrastructure management (data center, workplace, managed security), and BPO
(insurance policy servicing including claims processing and claims handling).
The company has successfully served over 25 insurance clients globally including insurance
industry leaders and Fortune 500 insurance companies. Further, MphasiS also has an
Insurance Center of Excellence (CoE) for building smart and innovative solutions for its
insurance clients.
Service expertise – enterprise web technologies
MphasiS’ enterprise web technologies practice offers comprehensive capability across the
entire Web technology spectrum. The practice comprises various areas of specialization
including enterprise portals, Web apps, enterprise content management, security and identity
management, eCommerce, open source, and Web 2.0 / social computing. These offerings
are developed around architectural frameworks that enable lower operating costs and time
to market, reduced business risks, enterprise scalability, and flexibility. These frameworks
include:
 Mframe framework – Series of Web development frameworks for building Web portals,
Web 2.0, and eCommerce applications
 Content management framework – Automates migration of content and metadata from
one (or more) content management system to another
 Flex component framework – Includes re-usable, robust, Flex controls that can be used
rapidly to create a presentation layer for rich Flex-based applications
Service expertise – infrastructure assurance service
Infrastructure assurance service is a combination of remote and onsite components and can
be deployed in business critical IT environments. MphasiS’ services include industry-standard
ITIL-compliant-based components such as asset management, component management,
batch monitoring, mobility management, carrier management, managed voice/wireless,
network, databases, desktops, servers, and storage. A key highlight of MphasiS’ infrastructure
assurance services is its platform-driven monitoring and management leveraging MOATIS (IP
owned by MphasiS) and customizable executive dashboards.
Further, 90 percent of MphasiS infrastructure services workforce are ITIL-trained professionals
and serve 70+ global clients. Its delivery centers in Bangalore, Mangalore, Chennai, Pune,
and Mumbai provide service desk and Level-3 support to clients on a range of enterprise
products and also process several hundred critical changes every month.
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Sonata Software: Company Profile
Summary assessment: Sonata’s
distinctive focus on solutions and
services for the Travel,
Transportation and Logistics (TTL)
vertical, Outsourced Product
Development (OPD) services for
the Hi-Tech and Technology
verticals, and a strong
Continental Europe-focused
service and delivery portfolio are
its key differentiators versus its
peers.
Company overview
Headquartered in Bangalore, Sonata Software Limited is an IT consulting and services
company with delivery centers in India and Germany. With ~13 percent compounded
annual growth since 2007, Sonata delivers services to clients across the United States,
Europe, Middle East, and the Asia-Pacific region. Sonata’s distinctive focus on solutions and
services for the Travel, Transportation and Logistics (TTL) vertical, Outsourced Product
Development (OPD) services for the Hi-Tech and Technology verticals, and a strong
Continental Europe-focused service and delivery portfolio are its key differentiators versus its
peers.
Revenues
US$ million
CAGR
13%
364
344
291
Established: 1986
203
Headquarters: Bangalore, India
Revenues (fY ending March
2010): US$291 million
Employees (as of March 2010):
2,801
Leadership:
 B Ramaswamy, President and
Managing Director
 P Srikar Reddy, EVP and
COO
Quality certifications:
ISO 9001: 2008
 ISO 20001
 SEI CMM: Level 5
 SEI CMMi: Level 3

Delivery locations:
 Germany (Hannover,
Salzgitter)
 India (Bangalore,
Hyderabad)
website:
www.sonata-software.com
Employees
2007
2008
2009
2010
2,242
2,546
2,706
2,801
Key service offerings






Services mix1
Percentage
Application development and maintenance
(ADM)
Managed testing
Business intelligence
Package implementation
Infrastructure management services (IMS)
Collaboration and knowledge management
services
IMS 39%
61% ADM (software
services including
R&D services)
Key business segments
Europe (primarily Continental Europe) is the largest market for Sonata followed by North
America, Middle East and rest of the world. In terms of client verticals, travel, transportation,
and logistics, and hi-tech and technology (especially Independent Software Vendors) are the
two primary focus vertical segments for Sonata. Sonata also serves enterprise IT clients in the
manufacturing, CPG, life sciences, construction, and retail segments.
Geographic mix2
Percentage
Vertical mix2
Percentage
Rest of the world
Asia Pacific
(including India) (2%)
5%
Enterprise IT
solutions
28%
48% Europe
Travel,
43% transportation
& logistics
North America 46%
Outsourced product
development
29%
1 Split-up figures by function are for IT consulting and services revenue (derived primarily from international corporations),
comprising 65 percent of total revenues. The remaining 35 percent is derived from licensing and re-selling of third-party software
to customers in India
2 Split-up figures are for offshore-based services revenue, driven from India to enable a one-to-one comparison. Continental
Europe-driven revenue is almost 95 percent from the travel vertical
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Sonata Software: Key Differentiators
TTL highlights:
900+ employees in TTL
 450+ nearshore employees based
out of client locations and delivery
centers in Hannover and Salzgitter
in Germany
 50+ people with industry or
domain certifications
 100+ travel projects delivered

