2Q17 EMEA ISG Index

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Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic
or mechanical means, including information storage and retrieval devices or systems, without prior written
permission from Information Services Group, Inc.
EMEA Sourcing and
As-a-Service Market Insights
Hosted by: John King, Bank of America, Merrill Lynch
17 July 2017
SECOND QUARTER AND FIRST HALF 2017

ISG Confidential. © 2017 Information Services Group, Inc. All Rights Reserved 2
EMEA 2Q17
Covering the state of the
combined traditional
sourcing and as-a-service
industry for the EMEA
commercial market.
Welcome
to the 59th
Quarterly
EMEA
ISG Index
Barry Matthews
Partner, UK
Stanton Jones
Research Director and Principal Analyst
Friedrich Loeer
Partner, DACH

EMEA 2Q17
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase™
At a Glance
Global As-a-Service Approaching Parity
with Traditional Sourcing
As-as-Service now 41% of global market
and growing
2Q17 combined ACV reaches €7.5 billion, up
9%, fueled by As-a-Service growth of 32%
Americas ACV edges up as
strong growth in As-a-Service offsets
drop in traditional sourcing
EMEA and Asia Pacific both turn in
double-digit ACV growth
‘‘
Scorecard 2Q17 2Q Y/Y 1H17 1H Y/Y
ACV (€B)* Change ACV (€B)* Change
Global Commercial Combined Market € 7.5 9% € 15.8 10%
By Type Traditional Sourcing € 4.4 -3% € 9.3 -2%
As-a-Service € 3.1 32% € 6.5 36%
By Region Americas Commercial € 3.6 2% € 7.6 6%
EMEA Commercial € 2.8 13% € 6.3 13%
AP Commercial € 1.1 24% € 2.0 20%

EMEA 2Q17
Global Commercial Sector Contracting Trends
2Q17 Combined Market ACV up 9% Y/Y on strength in As-a-service; second-highest ever quarterly number of awards in Traditional Sourcing;
YTD, Combined Market ACV up 10% with As-a-Service increasing 36%, offsetting 2% decline in Traditional Sourcing.
Global Commercial Sector Quarterly ACV (€B)
Global Commercial Sector Half-Year ACV (€B) Global Commercial Sector Half-Year ACV by Type (€B)
€ 4.4
€ 5.0
€ 4.3€ 4.6€ 4.5€ 5.1
€ 5.9
€ 4.7€ 5.2
€ 4.2
€ 5.5
€ 4.7
€ 5.6€ 5.3
€ 3.1
€ 3.4
€ 3.2€ 2.6€ 2.3
€ 2.5
€ 2.3
€ 2.2€ 1.7
€ 1.6
€ 1.5
€ 1.5
€ 1.4€ 1.4
€ 7.5
€ 8.4
€ 7.5€ 7.2€ 6.8
€ 7.6
€ 8.2
€ 6.9€ 6.9
€ 5.8
€ 7.0
€ 6.2
€ 7.0€ 6.7
2Q171Q4Q3Q2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q14
Traditional Sourcing As-a-Service
€ 9.4€ 8.9€ 9.6€ 10.5€ 9.4€ 10.1€ 10.9
€ 6.5€ 5.8€ 4.8$5.5
€ 3.2€ 3.1€ 2.8
€ 15.9€ 14.7€ 14.4€ 15.0
€ 12.6€ 13.2€ 13.7
1H172H161H162H151H152H141H14
Tranditional Sourcing As-a-Service
€ 7.5
€ 1.9
€ 1.6
€ 4.9
€ 0
€ 2
€ 4
€ 6
€ 8
€ 10
ITO BPO SaaS IaaS
Range of 3 Prior 1Hs Avg of 3 Prior 1Hs 1H16 1H17

