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MarketLine Industry Profile

IT Services in South Africa

April 2020

Reference Code: 0044-2313

Publication Date: April 2020

WWW.MARKETLINE.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED

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IT Services in South Africa

Industry Profiles

1. Executive Summary

1.1. Market value

The South African IT services industry grew by 10.7% in 2019 to reach a value of $7.7 billion.

1.2. Market value forecast

In 2024, the South African IT services industry is forecast to have a value of $13.1 billion, an increase of 70.1% since 2019.

1.3. Category segmentation

Infrastructure services is the largest segment of the IT services industry in South Africa, accounting for 58.1% of the industry's total value.

1.4. Geography segmentation

South Africa accounts for 0.6% of the global IT services industry value.

1.5. Market rivalry

The IT services industry is evolving from offering services such as outsourcing, which improve productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to capture a share of these higher margin sectors.

1.6. Competitive Landscape

The South African IT services industry has experienced strong growth overall during the historic period. The industry consists of four main leaders, Accenture plc, International Business Machines Corporation, Hewlett Packard Enterprise Company and Capgemini SE. The industry leaders are based in Ireland, the US and France, indicating the well- diversified regions the industry players are operating from. Most of the leading players in the market have a strong presence in the market, which was gained through diversified product portfolio, strong research and development (R&D) capabilities and strong geographic presences. In addition, the IT services industry in general consists of debt offerings, acquisitions and finance ventures, as it is the primary characteristic of companies operating in this market and one of the most important techniques of raising capital.

IT Services in South Africa

Industry Profiles

TABLE OF CONTENTS

1. Executive Summary2

1.1. Market value ................................................................................................................................ 2

1.2. Market value forecast .................................................................................................................. 2

1.3. Category segmentation ............................................................................................................... 2

1.4. Geography segmentation ............................................................................................................ 2

1.5. Market rivalry ............................................................................................................................... 2

1.6. Competitive Landscape ............................................................................................................... 2

2. Market Overview7

2.1. Market definition .......................................................................................................................... 7

2.2. Market analysis ............................................................................................................................ 7

3. Market Data9

3.1. Market value ................................................................................................................................ 9

4. Market Segmentation10

4.1. Category segmentation ............................................................................................................. 10

4.2. Geography segmentation .......................................................................................................... 11

5. Market Outlook12

5.1. Market value forecast ................................................................................................................ 12

6. Five Forces Analysis13

6.1. Summary ................................................................................................................................... 13

6.2. Buyer power ............................................................................................................................... 14

6.3. Supplier power ........................................................................................................................... 16

6.4. New entrants .............................................................................................................................. 17

6.5. Threat of substitutes .................................................................................................................. 19

6.6. Degree of rivalry ........................................................................................................................ 20

7. Competitive Landscape21

7.1. Who are the leading players? .................................................................................................... 21

IT Services in South Africa

Industry Profiles

7.2. What strategies do the leading players follow? ......................................................................... 21

7.3. What strategies do the leading players follow (continued)? ...................................................... 22

7.4. What has been the recent M&A activity? .................................................................................. 23

8. Company Profiles25

8.1. International Business Machines Corporation ........................................................................... 25

8.2. Accenture plc ............................................................................................................................. 31

8.3. Capgemini SE ............................................................................................................................ 36

8.4. Hewlett Packard Enterprise Company ...................................................................................... 40

9. Macroeconomic Indicators44

9.1. Country data .............................................................................................................................. 44

Appendix 46

Methodology ............................................................................................................................................. 46

9.2. Industry associations ................................................................................................................. 47

9.3. Related MarketLine research .................................................................................................... 47

About MarketLine ..................................................................................................................................... 48

IT Services in South Africa

Industry Profiles

LIST OF TABLES

Table 1: South Africa IT services industry value: $ billion, 2015–19 9

Table 2: South Africa IT services industry category segmentation: $ billion, 2019 10

Table 3: South Africa IT services industry geography segmentation: $ billion, 2019 11

Table 4: South Africa IT services industry value forecast: $ billion, 2019–24 12

Table 5: International Business Machines Corporation: key facts 25

Table 6: International Business Machines Corporation: Annual Financial Ratios 28

Table 7: International Business Machines Corporation: Key Employees 29

Table 8: International Business Machines Corporation: Key Employees Continued 30

Table 9: Accenture plc: key facts 31

Table 10: Accenture plc: Annual Financial Ratios 33

Table 11: Accenture plc: Key Employees 34

Table 12: Accenture plc: Key Employees Continued 35

Table 13: Capgemini SE: key facts 36

Table 14: Capgemini SE: Annual Financial Ratios 37

Table 15: Capgemini SE: Key Employees 38

Table 16: Capgemini SE: Key Employees Continued 39

Table 17: Hewlett Packard Enterprise Company: key facts 40

Table 18: Hewlett Packard Enterprise Company: Annual Financial Ratios 41

Table 19: Hewlett Packard Enterprise Company: Key Employees 42

Table 20: Hewlett Packard Enterprise Company: Key Employees Continued 43

Table 21: South Africa size of population (million), 2015–19 44

Table 22: South Africa gdp (constant 2005 prices, $ billion), 2015–19 44

Table 23: South Africa gdp (current prices, $ billion), 2015–19 44

Table 24: South Africa inflation, 2015–19 44

Table 25: South Africa consumer price index (absolute), 2015–19 45

Table 26: South Africa exchange rate, 2015–19 45

IT Services in South Africa

Industry Profiles

LIST OF FIGURES

Figure 1: South Africa IT services industry value: $ billion, 2015–19 9

Figure 2: South Africa IT services industry category segmentation: % share, by value, 2019 10

Figure 3: South Africa IT services industry geography segmentation: % share, by value, 2019 11

Figure 4: South Africa IT services industry value forecast: $ billion, 2019–24 12

Figure 5: Forces driving competition in the IT services industry in South Africa, 2019 13

Figure 6: Drivers of buyer power in the IT services industry in South Africa, 2019 14

Figure 7: Drivers of supplier power in the IT services industry in South Africa, 2019 16

Figure 8: Factors influencing the likelihood of new entrants in the IT services industry in South Africa, 2019

Figure 9: Factors influencing the threat of substitutes in the IT services industry in South Africa, 2019 19

Figure 10: Drivers of degree of rivalry in the IT services industry in South Africa, 2019 20

IT Services in South Africa

Industry Profiles

2. Market Overview

2.1. Market definition

The IT services industry is valued as the combination of the business process outsourcing (BPO) services market, the application services market and the infrastructure services market. Values include revenues generated from (a) signed deals that remain under contract and (b) new contracts signed within that particular calendar year.

The BPO services market is defined as the reveues from services related to the following segments: customer relationship management (CRM), finance and accounting, human resources, knowledge process outsourcing, and procurement and supply-chain.

The application services market is defined as the revenues from services related to the following segments: application development, application management and application performance monitoring.

The infrastructure services market is defined as the revenues from services related to the following segments: cloud computing, data center & hosting services, IT management, security and storage.

All currency conversions are at constant 2019 annual average exchange rates.

For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific, Middle East, South Africa and Nigeria.

North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Peru.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden.

Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

2.2. Market analysis

The South African IT services industry experienced very strong growth during the historic period, which is expected to continue over the forecast period, with slight variations due to the COVID-19 outbreak.

