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Mega-Deal Drives Outsourcing Market to Record Third Quarter

3Q11 Global TPI Index recorded total contract value of $25.1 billion, up 41 percent Underlying market performance steady with previous quarter, within historical norms
STAMFORD, Conn., October 13, 2011 TPI, an Information Services Group company (ISG) (NASDAQ:III) and the leading independent sourcing data and advisory firm in the world, today released data showing that a single acquisition-related mega-deal fueled a record surge in global outsourcing market performance during the third quarter. The 3Q11 Global TPI Index, which measures commercial contracts valued at $25 million or more, recorded total contract value (TCV) of $25.1 billion. The total, the highest-ever for a third quarter, represented an increase of 41 percent over the third quarter of 2010 and 31 percent over the second quarter of 2011. Excluding the $7.2 billion contract awarded by Siemens to Atos in conjunction with its acquisition of Siemens IT Solutions and Services, the Index tallied 192 contracts worth $17.9 billion. That puts the quarters performance above the average TCV of the five previous third quarters and in line with the previous period. This third quarter looks very similar to other third quarters and offers more of a business-asusual tale than a stunning growth story, said John Keppel, Partner & President, Information Services, ISG. Even excluding the Atos-Siemens contract, the underlying market performed at a consistent pace from last quarter. Now in its 36th consecutive quarter, the TPI Index provides a quarterly snapshot of the sourcing industry for clients, service providers, analysts and the media. It is the industrys authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

By scope, the TCV of contracts for IT Outsourcing (ITO) increased about 50 percent over the third quarter of 2010 and the second quarter of 2011, driven by the Atos-Siemens mega-deal. Excluding the mega-deal, ITO TCV was down 8 percent both year-over-year and sequentially. The value of contracts for Business Process Outsourcing (BPO) rose 18 percent year-over-year but dipped 4 percent sequentially. The growth in the value of the largest contracts has helped BPO surpass its full-year 2010 TCV already and the segment is on track for its best annual performance since 2008. Among industries, Financial Services saw its TCV rise modestly year-over-year. However, this sector, historically a leader in the outsourcing market, has been slowed by the consolidation that has taken place in recent years, and it looks unlikely to reach last years annual TCV of $27.7 billion. By region, Europe, the Middle East and Africa (EMEA) saw TCV increase 99 percent over a year ago and 47 percent quarter-over-quarter. Excluding the impact of the mega-deal, EMEA performance was up 4 percent year-over-year but down 23 percent sequentially. The Americas continued its muted performance in 2011 with TCV that was flat year-over-year and up 11 percent sequentially. The region will need to finish the year with $15 billion in TCV to match its 2010 tally, well above its $10 billion average in recent fourth quarters. Asia Pacific TCV dipped about 15 percent year-over-year but increased 20 percent sequentially, with the majority of contracts awarded in Australia and New Zealand. If they keep up their current pace, both Asia Pacific and EMEA will finish the year within range of their 2010 TCV levels. The third quarter witnessed a notable pickup in TCV, stoked primarily by the single acquisitionrelated contract, Keppel said. However, underlying market dynamics remain steady and we still project the global outsourcing market should end the year well within the historical norms. TPI will hold a conference call for analysts and journalists to discuss the 3Q11 Global TPI Index today at 11 a.m. EDT. For dial-in information, please visit http://www.tpi.net/web/researchinsights/tpi-index/.

About TPI TPI, an Information Services Group company, is the founder and innovator of the sourcing advisory industry and the leading independent sourcing data and advisory firm in the world. TPI advisors are expert at a broad range of business support functions and related research methodologies. Drawing on their deep functional domain expertise and extensive practical experience, they collaborate with organizations across all major industries to help them advance their business operations through the best combination of business process improvement, shared services, outsourcing and offshoring. For additional information, visit www.tpi.net. About Information Services Group Information Services Group (ISG), founded in 2006, is a leading technology insights, market intelligence and advisory services company. ISG has three go-to-market brands: TPI, the leading independent sourcing data and advisory firm in the world; Compass, the premier independent global provider of business and information technology benchmarking, performance improvement, data and analytics services; and STA Consulting, a premier

independent information technology advisor serving the public sector. The company has nearly 700 employees and operates in 21 countries. Based in Stamford, Conn., ISG has a proven leadership team with global experience in information-based services and a track record of creating significant value for shareowners, clients and employees. For additional information, visit www.informationsg.com.
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