EMEA 2Q17
EMEA Commercial Sector Contracting Trends
Combined Market in EMEA rises 13% Y/Y with As-a-Service increase of 40% Y/Y;
Traditional Sourcing’s 5% growth Y/Y is boosted by a surge in ITO activity.
EMEA Commercial Sector Quarterly ACV (€B)
EMEA Commercial Sector Half-Year ACV (€B) EMEA Commercial Sector Half-Year ACV by Type (€B)
€ 2.0
€ 2.6
€ 2.1
€ 2.4
€ 1.9
€ 2.5
€ 3.2
€ 2.3€ 2.4
€ 1.9
€ 2.7
€ 2.2
€ 2.7€ 2.7 € 0.8
€ 0.9
€ 0.9€ 0.6
€ 0.6
€ 0.6
€ 0.6
€ 0.6€ 0.4
€ 0.4
€ 0.4
€ 0.4
€ 0.4€ 0.4
€ 2.8
€ 3.5
€ 3.0€ 3.0
€ 2.5
€ 3.1
€ 3.8
€ 2.9€ 2.8
€ 2.3
€ 3.1
€ 2.6
€ 3.1€ 3.1
2Q171Q4Q3Q2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q14
€ 4.6€ 4.6€ 4.4
€ 5.4
€ 4.4
€ 4.9
€ 5.4
€ 1.7€ 1.5€ 1.2
€ 1.1
€ 0.9
€ 0.9€ 0.8
€ 6.3€ 6.1€ 5.6
€ 6.5
€ 5.3€ 5.8€ 6.2
1H172H161H162H151H152H141H14
€ 3.5
€ 1.1
€ 0.4
€ 1.3
€ 0
€ 1
€ 2
€ 3
€ 4
€ 5
ITO BPO SaaS IaaS

EMEA 2Q17
EMEA Commercial Sector Industry Award Trends
YTD, most major sectors generate ACV growth in Traditional Sourcing and As-a-Service;
Manufacturing and Retail are the exceptions.
Traditional
Sourcing
TTM ACV (€B)
EMEA
Commercial
Industries
As-a-Service
TTM ACV (€B)
EMEA
Commercial
Industries
€ 1.47
€ 0.61
€ 0.77
€ 0.48
€ 0.61
€ 0.18
€ 0.11
€ 0.19 € 0.17
€ 0.0
€ 0.5
€ 1.0
€ 1.5
€ 2.0
Financial Services Manufacturing Energy Travel, Transport &
Leisure
Telecom & Media Business Services Retail Consumer Packaged
Goods
Healthcare &
Pharma
€ 0.31
€ 0.27
€ 0.10
€ 0.17 € 0.18
€ 0.29
€ 0.15 € 0.13 € 0.15
€ 0.0
€ 0.1
€ 0.2
€ 0.3
€ 0.4
€ 0.5
€ 0.6
Financial Services Manufacturing Energy Travel, Transport &
Leisure
Telecom & Media Business Services Retail Consumer Packaged
Goods
Healthcare &
Pharma

EMEA 2Q17
EMEA Sub-Regions - Traditional Sourcing Only
UK first-half ACV is the strongest in five years, and France ACV reaches a three-year high
DACH is down modestly while ACV in the Nordics plunges compared to the strong start to 2016
€ 1.01
€ 0.48
€ 0.40
€ 0.23
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
DACH Nordics France Southern Europe
€ 2.06
€ 0.0
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
U.K. & Ireland
EMEA Commercial Sector Sub Regions - Quarterly ACV (€B) – Traditional Sourcing Only