The IT services industry is highly correlated with the gross domestic product (GDP) of a country. This means that the IT services industry will move according to GDP growth, due to their positive correlation. In addition, as technological advantages are increasing by the year, many businesses are employing IT services of some sort, most importantly IT infrastructure services, in order to be fully functional and competitive. Thus, the IT services industry follows the same curve as technology does, which means that the IT services industry will be growing as technology grows, with slight variations from country to country; however, the industry’s growth rates will still be significant.

The South African IT services industry had total revenues of $7.7bn in 2019, representing a compound annual growth rate (CAGR) of 11.9% between 2015 and 2019. In comparison, the Nigerian and Egyptian industries grew with CAGRs of 10% and 19% respectively, over the same period, to reach respective values of $3.2bn and $1.4bn in 2019.

Due to a number of high-level cybersecurity threats and the interconnected nature of network technologies, cybersecurity has become critical for many businesses. This has driven growth in the service industry and encouraged innovation and development within the field. As a response to the increased threat of cyberattacks, many

IT Services in South Africa

Industry Profiles

governments have strived to implement regulations and offer support, encouraging a demand for services of this nature.

The infrastructure services segment was the industry's most lucrative in 2019, with total revenues of $4.5bn, equivalent to 58.1% of the industry's overall value. The BPO services segment contributed revenues of $1.9bn in 2019, equating to 25.2% of the industry's aggregate value.

Infrastructure services was the industry's most profitable segment as IT infrastructure is necessary for the operation and management of a company’s IT services, both internal and external. Essential to any organisation, fully functioning infrastructure delivers businesses’ IT requirements to both employees and customers, rendering it of absolute importance for any kind of business.

The performance of the industry is forecast to decelerate, with an anticipated CAGR of 11.1% for the five-year period 2019 - 2024, which is expected to drive the industry to a value of $13.1bn by the end of 2024. Comparatively, the Nigerian and Egyptian industries will grow with CAGRs of 8.1% and 14% respectively, over the same period, to reach respective values of $4.7bn and $2.7bn in 2024.

Demand for IT services is expected to rise in the coming years, as many companies will employ working from home schemes and business outsourcing in order to be able to cope with potential virus outbreaks or any other kinds of disruption. In order to do so, businesses will have to invest heavily in IT and new technologies which will help them carry on as usual, by working from remote locations or at home, at any time. However, at the time of writing, it is extremely difficult to predict how the industry will perform in the coming years due to the widespread outbreak of COVID-19. This novel coronavirus was declared a pandemic by the WHO in March 2020. While the true impact of COVID-19 is difficult to assess due to the nature in which the situation is rapidly changing, it will undoubtedly have a detrimental impact on this industry's performance.

IT Services in South Africa

Industry Profiles

3. Market Data

3.1. Market value

The South African IT services industry grew by 10.7% in 2019 to reach a value of $7.7 billion.

The compound annual growth rate of the industry in the period 2015–19 was 11.9%.

Table 1: South Africa IT services industry value: $ billion, 2015–19

Year $ billion ZAR billion € billion % Growth

2015 4.9 71.5 4.4

2016 5.6 80.3 5.0 12.4%

2017 6.2 90.1 5.6 12.2%

2018 7.0 101.1 6.2 12.2%

2019 7.7 111.9 6.9 10.7%

CAGR: 2015–19 11.9%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 1: South Africa IT services industry value: $ billion, 2015–19

SOURCE: MARKETLINE

M A R K E T L I N E

IT Services in South Africa

Industry Profiles

4. Market Segmentation

4.1. Category segmentation

Infrastructure services is the largest segment of the IT services industry in South Africa, accounting for 58.1% of the industry's total value.

The Bpo services segment accounts for a further 25.2% of the industry.

Table 2: South Africa IT services industry category segmentation: $ billion, 2019

Category 2019 %

Infrastructure Services 4.5 58.1%

Bpo Services 1.9 25.2%

Application Services 1.3 16.7%

Total 7.7 100%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 2: South Africa IT services industry category segmentation: % share, by value, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

IT Services in South Africa

Industry Profiles

4.2. Geography segmentation

South Africa accounts for 0.6% of the global IT services industry value.

China accounts for a further 10.5% of the global industry.

Table 3: South Africa IT services industry geography segmentation: $ billion, 2019

Geography 2019 %

China 134.5 10.5

India 38.7 3.0

South Africa 7.7 0.6

Nigeria 3.2 0.2

Egypt 1.4 0.1

Rest Of The World 1,090.1 85.5

Total 1,275.6 99.9%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 3: South Africa IT services industry geography segmentation: % share, by value, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

IT Services in South Africa

Industry Profiles

5. Market Outlook

5.1. Market value forecast

In 2024, the South African IT services industry is forecast to have a value of $13.1 billion, an increase of 70.1% since 2019.

The compound annual growth rate of the industry in the period 2019–24 is predicted to be 11.1%.

Table 4: South Africa IT services industry value forecast: $ billion, 2019–24

Year $ billion ZAR billion € billion % Growth

2019 7.7 111.9 6.9 10.7%

2020 8.5 123.5 7.6 10.4%

2021 9.5 136.8 8.5 10.8%

2022 10.6 152.5 9.4 11.4%

2023 11.8 170.6 10.5 11.9%

2024 13.1 189.8 11.7 11.3%

CAGR: 2019–24 11.1%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 4: South Africa IT services industry value forecast: $ billion, 2019–24

SOURCE: MARKETLINE

M A R K E T L I N E

IT Services in South Africa

Industry Profiles

6. Five Forces Analysis

The IT services market will be analyzed taking providers of it outsourcing & processing, it consulting & support and cloud computing services as players. The key buyers will be taken as businesses and government agencies, and providers of hardware devices and software tools as the key suppliers.

6.1. Summary

Figure 5: Forces driving competition in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

The IT services industry is fragmented, with small players competing alongside large multinationals. Services have become increasingly globalized and are likely to become gradually automated, particularly due to the adoption of cloud computing services. Buyers range in size. Larger buyers, with greater financial muscle, exert more buyer power.

Brand recognition is of significant importance to customers and many look to reputable companies for services. This is particularly the case for players involved in IT outsourcing and data processing, where consistent quality and security are key factors in winning contracts.

Skilled employees, as suppliers of technical knowledge and expertise, are an important input. Other inputs include hardware components, which tend to be purchased from a sole supplier, increasing their power. In contrast, some companies engage in backwards integration with their own hardware and software capabilities, which reduces their reliance on external suppliers.

A substitute is to employ and train in-house staff to provide IT services. In times of economic difficulty, some companies may rely on existing staff rather than third-party service providers. However, the services offered by industry players do provide several key advantages. As such, the threat from substitutes remains moderate.

IT Services in South Africa

Industry Profiles

6.2. Buyer power

Figure 6: Drivers of buyer power in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

Buyers range in size from small businesses to multinational companies and government agencies. Larger buyers, with greater financial muscle, exert more buyer power. Contracts between industry players and buyers vary according to the service provided. Some IT service contracts can last for several years, which can translate into substantial switching costs for buyers should they wish to terminate the agreement early. However, consulting contracts tend to be shorter and there is a growing trend towards shorter duration contracts. Contracts with large customers are often secured after a bidding process. Consequently, such customers enjoy greater buyer power.