OPD highlights:
Delivered OPD services to software
product companies since 1992
 1,000+ resources in the OPD
space
 Served 100+ product companies
 Alliances with Microsoft & Oracle

Vertical expertise – travel, transportation, and logistics (TTL)
With 43 percent of Sonata’s international services revenues and a joint venture with TUI AG, a leading
integrated travel company in Europe, Sonata Software is one of the largest Indian IT services providers in
TTL in terms of scale, focus, and domain expertise. Sonata offers a range of IT application and
infrastructure services to a variety of travel clients. Its experience in the travel vertical spans a range of
entities including tour operators, car rental companies, and travel agencies (brick and mortar, online);
airlines (scheduled, low-cost carriers, charter); travel software vendors; hotels; and other travel ancillary
services such as catering. While Sonata currently has a strong spike in servicing tour operators and travel
agencies, it expects airlines to be a key growth engine for the future.
Additionally, Sonata has developed multiple proprietary solution accelerators that enable faster, low-risk
technology adoption for travel companies. Some of Sonata’s solution accelerators in the TTL vertical are:
 SonnetPCI: PCI-DSS compliance for airlines
 Sonnet4Airlines: Collaboration portal for airlines
 ARMOR: Pricing Decision Support System
 SonnetTravel: e-commerce platform with Dynamic packaging engine for online travel businesses
Service-vertical expertise – outsourced product development for the high-tech and technology verticals
Sonata’s expertise in OPD spans enterprise products, embedded systems as well as online solutions, and
has a specialized array of services that meet the unique needs of each of these sub-segments. Sonata’s
services to product companies span all stages of the product life cycle including product management
architecture, development, quality assurance, sustenance, migration, localization/globalization, and
professional services.
Sonata’s confidence in its delivery capabilities is reflected in its willingness to offer risk-reward and outputbased pricing models in ISV engagements. Further, Sonata has also invested in proprietary solution
accelerators that offer reduced time to market and cost advantages for ISVs (e.g., SonnetTest: Test
Automation and pre-defined test framework; Crème: Crystal Reports Migration Solution, built on a
factory-based approach; Migration accelerators: VB6 to .NET and Test Labs: cloud-based performance
test labs). Additional highlights include:
 Sonata’s Quantified Agile approach – combines the Agile with distributed delivery – has evolved over
several successful ISV engagements. Leveraging its software product implementation experience with
end users, Sonata brings in several practical insights to help engineer better products. This also
uniquely equips Sonata to partner with ISVs not just on the engineering side but also on professional
services and go-to-market initiatives.
 Sonata has been a partner of choice for some of the technology majors on ISV platform adoption
initiatives such as Microsoft NXT partner and Oracle ISV migration partner.
Continental Europe Highlights:









Three data centers
4,000 MIPS of mainframe capacity
450 experienced professionals
200+ hosted applications
2,000+ UNIX/Windows servers
200 TB of SAN networks
ISO 20001 certified
196 ITIL certified professionals
Channel Partner for providing
subscription based SAP integrated
ERP Solution in Germany
Geographic expertise – Continental Europe
With close to 48 percent of offshore services revenues from Europe and a near-shore center in
Continental Europe, Sonata has demonstrated success in a market that traditionally was elusive for most
Indian service providers, irrespective of scale. Sonata has a fairly unique delivery model for serving
customers in Continental Europe – through TUI Infotec – a joint venture between Sonata and TUI AG
(Europe’s #1 travel & tour operator). The Sonata-TUI Infotec combination helps deliver a unique costeffective model that combines on-site, offshore and nearshore operations for customers in the region.
With 450+ experienced native German software professionals with a very good understanding of
German language and culture, they ensure “local “presence and “global” capabilities – a critical success
factor in that market
Sonata’s service offerings in the region include IT infrastructure management services including data
center services, application hosting, server monitoring and management, and 24x7 centralized helpdesks.
Within the region, Sonata successfully manages a complex IT infrastructure, covering over 8,000 users,
10,000+ support incidents, 20,000 software distributions per month, and provides multilingual support
in English and German.
Sonata leverages state-of-the-art infrastructure and data centers to provide application hosting services.
Sonata is one of four exclusive partners and the only Indian IT provider selected by SAP Deutschland AG
& Co for providing a subscription-based SAP Business All-in-One (BAiO) solution. In addition to offering
flexible engagement models such as shared services, Sonata offers transaction or usage-based pricing for
its infrastructure management services in the region.
Sonata has been associated with Microsoft’s SharePoint technology since its inception (“beta-stage”) and was an early adopter of IBM webSphere portal. Leveraging this
expertise, Sonata’s collaboration and knowledge management practice is also witnessing market traction. Sonata’s collaborative portal solutions provide a single
integrated platform for generating, sharing, and providing access to information through user friendly and simple user interfaces to enhance productivity and help
organizations innovate. with close to 300 professionals, Sonata has successfully completed over 100 customer engagements by leveraging pre-configured solution
accelerators, templates, and proven methodologies
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
Conclusion: Implications for Buyers and Service Providers
Tier-2 service providers had a significant role to play in the growth of the Indian
offshore IT market. Despite the challenges and uncertainty associated with this
segment of providers, through focused differentiation initiatives, Tier-2 service
providers can continue to play an important and meaningful role in the future.
However, the changing demand-and-supply dynamics in the offshore IT services
market hold important set of implications for global sourcing buyers and service
providers to effectively manage their interests in global services.
Implications for global sourcing buyers
 Recognize the importance and value of the large Tier-2 segment of the Indian
service provider landscape. Leveraged optimally, these service providers can
often deliver superior value in comparison to their larger counterparts.
 Invest time and effort to “cherry pick” Tier-2 service providers from the vast
landscape to enhance value capture in line with portfolio objectives.
 Define appropriate and realistic roles for Tier-2 service providers that align their
capabilities with desired sourcing outcomes and overall portfolio objectives.
 Proactively design plans to prevent service delivery disruption due to the
imminent consolidation and M&A in the Tier-2 service provider segment. In most
cases, Tier-2 service providers will be acquired by larger providers, which will
create “distractions” rather than “disruptions.”
Implications for Indian Tier-2 service providers
 Recognize the need for differentiation and specialization as critical factors for
survival in this intensely competitive marketplace as sub-scale “generalist”
service providers are unlikely to succeed in the future.
 Re-evaluate the portfolio of offerings to identify select core offerings / focus
segments that will drive differentiation compared to the broader marketplace
and serve as growth engines for the future.
 Build deep vertical-specific expertise to demonstrate differentiation in light of
increased buyer emphasis on industry knowledge for IT ADM services.
 Invest in targeted marketing and branding initiatives to build recognition and
recall with global buyers in areas of differentiation
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“SURVIVAL Of THE DIffERENTIATED” – THE NEw MANTRA Of SUCCESS fOR TIER-2 SERVICE PROVIDERS
About Everest
Everest Group is an advisor to business leaders on global services with a worldwide
reputation for helping Global 1000 firms dramatically improve their performance by
optimizing their back-and middle-office business services. With a fact-based
approach driving outcomes, Everest Group counsels organizations with complex
challenges related to the use and delivery of global services in their pursuits to
balance short-term needs with long-term goals. Through its practical consulting,
original research and industry resource services, Everest Group helps clients
maximize value from internal transformations, shared services, outsourcing and
blended model strategies. Established in 1991, Everest Group serves users of global
services, providers of services, country organizations and private equity firms, in six
continents across all industry categories. For more information, please visit
www.everestgrp.com and www.everestresearchinstitute.com.
for more information about Everest, please contact:
Everest Research Institute
+1-214-451-3110
info@everestresearchinstitute.com
for more information about this topic please contact the authors:
Amneet Singh, Vice President – Research
amneet.singh@everestgrp.com
Jimit Arora, Research Director
jimit.arora@everestgrp.com
Kiranjeet Kaur, Research Analyst
kiranjeet.kaur@everestgrp.com
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