EMEA 2Q17
Our Contracts Knowledgebase™
is used to determine placements
based on the annual value of
commercial contracts
awarded in the past 12 months.
Traditional Sourcing Market
Atento
DATAGROUP SE
EPAM Systems
Grupo EULEN
Firstsource Solutions
Hexaware
Luxoft
MAYKOR
NNIT A/S
SIA S.p.A.
VirtusaPolaris
Webhelp
WNS
As-a-Service Market
Interxion
iomart Group
Capita
Carillion
Emcor Group
EVRY A/S
HCL
Interserve
Orange Business Services
Sopra Steria Group SA
Tech Mahindra
Tieto
Wipro
As-a-Service Market
Adobe Systems
Equinix
Iron Mountain
Salesforce.com
Accenture
Atos
BT
Capgemini
Cognizant
DXC Technology
IBM
Infosys
TCS
T-Systems/Deutsche Telekom
As-a-Service Market
Amazon Web Services
Google
Microsoft
Oracle
SAP
The Building 15 The Breakthrough 15The Big 15
Co. Revenues > $10 B
Sourcing Standouts
EMEA Co. Revenues $1 -10 B Co. Revenues < $1 B
Providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings.
the
ISG15

EMEA 2Q17
Americas Commercial Sector Contracting Trends
Commercial Market ACV is up 2% Y/Y; As-a-Service markets’ 27% increase is unable to offset the
13% Y/Y drop in Traditional Sourcing due to lack of large contract awards.
Americas Commercial Sector Quarterly ACV (€B)
Americas Commercial Sector Half-Year ACV (€B) Americas Commercial Sector Half-Year ACV by Type (€B)
€ 3.9€ 3.6
€ 4.3€ 4.3€ 4.1€ 4.3€ 3.9
€ 3.7€ 3.3€ 2.8€ 2.6€ 1.9€ 1.8€ 1.7
€ 7.6
€ 6.9€ 7.1€ 6.9
€ 6.0€ 6.1€ 5.6
1H172H161H162H151H152H141H14
€ 1.8
€ 2.1
€ 1.8€ 1.8
€ 2.1€ 2.2€ 2.3
€ 2.0
€ 2.3
€ 1.8
€ 2.2€ 2.1€ 2.1
€ 1.8
€ 1.8
€ 1.9
€ 1.8€ 1.5
€ 1.4€ 1.5€ 1.4
€ 1.3€ 1.0
€ 0.9
€ 0.9€ 0.9€ 0.8
€ 0.8
€ 3.6
€ 4.0
€ 3.6
€ 3.3€ 3.5€ 3.6€ 3.7
€ 3.2€ 3.3
€ 2.7
€ 3.1€ 3.0€ 2.9
€ 2.6
2Q171Q4Q3Q2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q14
€ 3.2
€ 0.7
€ 1.1
€ 2.6
€ 0.5
€ 1.5
€ 2.5
€ 3.5
ITO BPO SaaS IaaS

EMEA 2Q17
Americas Commercial Sector Industry Award Trends
Telecom, Healthcare and CPG mar good performance of Financial Services and smaller industries;
all industries in As-a-Service register double-digit growth.
Traditional
Sourcing
TTM ACV (€B)
Americas
Commercial
Industries
As-a-Service
TTM ACV (€B)
Americas
Commercial
Industries
€ 0.64
€ 0.47
€ 0.33
€ 0.82
€ 0.41
€ 0.28 € 0.27
€ 0.16 € 0.22
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
€ 1.4
Financial Services Manufacturing Healthcare &
Pharma
Business Services Telecom & Media Travel, Transport &
Leisure
Retail Energy Consumer Packaged
Goods
€ 1.02
€ 0.92
€ 0.46 € 0.45
€ 0.15
€ 0.36
€ 0.21 € 0.24
€ 0.12$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Financial Services Manufacturing Healthcare &
Pharma
Business Services Telecom & Media Travel, Transport &
Leisure
Retail Energy Consumer Packaged
Goods