There are both small and large players in the market offering slightly differentiated products, giving buyers the upper hand, as they are able to choose from a variety of market players. However, brand recognition is likely to be of significant importance to customers, particularly when it comes to electronic data processing. Buyers will often look to a reputable company for such services; this is especially the case regarding government contracts, which have heightened media scrutiny in terms of IT failures. Services offered are often critical to the successful operation of a business, which reduces buyer power considerably. Full backwards integration by buyers is unlikely, even in cases where in-house IT services have been developed. Those IT services cannot match the quality of products the market players can provide due to years of experience, decreasing buyer power overall. Although this could decrease buyer power, it is mitigated by the fact that players are reluctant to integrate forwards into buyers' areas of operation, industries in which players may not necessarily have any experience.

Services are relatively undifferentiated, which has given rise to strong price competition, driven by a reduction in labor costs, and has encouraged multinational providers to relocate to low-cost locations. This shows the power that buyers have in influencing player practices. Large-scale players seek to differentiate themselves in terms of customer relations and are likely to become more successful as they develop more complex offerings; IBM, for instance, has developed ‘System One’, a quantum computer which is 1,000 times faster than a normal computing system, which can offer its services to all institutions around the world via cloud access, which will serve to weaken buyer power. While some smaller companies may seek to drive down the cost of services by seeking the best prices from players, for many buyers, the quality of the services offered is of the utmost importance as the quality of the buyer's product is greatly affected by this. It is particularly important for multinational corporations and government agencies to ensure they obtain a high-quality product as failures could be extremely costly. However, due to the fact that government agencies and big corporations often employ market players through auctions, or price competitions, they force market players to compete with each other for the same kind of services, giving buyers the power to choose the best

IT Services in South Africa

Industry Profiles

price. Therefore, in this industry, there is a mix of buyers willing to pay less for services and willing to pay more for high quality services.

Overall, buyer power is assessed as moderate.

IT Services in South Africa

Industry Profiles

6.3. Supplier power

Figure 7: Drivers of supplier power in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

A critical industry input is staff with appropriate technical knowledge and expertise. Industry players rely on the continued service of qualified employees, and high rates of staff turnover can be detrimental. This can be regarded as a high switching cost, with employees viewed as suppliers of such expertise.

Taking into consideration that suppliers in this industry are mainly highly paid and skillful employees, it makes the industry a crucial component of suppliers' livelihoods, due to their specialized expertise providing services based on this specific industry. It is highly likely that suppliers could move into the industry themselves, due to the experience they could acquire over their careers, making them willing and confident to start their own companies and organizations. The amount of alternative raw materials is relatively low, as raw materials in this industry are hardware components and software; this increases supplier power.

Inputs such as hardware components are often purchased from sole suppliers. Suppliers are normally large companies offering high-quality differentiated products, resulting in significant supplier power. The software market in South Africa is dominated by large international players; leading suppliers include Microsoft Corporation, Oracle Corporation and SAP AG. In contrast, companies such as IBM engage in backwards integration – the company has its own hardware and software capabilities – reducing its reliance on external suppliers. Alternative solutions exist for most software and network suppliers.

Software suppliers may begin to forward integrate once more complex software is required to provide IT services linked to powerful computers, offering parallel processing and advanced analytical techniques, which will increase supplier power. Microsoft, for example, runs a predictive analytics service based around its Azure cloud platform, while IBM offers access to its new quantum computer System One to institutions around the world through the cloud.

Supplier power in this industry is strong overall.

IT Services in South Africa

Industry Profiles

6.4. New entrants

Figure 8: Factors influencing the likelihood of new entrants in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

Entry on a small scale is achievable in the IT services industry; some smaller players have grown as both government and commercial institutions increasingly turn to third-parties to provide specialized IT support. Similarly, buyers seek to cut costs wherever possible and data processing and other business processes have increasingly been outsourced to specialists; allowing clients to focus on core activities.

Large companies in this industry have significant economies of scale in processing and can offer more services; smaller companies can compete by specializing in particular verticals, and offering customized services. Newly developing niche markets will offer opportunities for smaller players in areas such as green IT and the Iota. Equally, industry specialists operating in the key markets of healthcare and finance have notable opportunities. However, prominent companies, relying on an established image, may be unwilling to trust smaller, less established companies, giving larger industry players an advantage. While there is a relatively large number of expert staff in this industry, many may be attracted to larger more established companies such as IBM and Hewlett Packard, as they are often able to offer greater incentives, such as development opportunities and higher pay. This may deter new entrants as they may lack the reputation and ability to attract the most experienced staff.

Regulation is varied and largely dependent on the service offered and the buyers involved. For example, data processing services for financial institutions are often stringently regulated. Restrictions on data flows between different countries may restrict the expansion capabilities of new entrants.

The markets in which the companies in this industry operate are subject to technological advances, developing industry standards, and changing customer needs and preferences. The success of a company is dependent on its ability to anticipate and adapt to changes. Large companies often acquire smaller players to gain access to the technology and intellectual property of smaller, more innovative firms.

Blockchain technology has increased the number of new entrants in the market as it is not regulated, so companies have a certain amount of freedom when using this particular technology. However, companies using blockchain technology have to be particularly careful and, most of the time, have to publish their financial records, due to fear of persecution from the government, based on fraud allegations.

Fixed costs for the market are relatively high, due to the energy and electricity consumption server rooms require. In order to provide their services, even via cloud, IT companies require a large amount of space for their server rooms,

IT Services in South Africa

Industry Profiles

consuming high levels of electricity. To provide high-end services and keep them up to date, server rooms require constant maintenance from high expertise personnel, increasing fixed costs.

In addition, new entrants require highly skilled employees in order to be able to compete with already established market players, which are well-known in the industry through their brand image, rendering entry even more difficult.

South Africa is currently leading the way regionally with regard to developing smart city technology. The South African Local Government Association (SALGA) is actively encouraging innovation in this field and cities such as Durban, Cape Town and Johannesburg have already implemented various technologies. Government initiatives like this are likely to attract new entrants, which can capitalize on changing trends.

Distribution is often limited by technological infrastructure, meaning new entrants to developing markets will find it difficult to expand. The World Economic Forum's latest Global Information Technology report ranks South Africa 65th out of 139 countries in terms of network readiness, suggesting that the market has room for development in terms of IT infrastructure. Intellectual property is likely to become increasingly important as the industry shifts to more complex service offerings; IBM, for example, has obtained over 97,000 patents since 1993. This will weaken opportunities for new entrants unable to invest in R&D.

Many companies that are the source of business for this industry curtailed their costs in order to survive. Conversely, some areas, such as IT outsourcing, run along a counter-cyclical trend to some extent, as buyers reduce costs by obtaining cheaper labor through the outsourcing of certain services.

The likelihood of new entrants to this industry is assessed as strong.

IT Services in South Africa

Industry Profiles

6.5. Threat of substitutes

Figure 9: Factors influencing the threat of substitutes in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

An alternative to a number of services offered in this industry is to employ and train in-house staff to provide such services. In times of economic difficulty, some companies may rely on existing staff rather than third-party service providers. However, the services offered by industry players do provide several key advantages. Key employees may be released from performing non-core or administrative processes, allowing a company to concentrate wholly on its core activities.

The increasing automation of IT services will pose difficulties for many players as buyers seek to bring more services in-house. This will also allow the service arms of hardware and software suppliers to act as substitutes for traditional IT services players. Equally, professional services firms such as KPMG are increasingly offering IT services due to the relative ease of replicating service models.

Business can be more flexible by not investing in assets and reducing response times to environmental changes. However, using outsourcing or consulting companies can result in a loss of internal business process know-how, and consequently result in a dependency on service providers.

