Zinnov | Confidential

Zinnov Introduction

September 2014

Zinnov | Confidential

Started in 2002 with a focus on helping technology organizations globalize their operations

Operations in Silicon Valley, Houston, Bangalore, Beijing, Singapore and Delhi 120 consultants spread across these locations

Evolution

Service offering

Customer Type

Focus Areas R&D Innovation Talent

Global Technology Firms

Indian Technology Firms

Government Associations

Balanced globalization

Setup strategy

Growth strategy

GAP Business

Transformation

Technology

Zinnov is one of the world’s leading management consulting firms

with a focus on helping organizations globalize their business

Zinnov | Confidential

Clientele Vertical

Semiconductor/CE

Manufacturing R&D

Enterprise software companies/ storage

Companies

Telecom and Networking

Zinnov’s consulting clientele has a heavy representation from the top 10 of

each industry vertical (illustrative list)

Zinnov | Confidential

Zinnov is a globalization advisory firm with strong capabilities in defining the

globalization roadmap for organizations

Engineering

& IT

Excellence

Globalization

Strategy Review

& Definition

Location

Analysis &

Captive Set Up

Sourcing

Strategy, Vendor

Selection &

Vendor

Management

Globalization

Accelerator

Platform

Industry

benchmarks and

frameworks

Networking

opportunity with

peers

Thought leadership

and on demand

insights

Branding

opportunities

Business

Strategy &

Expansion

Business

Strategy

Account

Management

M&A/Operation

s Optimization

Customer

Connect

Emerging

Markets

Direct Sales

Maximization

Channel Design

and Monitoring

Solution

Ideation

Opportunity

Assessment &

Go to Market

Service Offerings

Zinnov | Confidential

Insight Snippets 1

Agenda

5

6x faster growth compared to overall IT market

Use cases across all industry verticals: Banking, Insurance, Retail, Media etc.

“U.S could face a shortage of up to 190,000 workers with deep analytical skills by 2018”

The talent supply in the US will be inadequate to meet the future demand for emerging skillsets like Big Data

“Demand for deep analytical talent in the United States could be 50 to 60% greater than its projected

supply by 2018”

“1.5 million additional managers and analysts required in the US with capability to ask the right

questions and consume the insights from Big Data”

Significant Big Data and Analytics Talent shortage

6 Source: Wikibon Report on Big Data Market 2013; Talent shortage details are from the McKinsey report: Big Data: Next frontier in Innovation, competition and productivity

$7.3

$11.8

$18.6

$28.5

$38.4

$45.3

$50.1

2011 2012 2013 2014 2015 2016 2017

Big Data Market Forecast 2011-2017 ($ Bn)

Median Age by Country, 2020

Median Software Developer Salaries (in USD)*

48.2 44.6

40.4 39.8 38.1 37.9 33.4 31.4

28.1

Japan Western Europe UK Russia China USA Brazil Indonesia India

20.1

19,850 27,900

49,100 29,350 39,250

63,200 57,850 63,850 76,000

129,600 142,250

166,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

Bangalore Shanghai São Paulo Bay Area *Average years of work experience considered was 5 years.

Cost of talent in US will continue to be significantly higher than in emerging countries like China and India

7 Source: Zinnov Research & Analysis

Amazon has a satellite in London and centres of excellence in Berlin (Machine Learning), Bangalore (Machine Learning and Global Payments) and Cape Town (Amazon Web Services)

Samsung has a large R&D presence in the Bay Area, Bangalore and has growing engineering teams in underpenetrated, emerging locations such as Kiev, Ukraine and Dhaka, Bangladesh.

Intuit is building products in India for India – its products are customized and sold to Small and Medium Businesses across India.

Facebook is running global initiatives to increase internet penetration worldwide and acquiring companies that make accessing the internet easier from feature phones.

Google and Microsoft are sponsoring an initiative via the Indian IT industry body NASSCOM to fund 10,000 domain specific start-ups with angel funding of $50k-$300k, access to mentors and 3-4 months of incubation support.

Samsung’s Catalyst Fund has been investing in Indian start-ups. For example, in April’14 it invested in Ineda, a Hyderabad-based wearable devices chip start-up.

MNCs are already reacting by globalizing their talent pool, tapping emerging markets and engaging with local eco-systems

8 Source: Zinnov Research & Analysis

US based companies will have to globalize to manage the talent shortage for emerging skillsets

9

Talent in US for emerging skillsets will be inadequate and expensive to meet future demand

MNCs are already reacting by globalizing their talent pool for emerging skillsets

Need for Globalization Purpose of Study

What is the current geographical distribution of emerging skillsets? What will it be in the future?

What are the drivers controlling the future geographical distribution of talent for emerging skillsets?

What are the emerging skillsets driving IT growth?

Have peer companies started reacting to the impending talent shortage in the US for emerging skillsets?