EMEA 2Q17
Asia Pacific Commercial Sector Contracting Trends
Combined Market ACV up 24% Y/Y; Traditional Sourcing ACV sees its
best quarter since 2014 and sets all-time high in contract count.
AP Commercial Sector Quarterly ACV (€B)
AP Commercial Sector Half-Year ACV (€B) AP Commercial Sector Half-Year ACV by Type (€B)
€ 0.9€ 0.8€ 0.9€ 0.9€ 0.9€ 1.0
€ 1.6 € 1.1
€ 1.0€ 0.8€ 0.7€ 0.5€ 0.4
€ 0.4
€ 2.0
€ 1.7€ 1.6€ 1.5€ 1.4€ 1.4
€ 2.0
1H172H161H162H151H152H141H14
€ 0.6
€ 0.3€ 0.3€ 0.4€ 0.5
€ 0.4€ 0.4€ 0.4€ 0.5€ 0.4
€ 0.6
€ 0.4
€ 0.8€ 0.8
€ 0.5
€ 0.6€ 0.5€ 0.4€ 0.4
€ 0.4€ 0.3€ 0.3€ 0.2€ 0.2
€ 0.2
€ 0.2
€ 0.2€ 0.2
€ 1.1
€ 0.9€ 0.9€ 0.9€ 0.9
€ 0.8€ 0.8€ 0.8€ 0.7€ 0.7
€ 0.8
€ 0.6
€ 1.0€ 1.0
2Q171Q4Q3Q2Q161Q4Q3Q2Q151Q4Q3Q2Q141Q14
€ 0.70
€ 0.15
€ 0.17
€ 0.95
$0.0
$0.5
$1.0
$1.5
$2.0
ITO BPO SaaS IaaS

EMEA 2Q17
Asia Pacific Commercial Sector Industry Award Trends
Strong ITO and IaaS drive growth in the larger verticals of Financial Services and Energy;
drop in Traditional Sourcing impacts Telecom and Manufacturing.
Traditional
Sourcing
TTM ACV (€B)
Asia Pacific
Commercial
Industries
As-a-Service
TTM ACV (€B)
Asia Pacific
Commercial
Industries
€ 0.17
€ 0.11
€ 0.18
€ 0.09
€ 0.15
€ 0.05 € 0.05
€ 0.02
€ 0.00
€ 0.00
€ 0.05
€ 0.10
€ 0.15
€ 0.20
€ 0.25
€ 0.30
Manufacturing Telecom & Media Financial Services Travel, Transport &
Leisure
Energy Business Services Consumer Packaged
Goods
Retail Healthcare &
Pharma
€ 0.16
€ 0.11
€ 0.18
€ 0.09
€ 0.05
€ 0.30
€ 0.07 € 0.08 € 0.08
€ 0.0
€ 0.1
€ 0.2
€ 0.3
€ 0.4
€ 0.5
€ 0.6
Manufacturing Telecom & Media Financial Services Travel, Transport &
Leisure
Energy Business Services Consumer Packaged
Goods
Retail Healthcare &
Pharma

EMEA 2Q17
The Next Wave of Digitization and Automation
Stanton Jones
Research Director and Principal Analyst
2Q17 Index Inside Track from

EMEA 2Q17
Automation Effect is Kicking In
Provider are Employing Big LeversDigitization Impacts Providers
▪ Revenue growth slowing
▪ Average revenue per employee down
▪ Net income percentage declining
AutomationStaff Needs to
Skill-up
Buyers Demand Increased Productivity and Cost Avoidance
2X
1ISG surveyed 500+ global business and IT leaders
Double investments in Automation and AI over next
2 years on mission-critical business processes1
May reduce demand for outsourcing/offshoring
With an Automation Solution,
Productivity Soars Over 2 Years2
2Click here for ISG Automation Index
TraditionalAutomation
5-10%
24-80%

EMEA 2Q17
Build or Partner?
Services providers need automation capabilities.
Do they build it, find a partner or do both?
Business Process Automation Capability
▪ Replicate every human action
▪ RPA Technology Partnerships with vendors
like Blue Prism, Automation Anywhere and
UI Path
Move from operating model where people follow a tech supported process,
to one where technology follows a process supported by people.
IT Ops Automation Capability
▪ Replicate service desk agents, DBAs
and systems administrators.
▪ Autonomics Technology Partnerships
with vendors like IPSoft, Arago, and
Ayehu.
Cognitive Automation Capability
▪ Natural Language Processing vendors like Artificial
Solutions and Celaton
▪ Cognitive agents like Nuance and Cognicor
▪ Image Recognition vendors like Abbyy and Anyline.
A wholistic automation competency is critical to the long-term success of every provider.