Overall, there is a moderate threat from substitutes in this industry.

IT Services in South Africa

Industry Profiles

6.6. Degree of rivalry

Figure 10: Drivers of degree of rivalry in the IT services industry in South Africa, 2019

SOURCE: MARKETLINE

M A R K E T L I N E

Large players attempt to differentiate themselves through a number of initiatives in an effort to boost their competitive edge. Companies such as IBM offer a variety of services and products including hardware and software, which serves to ease rivalry as they are not solely reliant on the revenues generated from this industry. In addition, developments in social network, mobile, analytic and cloud technologies allow players to offer more value-added services, increasing rivalry in terms of intellectual property and the need for perpetual innovation.

Due to a number of high-level cybersecurity threats and the interconnected nature of network technologies, cybersecurity has become crucial for many businesses in Europe and worldwide. IBM Security has established itself as a leading player in this field; the company partnered with Cisco in 2017, and has since shared intelligence between internal research groups when investigating hacks. Partnerships of this nature can help players to gain a competitive edge, reducing the degree of rivalry.

While switching costs for small businesses in this industry can be relatively low, for large corporations and government agencies, switching providers for certain services, such as infrastructure, can incur high costs and damage reputations if services are down for a long period of time. High switching costs for some will reduce the degree of rivalry, as players may become locked into using a certain supplier.

The globalized nature of the industry increases rivalry with regard to cost reductions, which has driven the rapid expansion of export services in countries such as India, where competitive contractual terms are key success factors. This has historically been linked to labor costs, but may develop into storage costs as restrictions on data flows mean that data centers will proliferate.

Security and secrecy are also key factors in terms of data storage, which is perhaps why traditional tax havens top the list of countries with the most secure internet servers per one million people – Liechtenstein, Bermuda, Monaco, Switzerland, Luxembourg and the Isle of Man are all in the top 10. However, services offered by most industry players are essentially similar and companies are highly reliant on revenues from the industry.

Overall, the degree of rivalry is assessed as moderate.

IT Services in South Africa

Industry Profiles

7. Competitive Landscape

7.1. Who are the leading players?

Accenture plc is the biggest provider of IT services in South Africa with market cap of $104.1bn. The company is based in Dublin, Ireland and offers management consulting, technology and outsourcing services to clients across a broad range of industries. It serves food and beverage, household goods, personal care, tobacco, fashion/apparel, agribusiness and consumer health companies; supermarkets, hardline retailers, mass-merchandise discounters, department stores and specialty retailers; as well as airlines and hospitality and travel services companies. Media and entertainment industry group serves the broadcast, entertainment, print, publishing and Internet/social media industries. The company operates in the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific.

International Business Machines Corporation (IBM) is the second biggest provider of IT services in South Africa with market cap of $89.1bn. The company is based in New York, the US and is an integrated information technology (IT) company. It is engaged in offering services such as consulting, delivery and implementation services, cloud and cognitive offerings, enterprise software, systems and financing solutions. It serves public, financial services, industrial, communications and distribution business. IBM has its operations across Europe, the Americas, the Middle East, Asia- Pacific and Africa.

Hewlett Packard Enterprise Company (HPE) is the third biggest provider of IT services in South Africa with market cap of $11.7bn. The company is based in San Jose, the US and offers compute, storage, and data center networking services, enterprise networking and security solutions. The company provides wired and wireless local area network hardware products such as switches, routers, sensors, Wi-Fi access points, and various software products including cloud based management, network management, analytics and location services. It also offers investment solutions, including leasing, financing, IT consumption, utility programs, and asset management services. HPE offers its solutions to commercial and large enterprise groups through resellers, advisory firms, distribution partners, original equipment manufacturers, independent software vendors and system integrators. The company also provides solutions for corporate investments including communications, media solutions and other business incubation projects. It has business presence in the Americas, Europe, Middle East, Africa and Asia-Pacific.

Capgemini SE (Capgemini) is the fourth biggest provider of IT services in South Africa with market cap of $10.7bn The company is based in Paris, France and offers business process management (BPM), cloud services, and product and engineering services. It serves a wide range of industries including banking and capital markets, manufacturing and industrial products, aerospace and defense, agriculture, automotive, consumer and retail, electronics and high tech, energy and utilities, government and public sector, healthcare, and life sciences, and transportation and distribution. The company offers its products and services under Capgemini, sogeti, and Invent brand names. It conducts business operations in the Americas, Asia-Pacific, Europe, the Middle East, and Africa.

7.2. What strategies do the leading players follow?

IT Services in South Africa

Industry Profiles

Accenture's strong network of alliances, client services and geographical presences, make the company a leading provider of IT services in the world. The company works closely with some of the technology market leaders that complement and extend its solutions and capabilities. Accenture has alliances with leading technology companies such as BMC, Cisco Systems, Dell, EMC, HPE, IBM, JDA, Microsoft, NetApp, Oracle, Red Hat, Salesforce.com, SAP, SAS, Siemens, Symantec, Thomson Reuters, VMware, among others. The strong alliance network allowed Accenture to deliver innovative and collaborative solutions by bringing together various technology teams. Alliances with leading technology companies have allowed the company to cater to the broad and varied needs of its clients. The strong network of alliances has allowed Accenture to create significant and sustainable value to its customers. A robust alliances network equips Accenture with the ability to serve a diverse base of clients. Furthermore, the company enjoys strong and lasting relationships with many of the world's leading companies. It has relationships with more than 6,000 clients in 120 countries and 97 of its top 100 clients have been clients for at least 10 years. Accenture serves 92 of the top 100 companies in the Fortune Global 500. This indicates that the company enjoys high switching costs. Long relationships with its clients ensures Accenture's consultants are well versed with their businesses, and therefore clients will have to incur high switching costs. The client relationships are also a testimony to the company's ability to retain its customers and to the favorable competitive position that it enjoys. These client relationships will also enhance the company's ability to win new business as it has a roster of valuable client references. In addition, the company's ability to operate at a certain scale provides a favorable competitive environment and pricing power. Accenture is further positioned as a one-stop-shop that provides cross-selling opportunities. Accenture enjoys a significant scale and is diversified across industries and geographies while at the same time offering integrated services. The company has one of the broadest offerings in management consulting, technology services and outsourcing markets. It caters to 13 industry groups, under its five operating groups: products; financial services; communications, media and technology; resources; and health and public service. In addition, the company offers its services to clients globally through its Global Delivery Network which includes Accenture personnel based at more than 50 delivery centers around the world. The company operates in more than 200 cities in 52 countries. Furthermore, the company generates a balanced revenue stream across its operating groups.