What should Microsoft’s global engineering footprint look like for the emerging skillsets?

The future market growth in IT will come from emerging countries such as China and India

India and China’s employable STEM talent graduating from universities every year will overtake the USA by 2030

Annual STEM Graduates Heat Map: 2013-2030

Although actual STEM talent graduating in India and China each year are approx. 1.2 and 3 million respectively, employability rates of ~25% and ~15% substantially reduce the employable talent pool

As investment in education increases in India and China, the employability rates will also go up drastically, contributing to an even higher rate of growth in annual STEM graduates

Developed countries such as USA, UK and Canada, while enjoying a high employability ratio, do not have a young population, and fails to attract them towards STEM education adequately to meet future demand

STEM Talent Drivers

10

37 37 38 38

336 342 348 355

128 130 131 133

297 314 331 349

394 419 445 473

USA

Canada

UK

India China

Annual STEM Talent graduating in Country

that year (‘000)

2013202020252030

Source: Zinnov Research and Analysis

Annual STEM Talent Growth Rate (CAGR)

2013-30

India and China will add YoY twice as many software product development engineers between 2013 and 2030 as compared to the USA

Software Product Development Talent Heat Map: 2013-2030

The MNC software companies like IBM, Oracle, HP, SAP are the top SPD employers across geos.

SPD talent in India is employed by MNC software companies as well as domestic IT firms such as Infosys, TCS

Chinese SPD talent is engaged by MNC software companies and domestic firms such as Tencent, Baidu

TALENT FOCUS

11

51 55 58 61

626 711

780 854

32 35 37 39

173

253

331

434

148

227

308

418

USA

Canada

UK

India China

Installed Software Product

Development Talent in Country (‘000)

2013202020252030

Median Salary for Software Developer in 2030 ($)

200k

175k

225k

60k 80k

Source: Zinnov Research and Analysis Note: University STEM talent growth rates have been used for calculating the 2030 installed talent

Refer to slide notes for a

definition of Software Product

Development

Big Data and related skill-sets talent in India and China will surpass the US by 2030 with comparable quality, greater scalability and lower costs

Big Data and related skill-sets Talent Heat Map: 2013-2030

Large local companies in India and China are hiring Big Data Analytics and Deployment talent

MNCs such as Google, IBM etc.. are tapping emerging countries for talent and market

Global VC firms in India and China are accelerating the growth of the local startup ecosystem

TALENT FOCUS

Big Data and related skill-sets: Big Data, Machine Learning, Language Processing, Video/Audio

12

12 18 23 29

133 187

239 306

20 47 87

160

31 77

147

281

34 92

184

371

USA

Canada

UK

India China

Installed Big Data & Big Data Application

Talent in Country (‘000)

2013202020252030

140

Professionals with 10+ years experience in 2030 (‘000)

Median Salary for Software Developer in 2030 ($)

200k

9

175k 30

225k

53

60k

12

80k

Source: Zinnov Research and Analysis Note: University STEM talent growth rates have been used for calculating the 2030 installed talent

India will greatly increase its ‘high quality at a low cost’‘ Security/Privacy deployment and development talent pool by 2030

UK

India China

Canada

USA

99 140

179 229

7 9 11 13

13

Security/Privacy Talent Heat Map: 2013-2030

2013202020252030

Professionals with 10+ years experience in 2030 (‘000)

Median Salary for Software Developer in 2030 ($)

The US Govt. is hiring security/privacy talent, and employs 20-30% of the current US talent

Financial nerve-centers such as New York, London and Toronto are hotbeds for security/privacy talent

India’s Security/Privacy talent is growing in Security Solutions Deployment and Development

23 31 38 47

16 35 61 107 5 12 22 39

Installed Security/Privacy Talent in Country

(‘000)

77

4

15

37 41

200k

175k

225k

60k 80k

TALENT FOCUS

Source: Zinnov Research and Analysis Note: University STEM talent growth rates have been used for calculating the 2030 installed talent

Android/iOS talent in India and China is increasing rapidly with a focus on 3rd party mobile app development and localization of mobile apps

UK

India China

Canada

USA

191

270

344

440

14

60 130

226

396

32 73

133

240

29 39 49 60 18 23 27 32

2013202020252030

Professionals with 10+ years experience in 2030 (‘000)

Median Salary for Software Developer in 2030 ($)

The US, UK, Canada talent is driven by the presence of large markets for paid apps in these countries

The need for localization of apps for China is driving the Android/iOS talent pool

India’s growth in app development is driven by service providers such as Infosys and TCS

Installed Android/iOS Talent in Country

(‘000)

130

24

40

130 75

Android/iOS Talent Heat Map: 2013-2030

200k

175k

225k

60k 80k

TALENT FOCUS

Source: Zinnov Research and Analysis Note: University STEM talent growth rates have been used for calculating the 2030 installed talent