EMEA 2Q17
2Q and 1H 2017 ISG Index - Global Summary and Outlook
● Y/Y, 2Q Commercial EMEA and Asia Pacific growth in double-digits, with marginal Americas growth
● YTD, IaaS grows by mid-double digits across all regions, while ITO had moderate gains in both EMEA and
Asia Pacific.
● Several industries are driving YTD growth including Financial Services and smaller verticals of
Transportation and CPG; Energy produces positive results after several soft years.
● Looking ahead, we continue to see double-digit growth in As-a-Service in the Americas and Asia Pacific.
We expect Infrastructure-as-a-Service will continue to outpace Software-as-a-Service. We forecast
growth of 24% and 12%, respectively, in those markets. Firms such as AWS and Microsoft will continue
to invest in new economies. We expect Traditional Sourcing will remain flat through the end of the year.
● In EMEA, we forecast Infrastructure-as-a-Service and Software-as-a-Service to remain fairly flat. And we
expect to see mid-single-digit growth in Traditional Outsourcing for the year, based on current deal flow
in the market that should support a strong second half in Europe.
Summary
Outlook

EMEA 2Q17
isg-one.com
Learn More
Paul Reynolds
Partner, Chief Research Officer
ISG Momentum
+1 508 625 2194
paul.reynolds@isg-one.com
Barry Matthews
Partner
+44 7881 954 710
barry.matthews@isg-one.com
Tara Benham
Cohn & Wolfe for ISG
+44 (0) 20 7331 5395
Tara.benham@cohnwolfe.com
Denise Colgan
EMEA and AP Media Contact
+44 1737 371523
denise.colgan@isg-one.com
Bill McNee
Partner
ISG Insights
+1 203 820 8987
bill.mcnee@isg-one.com

GLOBAL 4Q16
EMEA 2Q17
Appendix: Score Card for TCV
SECOND QUARTER AND HALF YEAR 2017

EMEA 2Q17
2Q and 1H 2017 TCV Scorecard
The ISG Index has moved to ACV as the primary measure of the Broader Market.
We will continue to provide a high-level TCV view of the market via a Scorecard analysis.
*Contracts with TCV ≥ €20M from the ISG Contracts Knowledgebase™
Scorecard
2Q17 2Q Y/Y 1H17 Y/Y
TCV (€B)* Change TCV (€B)* Change
Global Commercial Combined Market € 18.6 -10% € 41.0 1%
By Type Outsourcing € 13.8 -18% € 31.3 -3%
As-a-Service € 4.7 24% € 9.7 17%
ITO € 11.2 -14% € 23.7 6%
BPO € 2.7 -31% € 7.6 -24%
IaaS € 2.2 43% € 4.8 62%
SaaS € 2.5 10% € 4.9 -9%
By Region Americas Commercial € 7.6 -22% € 16.8 -6%
EMEA Commercial € 8.1 -7% € 19.7 11%
Asia Pacific Commercial € 2.9 31% € 4.5 -10%

ISG Confidential. © 2017 Information Services Group, Inc. All Rights Reserved.
Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic
or mechanical means, including information storage and retrieval devices or systems, without prior written
permission from Information Services Group, Inc.
isg-one.com
ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory
firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the
world, ISG is committed to helping corporations, public sector organizations, and service and technology
providers achieve operational excellence and faster growth. The firm specializes in digital
transformation services, including automation, cloud and data analytics; sourcing advisory; managed
governance and risk services; network carrier services; technology strategy and operations design;
change management; market intelligence and technology research and analysis. Founded in 2006, and
based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20
countries—a global team known for its innovative thinking, market influence, deep industry and
technology expertise, and world-class research and analytical capabilities based on the industry’s most
comprehensive marketplace data.

2Q17 EMEA ISG Index

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