IBM's strong R&D focus enables the company to invest in new ideas and create innovative services and products. The company has been consistently investing in R&D to enhance its products and add new technologies. In 2018, the company invested more than $5bn in R&D activities. IBM Research works with clients and the company's business units through global labs on near-term and mid-term innovations. In 2018, IBM was awarded 9,100 patents in the US, more than any other company for the 25th consecutive year. These patents represent a diverse range of inventions in artificial intelligence and cognitive computing, cognitive health, cloud, cybersecurity and other strategic growth areas for the company. IBM's focus on new innovation and intellectual property enables it to introduce new products, providing it with first mover advantage in a dynamic and continually evolving technology market. The company's business model is built to support two principal goals: helping enterprise clients to become more innovative, efficient and competitive through the application of business insight and IT solutions; and providing long-term value to shareholders. The business model has been developed over a period of time through strategic investments in capabilities and technologies that have superior long-term growth and profitability prospects based on the value they deliver to clients. The company's global capabilities include services, software, systems, fundamental research and related financing. The broad mix of businesses and capabilities are combined to provide integrated solutions to the company's clients. According to the company, its business model is dynamic, adapting to the continuously changing market and economic environment. The company continues to divest certain businesses and strengthen its position through strategic organic investments and acquisitions in higher-value areas. Earlier, IBM Watson Health completed the acquisition of Truven Health Analytics, a provider of cloud-based healthcare data, analytics and insights, for $2.6bn. Truven brings more than 8,500 clients to the Watson Health portfolio, including the US federal and state government agencies, employers, health plans, hospitals, clinicians and life sciences companies. IBM acquired Aperto, a Germany-based digital agency. IBM's strong business model has enabled the company to deliver strong earnings, cash flows and returns to shareholders in the long run.

7.3. What strategies do the leading players follow (continued)?

HPE's strong focus on R&D capabilities enables the company to enhance its product portfolio. The company's R&D focuses on designing and developing products, services and solutions to meet the changing customer needs and

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desires and to meet the emerging technology trends. Hewlett Packard Labs, together with the various R&D groups, focuses on developing next-generation products and solutions integrating emerging technologies. In 2019, the company spent $1,8bn on R&D, which as a percentage of revenue stood at 6.3%. As a result of the company's strong focus on R&D, the company has a worldwide patent portfolio of approximately 15,000 issued and pending patents. Increased focus on R&D helps the company to remain competitive in the marketplace with significant offerings. It allows HPE to maintain technological edge over its competitors and to stay ahead of industry trends. In addition, it also allows the company to differentiate its products from its competitors'.

Capgemini's strong focus on its customers gives the company a competitive edge over its peers. Its established Rightshore business model enables to deliver a wide range of services and strengthen its relationships with clients. The company uses the Rightshore delivery model to deliver maximum business value for clients. Its global delivery model integrates quality, efficiency, talent, and collaborative approach to improve scalability and add value to its revenue stream. This model focuses on promoting innovation and transformation to create and sustain a competitive edge over its peers. It successfully delivered more than 1,000 projects using this delivery model. Rightshore model primarily targets achieving cost reduction of 40% on IT infrastructure costs and improving investments to enhance productivity. It reduces operating costs by implementing more agile, efficient processes. Capgemini’s distribution network is spread across 40 countries including the US, Germany, Poland, the Netherlands, Canada, Brazil, China, Spain, and others. The model is a blend of onshore, offshore, and business process outsourcing (BPO) activities, which offers greater access to clients, and leads to faster and effective communications and delivery of solutions. By leveraging Virtual Delivery Center’s capabilities, Capgemini offers a virtual workforce of robots and platform delivery to provide solutions to various business enterprises.

7.4. What has been the recent M&A activity?

Accenture has acquired Context Information Security, a cyber-defense consultancy, from Babcock International Group PLC, an aerospace and defense company, for $138.12m. Both Context and Babcock are based in the UK. Context provides high-end cyber defense services across a range of industries including financial services, government, aerospace and defense and critical infrastructure. Context employs over 250 people across the UK, Germany, USA and Australia. Context was part of the Group's Marine sector. For the year ended 31 March 2019, it had an operating profit of $1.2m. As of 30 September 2019, Context had gross assets of $34m.

Infosys Ltd, an Indian provider of business consulting, information technology and outsourcing services and IBM, announced a global alliance to help enterprises accelerate their digital transformation journey using the IBM public cloud. The collaboration will help enterprises, including those in regulated industries such as financial services, insurance and healthcare, to transition, modernize and transform their enterprise workloads and applications by tapping into the security, open innovation and enterprise capabilities of the IBM public cloud. As part of the relationship, Infosys will also offer its clients access to Red Hat’s portfolio of open source offerings on the IBM public cloud. This will provide enterprises a greater level of scale, resources and capabilities to accelerate the impact of their cloud-driven digital transformation. As part of the program, Infosys will be able to deploy technical expertise from IBM to support clients in their move to IBM public cloud. IBM will work with Infosys and its clients to speed efforts such as proof of concepts, running cloud pilots, staffing client innovation centers and other mechanisms designed to deliver value quickly and securely. Ravi Kumar S is the president of Infosys and Bob Lord is the senior vice president of IBM.

Zenuity AB, a Sweden-based developer of software for self-driving cars (Autonomous Driving, AD) and driver-assisting technology (ADAS, Advanced Driver Assistance Systems), has partnered with HPE to provide the artificial intelligence (AI) and high-performance computing (HPC) infrastructure to develop next generation autonomous driving (AD) systems. Zenuity is a joint venture between Volvo Cars (VCC) and Veoneer, two Sweden-based automotive safety companies. HPE will provide Zenuity with core data processing services that will allow Zenuity to gather, store, organize and analyze the data it generates from its network of test vehicles and software development centers. The end-to-end IT infrastructure will be delivered as-a-service through HPE GreenLake. The service is powered by purpose- built HPC technologies: HPE Apollo systems, HPE ProLiant servers, and a high performance parallel Lustre(R) file based storage solution, and will be delivered through the as-a-Service HPE GreenLake offering. HPE Pointnext Services will manage the solution, creating an easy-to-use environment for Zenuity’s developers as they test, learn and validate new generations of its flagship AD software. Dennis Nobelius is the CEO of Zenuity, while Antonio Neri is the CEO of HPE. Deployment is due to begin rollout in summer 2020 and initial rollout will take place in Sweden.

IT Services in South Africa

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Capgemini and Audi AG, a German automobile manufacturer that designs, engineers, produces, markets and distributes luxury vehicles, announced the formation of a joint venture. The scope of the new company will comprise the provision of digital technology and consulting services, particularly in the fields of SAP S/4HANA and Cloud services. Capgemini and Audi have a long-standing partnership in developing solutions for digital transformation and co-innovation. The new co-owned company will strengthen this collaboration and leverages their joint capabilities. Both companies have signed an agreement to establish this new company once regulatory approvals have been obtained.

IT Services in South Africa

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8. Company Profiles

8.1. International Business Machines Corporation

8.1.1. Company Overview

International Business Machines Corporation (IBM or "the company") is an integrated information technology (IT) company. It is engaged in offering services such as consulting, delivery and implementation services, cloud and cognitive offerings, enterprise software, systems and financing solutions. It serves public, financial services, industrial, communications and distribution business. IBM has its operations across Europe, Americas, Middle East, Asia Pacific and Africa. The company is headquartered in Armonk, New York, the US.

The company reported revenues of (US Dollars) US$79,591 million for the fiscal year ended December 2018 (FY2018), an increase of 0.6% over FY2017. In FY2018, the company’s operating margin was 14.3%, compared to an operating margin of 14.4% in FY2017. In FY2018, the company recorded a net margin of 11%, compared to a net margin of 7.3% in FY2017.The company reported revenues of US$19,161.0 million for the second quarter ended June 2019, an increase of 5.4% over the previous quarter.