Growth of Design talent for enterprise software will be substantial in India and China with a large talent base available by 2030

UK

India China

Canada

USA

15

22 40 61 93 9 20 36

66

163 230

294 376

17 22 25 30

27 37 46 57

Design Talent Heat Map: 2013-2030

2013202020252030

Professionals with 10+ years experience in 2030 (‘000)

Median Salary for Software Developer in 2030 ($)

Rapid growth in the mobile app and gaming industry is driving design talent growth globally

India and China’s design talent growth is focused in software UI/UX design and mobile app UI/UX design

US, UK and Canada’s design talent is spread across software UI/UX design, product design, mobile app UI/UX design, game designers and webpage designers

Installed Design Talent in Country

(‘000)

230

21

37

40 20

200k

175k

225k

60k 80k

TALENT FOCUS

Source: Zinnov Research and Analysis Note: University STEM talent growth rates have been used for calculating the 2030 installed talent

16

US has good quality talent across the skill-sets but average scalability and very high costs

Skill-set Demand Drivers Supply Drivers

Domestic Market Employer Industries Talent Quality Talent Scalability# Cost Benefits

Big Data and related skill-sets*

US has the largest Big Data market

MNC Tech Cos. IT Service Providers

US has high quality talent in big data software and

analytics

Average scalability due to average fresh university

talent supply

US has among the highest talent cost for the given

talent quality

Security/Privacy

US has the largest Security/Privacy market

Govt. Agencies MNC Tech Cos.

Banks and Financial Cos.

US has high quality talent in security software

development

Average scalability due to average fresh university

talent supply

US has among the highest talent cost for the given

talent quality

Android/iOS

US has the largest market for paid apps

MNC Tech Cos. Gaming Cos.

US has high quality talent in android/iOS across the

tech. stack

Average scalability due to average fresh university

talent supply

US has among the highest talent cost for the given

talent quality

Design

US has the largest market for design

MNC Tech Cos. Gaming Cos.

US has high quality talent in product, mobile app and

game design

Average scalability due to average fresh university

talent supply

US has among the highest talent cost for the given

talent quality

*Big Data and related skill-sets: Big Data, Machine Learning, Language Processing, Video/Audio # Talent Scalability: Refers to the incremental fresh talent pool coming in from universities

Source: Zinnov Research and Analysis

Google has 34 R&D centers spread across the globe Google’s product strategy is market driven and it has established global R&D centres to access talent as well as access regional market insights.

Source: Annual reports, Zinnov Research and Analysis

17

• Google has a Hub and Spoke model. Google’s product ownership is distributed across two hubs - Mountain View, and New York and these centres manage work allocation to satellites and outposts.

• Selected on basis of talent availability or market needs. • Usually small outposts with regional objectives. As these outposts

grow in engineering maturity, they might evolve into satellites.

• Access to quality talent in key skillsets across geographies. • Growing its R&D presence in outposts across emerging markets,

gives Google local insights that feed into products and services for these regions.

• A presence across geographies helps building with brand-building especially among regions where it is trying to increase internet penetration.

• Lack of critical mass in many satellite and outposts make it difficult

for Google to retain quality engineering talent. For instance, senior leadership in Google India have either left the organization or moved back to HQ.

• Lack of strong leadership in emerging markets has hindered Google’s ability to compete with its local peers – for instance, Baidu in China.

Headquarters

Engineering Hub

Satellite

Outpost

Talent

Market Insight

Cost

Acquisition

• Google is driving growth in emerging markets by engaging customers through its marketing teams. Its strategy involves connecting more consumers (through low-cost mobile phones and tablets) creating more regional content (open source fonts, voice recognition, and getting small business online.

Google has 34 R&D centers spread across the globe

Source: Annual reports, Zinnov Research and Analysis

Facebook has a product driven strategy and its R&D model is geared towards accessing talent in large technology ecosystems.

Facebook has an engineering hub in Menlo Park, CA where much of the R&D is concentrated. It distributes engineering activities to its outposts in the US, UK and Israel while retaining product ownership.

Facebook has an R&D presence in the three largest technology clusters worldwide – Bay Area, New York, London.

Facebook also establishes an R&D presence as a consequence of acquisitions. (Eg: Tel Aviv, Israel)

Facebook spearheaded internet.org – a project to make affordable access to basic internet services available to every person in the world. In India, Facebook recently crossed 100M active users and Facebook is focusing on driving user monetization through its local sales and marketing teams.

18

Headquarters / Engineering Hub

Engineering Hub

Satellite

Outpost

Talent

Market Insight

Cost

Acquisition

Facebook does not have R&D teams in global locations to serve as listening posts. Nevertheless, the Facebook platform is able to track, consolidate and analyse data from users across global locations.

Collocated R&D teams results in quicker decision-making, agility in development and quicker time to market.

A presence in key technology clusters gives Facebook access to quality engineering talent.

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