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8 ANNUAL<br />
THE GROUP<br />
<strong>Capgemini</strong><br />
TME at <strong>Capgemini</strong>. As well as the price war, the competition<br />
is also fighting tooth and nail over service quality, the key to<br />
obtaining customer loyalty and a prerequisite for selling yet<br />
more services. This trend is making for increased complexity<br />
in customer relations. Finally, as well as introducing these<br />
new services, operators are turning their attentions to emergent<br />
countries as an avenue for revitalizing their growth. Vodafone is<br />
an example of this, in India.<br />
Taking stock of 2006. Against this background, <strong>Capgemini</strong>,<br />
on the strength of its great knowledge of the sector and its<br />
technological expertise, is helping the operators to define their<br />
strategies with regard to the new services, to manage their launches<br />
and to find new business models that will guarantee the<br />
operators’ revenues and growth of their margins. The Group is<br />
also involved, via dedicated service centers, in the development<br />
and consolidation of customer billing systems. These centers<br />
make it possible to leverage the benefits of knowing the IT system<br />
inside-out while guaranteeing efficient integration between<br />
the system components, so that the operators will be able to<br />
measure and profit from all the aspects of convergence. “What<br />
is more, targeted outsourcing focused on specific applications or<br />
BPO is starting to make an appearance in Europe”, Didier Bonnet<br />
points out. It is also the case that new web service and mobile<br />
providers could end up outsourcing their billing and their customer<br />
management.<br />
Prospects for 2007. In light of the anticipated boom in convergence<br />
services, <strong>Capgemini</strong> will be looking to underpin its business<br />
and technological capacities in certain market segments.<br />
This will include, in particular, the creation of dedicated telecom<br />
centers in Morocco and India, using specialized structures in<br />
order to provide operators with the advantages of our Rightshore<br />
approach. Last but not least, the Group is also intending to play<br />
a key role as intermediary between the operators and the content<br />
producers – those who supply the content for the convergent<br />
services – via Digital Media Delivery, an entity of <strong>Capgemini</strong><br />
dedicated to the management of digital content.<br />
IV - THE IT SERVICES MARKET<br />
AND COMPETITION<br />
A) Market size and forecasts by segment<br />
2006 – 2010<br />
Continued economic recovery and sustained expenditure<br />
outside of IT organizations enabled continued growth in IT<br />
expenditure in 2006. Investment in innovation is more widespread<br />
than in recent years although many businesses remain<br />
focussed on improving internal processes and reducing costs.<br />
REPORT 2006 <strong>Capgemini</strong><br />
Global delivery models meet both of these needs by enabling<br />
purchasers to draw effective benefits from labor arbitration,<br />
which stimulates some demand for services that would otherwise<br />
be unaffordable, while dampening spending growth for<br />
many services that now cost less. Basic outsourcing (process<br />
and IT management) is still the prime source of growth, as<br />
illustrated by the following histogram.<br />
Worldwide IT Services<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
54.9<br />
204.0<br />
163.9<br />
99.8<br />
62.6<br />
231.3<br />
189.2<br />
116.1<br />
Consulting (CS)<br />
Development & Integration (TS & LPS)<br />
IT Management (OS)<br />
Process Management (BPO)<br />
in billions of U.S. dollars<br />
700<br />
71.0<br />
2006 2008 2010<br />
259.3<br />
218.4<br />
137.2<br />
Source : Gartner – Forecast : IT Services, Worldwide, 2003 – 2010 (update),<br />
30/11/2006<br />
B) The competition<br />
1) Worldwide ranking<br />
Although this is not an exact science, as the taxonomy is not<br />
precisely standardized, worldwide classicification of the top ten<br />
IT services companies illustrates two particularities.<br />
First of all, the US - with seven companies - has been largely<br />
dominating this market for several years now. Only two Asian<br />
groups and one European group, namely <strong>Capgemini</strong>, have<br />
managed to hoist themselves among the Top 10 to date. In light<br />
of the market share held by each individual player, although<br />
large international groups are involved, it is noted that this<br />
IT service market has remained very piecemeal despite the<br />
successive waves of consolidation. The following table provides<br />
a classification of the top ten IT services companies worldwide
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