8.1.2. Key Facts

Table 5: International Business Machines Corporation: key facts

Head office: 1 New Orchard Rd Armonk, New York, United States

Number of Employees: 350600

Website: www.ibm.com

Financial year-end: December

Ticker: IBM

Stock exchange: New York Stock Exchange

SOURCE: COMPANY WEBSITE M A R K E T L I N E

8.1.3. Business Description

International Business Machines Corporation (IBM or ‘the company’) is a global information technology (IT) company, which provides a range of services, software, systems and fundamental research services. The company also offers related financing services for its clients. The company has a global presence, operating in countries across Americas, Europe, Middle East, Africa and Asia Pacific.

The company's operations span across five business segments: Technology Services and Cloud Platforms, Cognitive Solutions, Global Business Services, Systems and Global Financing.

Technology Services and Cloud Platforms provide IT infrastructure services that incorporate intellectual property within its global delivery model. Its capabilities include Infrastructure Services, Integration Software and Technical Support Services. Infrastructure Services delivers a portfolio of cloud, outsourcing, project-based and other managed services focused on clients’ enterprise IT infrastructure environments. The portfolio includes a set of hybrid cloud services and solutions to assist clients in building and running enterprise IT environments that utilize public and private clouds and traditional IT. The IBM Cloud Platform offers services to developers and IBM’s cloud infrastructure- as-a-service covers a variety of workloads. Technical Support Services delivers a line of support services to maintain and improve the availability of clients’ IT infrastructures. These offerings include maintenance for IBM products and other technology platforms, as well as software and solution support. The Integration Software delivers hybrid cloud

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solutions to achieve innovation, process transformation and hybrid integration with choice and consistency across dedicated, public and local cloud environments, leveraging IBM’s Bluemix platform-as-a-service solution. Integration Software offerings and capabilities help clients address the digital imperatives to connect, create and optimize their applications, data and infrastructure on their journey to become cognitive businesses. In FY2018, the Technology Services and Cloud Platforms segment reported revenues of US$34,462 million, which accounted for 43.3% of the company's total revenue.

Cognitive Solutions comprises a portfolio of capabilities that help IBM’s clients to identify actionable new insights and informed decision-making for competitive advantage. Leveraging IBM’s research, technology and industry expertise, this business delivers a full spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, the commercially available cognitive computing platform that has the ability to interact in natural language, process vast amounts of big data, and learn from interactions with people and computers. These solutions are provided through the contemporary delivery methods including through cloud environments and as-a-service models. Cognitive Solutions consists of Solutions Software and Transaction Processing Software. Solutions Software provides the basis for many of the company’s strategic areas including analytics, security and social. Watson Platform, Watson Health and Watson Internet of Things capabilities are included in Solutions Software. IBM’s security platform delivers integrated security intelligence across clients’ entire operations, including their cloud, applications, networks and data, helping them to prevent, detect and remediate potential threats. Transaction Processing Software includes software that primarily runs mission-critical systems in industries such as banking, airlines and retail. Most of this software is on premise and annuity in nature. In FY2018, the Cognitive Solutions segment reported revenues of US$18,481 million, which accounted for 23.2% of the company's total revenue.

Global Business Services (GBS) provides clients with consulting, application management services and global process services. These professional services deliver business value and innovation to clients through solutions which leverage industry, technology and business process expertise. GBS is the digital reinvention partner for IBM clients, combining industry knowledge, functional expertise, and applications with the power of design, cognitive and cloud. The full portfolio of GBS services is backed by its globally integrated delivery network and integration with IBM solutions and services including Watson, cloud, blockchain, and Technology Services. GBS capabilities includes: Consulting, which provides business consulting services focused on bringing to market solutions that help clients shape their digital blueprints and customer experiences, define their cognitive operating models, set their next-generation talent strategies and create new technology visions and architectures in a cloud-centric world; Application Management delivers system integration, application management, maintenance and support services for packaged software, as well as custom and legacy applications; Global Process Services, GBS’ business process outsourcing service line, delivers finance, procurement, HR, and industry-specific business processes. These services deliver improved business results to clients through the strategic change and/or operation of the client’s business processes, applications and infrastructure. In FY2018, the GBS segment reported revenues of US$16,817 million, which accounted for 21.1% of the company's total revenue.s

Systems segment provides clients with infrastructure technologies to help meet the new requirements of hybrid cloud and cognitive workloads—from deploying advanced analytics, to moving to digital service delivery with the cloud, and securing mobile transaction processing. IBM Systems also designs advanced semiconductor and systems technology in collaboration with IBM Research, primarily for use in the company’s systems. Systems’ capabilities include Servers, a range of high-performance systems designed to address computing capacity, security and performance needs of businesses, hyper scale cloud service providers and scientific computing organizations. The portfolio includes z Systems, an enterprise platform for integrating data, transactions and insight, and Power Systems, a system designed from the ground up for big data and analytics, optimized for scale-out cloud and Linux, and delivering open innovation with OpenPOWER; Storage, data storage products and solutions that allow clients to retain and manage growing, complex volumes of digital information and fuel data-centric cognitive applications. These solutions address critical client requirements for information retention and archiving, security, compliance and storage optimization including data de-duplication, availability and virtualization. The portfolio consists of a range of software-defined storage solutions, flash storage, disk and tape storage solutions; Operating Systems Software, the company’s z/OS is a scalable, high-performance enterprise operating system for z Systems. Power Systems offers a choice of AIX or Linux operating systems. These operating systems leverage POWER architecture to deliver secure and high- performing enterprise-class workloads across a breadth of server offerings. In FY2018, the Systems segment reported revenues of US$8,034 million, which accounted for 10.1% of the company's total revenue.

Global Financing facilitates IBM clients’ acquisition of information technology systems, software and services by providing financing solutions in the areas where the company has the expertise. The financing arrangements are

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predominantly for products or services that are critical to the end users’ business operations. These financing contracts are entered into after a comprehensive credit evaluation and are secured by legal contracts. Global Financing also maintains a long-term partnership with the companies’ clients through various stages of IT asset life cycle—from initial purchase and technology upgrades to asset disposition decisions. Global Financing capabilities include Client Financing, Commercial Financing, and Remanufacturing and Remarketing. Client Financing include lease, installment payment plan and loan financing to end users and internal clients for terms up to seven years. Assets financed are primarily new and used IT hardware, software and services where the company has expertise. Internal financing is predominantly in support of Technology Services and Cloud Platforms’ long-term client service contracts. Commercial Financing is a short-term inventory and accounts receivable financing to suppliers, distributors and remarketers of IBM and original equipment manufacturer (OEM) products. Remanufacturing and Remarketing assets include used equipment returned from lease transactions, or used and surplus equipment acquired internally or externally. These assets may be refurbished or upgraded and sold or leased to new or existing clients both externally or internally. In FY2018, the Global Financing segment reported revenues of US$1,590 million, which accounted for 2% of the company's total revenue.

In FY2018, the Other business reported revenues of US$207 million, which accounted for 0.3% of the company's total revenue.

Geographically, the company classifies its operations into three segments, namely America; Europe, Middel East and Africa; and Asia Pacific. In FY2018, the America’s segment accounted for 46.5% of the company's total revenues, followed by Europe, Middle East and Africa with 32%; and Asia with 21.5%.

IT Services in South Africa

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Table 6: International Business Machines Corporation: Annual Financial Ratios

Key Ratios 2015 2016 2017 2018 2019

Growth Ratios

Sales Growth % -11.91 -2.23 -0.98 0.57 -3.07

Operating Income Growth % -20.22 -22.67 -7.54 -0.51 -10.37

EBITDA Growth % -20.20 -21.02 -7.30 -1.00 -7.21

Net Income Growth % 9.71 -9.99 -51.54 51.71 8.05

EPS Growth % -10.64 -1.69 -8.41 -0.52 1.61

Working Capital Growth % 5.63 -7.55 62.51 -11.74 -93.42

Equity Ratios

EPS (Earnings per Share) USD 13.60 12.39 11.98 11.74 10.73

Dividend per Share USD 5.00 5.50 5.90 6.21 6.43

Dividend Cover Absolute 2.72 2.25 2.03 1.89 1.67

Book Value per Share USD 14.77 19.29 19.08 18.82 23.49

Profitability Ratios

Gross Margin % 49.77 48.19 46.68 46.41 47.30

Operating Margin % 19.51 15.43 14.41 14.25 13.18

Net Profit Margin % 16.14 14.86 7.27 10.97 12.22

Profit Markup % 99.09 93.03 87.55 86.59 89.74

PBT Margin (Profit Before Tax) % 19.51 15.43 14.41 14.25 13.18

Return on Equity % 92.48 65.07 32.70 51.97 45.25

Return on Capital Employed % 20.92 15.19 12.96 13.32 8.88

Return on Assets % 11.58 10.42 4.74 7.02 6.84

Return on Working Capital % 193.61 161.96 92.14 103.87 1413.91

Operating Costs (% of Sales) % 80.49 84.57 85.59 85.75 86.82

Administration Costs (% of Sales) % 23.87 24.32 24.16 22.89 25.28

Liquidity Ratios

Current Ratio Absolute 1.24 1.21 1.33 1.29 1.02

Quick Ratio Absolute 1.20 1.17 1.29 1.24 0.98

Cash Ratio Absolute 0.24 0.24 0.34 0.31 0.24

Leverage Ratios

Debt to Equity Ratio Absolute 2.71 2.24 2.56 2.54 2.96

Net Debt to Equity Absolute 2.26 1.88 1.98 2.05 2.63

Debt to Capital Ratio Absolute 0.73 0.69 0.72 0.72 0.75

Efficiency Ratios

Asset Turnover Absolute 0.72 0.70 0.65 0.64 0.56

Fixed Asset Turnover Absolute 7.60 7.41 7.21 7.27 5.98

Inventory Turnover Absolute 22.47 26.68 26.91 26.13 24.63

Current Asset Turnover Absolute 1.82 1.85 1.69 1.61 1.76

Capital Employed Turnover Absolute 1.07 0.98 0.90 0.93 0.67

Working Capital Turnover Absolute 9.93 10.50 6.40 7.29 107.30

SOURCE: COMPANY FILINGS M A R K E T L I N E

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Table 7: International Business Machines Corporation: Key Employees

Name Job Title Board

Alex Gorsky Director Non Executive Board

Andrew N. Liveris Director Non Executive Board

Arvind Krishna Chief Executive Officer Executive Board

Arvind Krishna Director Executive Board

Bridget van Kralingen Senior Vice President Global Markets Senior Management

Bruno V. Di Leo Senior Vice President, IBM Global Markets Senior Management

Bruno V. di Leo Allen Senior Vice President Senior Management

Catherine Lian Managing Director IBM Malaysia Senior Management

David Kenny Senior Vice President IBM Watson and Cloud

Platform Senior Management

David N. Farr Director Non Executive Board

Diane J. Gherson Chief Human Resources Officer Senior Management

Diane J. Gherson Senior Vice President Senior Management

F. William McNabb Director Non Executive Board

Frank Sedlarcik Assistant General Counsel Senior Management

Frank Sedlarcik Secretary Senior Management

Frank Sedlarcik Vice President Senior Management

Frederick H. Waddell Director Non Executive Board

James J. Kavanaugh Chief Financial Officer Senior Management

James J. Kavanaugh Senior Vice President Finance and Operations Senior Management

James M. Whitehurst Senior Vice President Senior Management

Jim Whitehurst President Senior Management

John E. Kelly, III Executive Vice President Senior Management

John Granger Senior Vice President Cloud Application

Innovation Senior Management

Joseph R. Swedish Director Non Executive Board

Juan A. Zufiria Zatarain Senior Vice President Global Technology

Services Senior Management

Katrina Troughton Managing Director Australia and New Zealand Senior Management

Kenneth M. Keverian Senior Vice President Corporate Strategy Senior Management

Mark Foster Senior Vice President IBM Services and

Global Business Services Senior Management

Martha E. Pollack Director Non Executive Board

Martin Jetter Senior Vice President Europe Senior Management

SOURCE: COMPANY FILINGS M A R K E T L I N E

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Table 8: International Business Machines Corporation: Key Employees Continued

Name Job Title Board

Michael L. Eskew Director Non Executive Board

Michael Mendenhall Chief Medical Officer IBM Watson Senior Management

Michelle H. Browdy General Counsel Senior Management

Michelle H. Browdy Senior Vice President Legal and Regulatory

Affairs Senior Management

Michelle Howard Director Non Executive Board

Michelle J. Howard Director Non Executive Board

Michelle Peluso Chief Marketing Officer Senior Management

Michelle Peluso Senior Vice President Digital Sales Senior Management

Peter R. Voser Director Non Executive Board

Robert F. Del Bene Controller Senior Management

Robert F. Del Bene Vice President Senior Management

Robert J. Picciano Senior Vice President Cognitive Systems Senior Management

Robert W. Lord Senior Vice President Cognitive Applications Senior Management

Shirley Ann Jackson Director Non Executive Board

Sidney Taurel Director Non Executive Board

Simon J. Beaumont Treasurer Senior Management

Simon J. Beaumont Vice President Tax Senior Management

Thomas W. Rosamilia Senior Vice President IBM Systems Senior Management

Tom Rosamilia Senior Vice President Systems Senior Management

Virginia M. Rometty Chairman Executive Board

SOURCE: COMPANY FILINGS M A R K E T L I N E

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8.2. Accenture plc

8.2.1. Company Overview

Accenture plc (Accenture or "the company") is one of the leading professional services companies, offering management consulting, technology and outsourcing services to clients across a broad range of industries. It serves food and beverage, household goods, personal care, tobacco, fashion/apparel, agribusiness and consumer health companies; supermarkets, hardline retailers, mass-merchandise discounters, department stores and specialty retailers; as well as airlines and hospitality and travel services companies. Media and entertainment industry group serves the broadcast, entertainment, print, publishing and Internet/social media industries. The company operates in the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific. The company is headquartered in Dublin, Ireland.

The company reported revenues of (US Dollars) US$41,603.4 million for the fiscal year ended August 2018 (FY2018), an increase of 13.2% over FY2017. In FY2018, the company’s operating margin was 14%, compared to an operating margin of 12.6% in FY2017. In FY2018, the company recorded a net margin of 9.8%, compared to a net margin of 9.4% in FY2017.The company reported revenues of US$11,099.7 million for the third quarter ended May 2019, an increase of 6.2% over the previous quarter.

8.2.2. Key Facts

Table 9: Accenture plc: key facts

Number of Employees: 459000

Website: www.accenture.comie-en

Financial year-end: August

Ticker: ACN

Stock exchange: New York Stock Exchange

SOURCE: COMPANY WEBSITE M A R K E T L I N E

8.2.3. Business Description

Accenture plc (Accenture or "the company") is a global management consulting, technology services and outsourcing company. The company operates in more than 200 cities in 52 countries across the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific. Accenture provides services to its customers through a global delivery network of over 50 delivery centers.

The company's business is structured around five segments, which together comprise 13 industry groups that serve clients globally in more than 40 industries.

The five segments of the company include: products; financial services; communications, media and technology; resources; and health and public service.

The products segment serves a set of increasingly interconnected consumer-relevant industries. Its consumer goods, retail and travel services industry group serves food and beverage, household goods, personal care, tobacco, fashion/apparel, agribusiness and consumer health companies; supermarkets, hardline retailers, mass-merchandise discounters, department stores and specialty retailers; as well as airlines and hospitality and travel services companies. The industrial industry group works with automotive manufacturers and suppliers; freight and logistics companies; industrial and electrical equipment, consumer durable and heavy equipment companies; and construction and infrastructure management companies. The company’s life sciences industry group serves pharmaceutical,

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medical technology and biotechnology companies. In FY2018, the products segment reported revenue of US$10,854 million, which accounted for of the company’s revenue.

The financial services segment serves the banking, capital markets and insurance industries. Professionals in this operating group work with clients to address growth, cost and profitability pressures, industry consolidation, regulatory changes and the need to continually adapt to new digital technologies. Its financial services operating group comprises of banking and capital markets industry group which serves retail and commercial banks, mortgage lenders, investment banks, wealth and asset management firms, broker/dealers, depositories, exchanges, clearing and settlement organizations, and other diversified financial enterprises. The insurance industry group serves property and casualty insurers, life insurers, reinsurance firms and insurance brokers. In FY2018, the products segment reported revenue of US$8,238 million, which accounted for of the company’s revenue.

The communications, media and technology segment serves the communications, electronics, high technology, media and entertainment industries. It comprises of communications industry group which serves wireline, wireless, cable and satellite communications and service providers. Electronics and high tech industry group serves the information and communications technology, software, semiconductor, consumer electronics, aerospace and defense, and medical equipment industries. Media and entertainment industry group serves the broadcast, entertainment, print, publishing and Internet/social media industries. In FY2018, the products segment reported revenue of US$8,031 million, which accounted for of the company’s revenue.

The resources segment serves the chemicals, energy, forest products, metals and mining, utilities and related industries. It comprises of chemicals and natural resources industry group which works with a range of industry segments, including petrochemicals, specialty chemicals, polymers and plastics, gases and agricultural chemicals, among others, as well as the metals, mining, forest products and building materials industries. Energy industry group serves a range of companies in the oil and gas industry, including upstream, downstream, oil services and new energy companies. Utilities industry group works with electric, gas and water utilities around the world. In FY2018, the products segment reported revenue of US$5,657 million, which accounted for of the company’s revenue.

The health and public service segment serves healthcare payers and providers, as well as government departments and agencies, public service organizations, educational institutions and non-profit organizations around the world. It comprises of health industry group which works with healthcare providers, such as hospitals, public health systems, policy-making authorities, health insurers (payers), and industry organizations and associations. The public service industry group work primarily with defense departments and military forces; public safety authorities, such as police forces and border management agencies; justice departments; human services agencies; educational institutions, such as universities; non-profit organizations; and postal, customs, revenue and tax agencies. In FY2018, the products segment reported revenue of US$6,688 million, which accounted for of the company’s revenue.

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Table 10: Accenture plc: Annual Financial Ratios

Key Ratios 2015 2016 2017 2018 2019

Growth Ratios

Sales Growth % 3.26 5.72 3.96 13.31 5.42

Operating Income Growth % 3.15 27.58 -17.28 26.01 6.89

EBITDA Growth % 3.15 27.58 -17.28 26.01 6.89

Net Income Growth % 3.81 34.66 -16.21 17.84 17.71

EPS Growth % 7.41 13.06 10.73 9.28 11.32

Working Capital Growth % -41.03 40.21 -26.61 51.07 27.81

Equity Ratios

EPS (Earnings per Share) USD 4.76 6.45 5.44 6.61 7.36

Dividend per Share USD 2.04 2.20 2.42 2.66 2.92

Dividend Cover Absolute 2.33 2.93 2.25 2.49 2.52

Book Value per Share USD 9.44 11.76 14.07 16.20 22.64

Profitability Ratios

Gross Margin % 29.80 29.53 30.60 30.48 30.81

Operating Margin % 13.48 16.26 12.94 14.39 14.59

Net Profit Margin % 9.28 11.82 9.52 9.90 11.06

Profit Markup % 42.45 41.91 44.10 43.84 44.53

PBT Margin (Profit Before Tax) % 13.40 16.10 12.76 14.17 14.47

Return on Equity % 49.78 54.42 38.50 39.17 33.17

Return on Capital Employed % 45.68 48.25 36.39 41.26 33.67

Return on Assets % 16.90 21.19 15.91 17.23 17.62

Return on Working Capital % 200.80 182.72 205.95 171.79 143.67

Operating Costs (% of Sales) % 86.52 83.74 87.06 85.61 85.41

Administration Costs (% of Sales) % 16.13 15.71 16.25 16.09 16.22

Liquidity Ratios

Current Ratio Absolute 1.26 1.35 1.23 1.34 1.40

Quick Ratio Absolute 1.26 1.35 1.23 1.34 1.40

Cash Ratio Absolute 0.51 0.55 0.42 0.49 0.55

Leverage Ratios

Net Debt to Equity Absolute -0.70 -0.64 -0.45 -0.48 -0.42

Efficiency Ratios

Asset Turnover Absolute 1.82 1.79 1.67 1.74 1.59

Fixed Asset Turnover Absolute 41.26 39.58 34.50 34.09 32.55

Current Asset Turnover Absolute 2.91 3.07 3.01 3.19 2.98

Capital Employed Turnover Absolute 3.39 2.97 2.81 2.87 2.31

Working Capital Turnover Absolute 14.90 11.23 15.92 11.94 9.85

SOURCE: COMPANY FILINGS M A R K E T L I N E

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Table 11: Accenture plc: Key Employees

Name Job Title Board

Rafael Lopez Managing Director Health and Public Service

Practice Senior Management

Ahmed Etman Managing Director Security for Canada Senior Management

Andrew Marchant Managing Director Vancouver Senior Management

Arun Sarin Director Non Executive Board

Athina Kanioura Chief Analytics Officer Senior Management

Athina Kanioura Global Lead-Accenture Applied Intelligence Senior Management

Bhaskar Ghosh Chief Executive - Accenture Technology

Services Senior Management

Caspar Schlickum Managing Director Asia Pacific, Accenture

Interactive Operations Senior Management

Charles H. Giancarlo Director Non Executive Board

Daniel T. London Chief Executive - Health & Public Service Senior Management

David P. Rowland Chairman Executive Board

Debra A. Polishook Chief Executive - Accenture Operations Senior Management

Frank K. Tang Director Non Executive Board

Gianfranco Casati Group Chief Executive, Growth Markets Senior Management

Gilles C. Pelisson Director Non Executive Board

Herbert Hainer Director Non Executive Board

Howard Marshall Director Cyber Threat Intelligence Services Senior Management

Irine Gaasbeek Managing Director Country, Netherlands Senior Management

Jaime Ardila Director Non Executive Board

James Etheredge Chief Executive Officer North America Senior Management

Jean-Marc Ollagnier Chief Executive - Resources Senior Management

Joel Unruch Chief Compliance Officer Senior Management

Joel Unruch General Counsel Senior Management

Joel Unruch Secretary Senior Management

Johan G. Deblaere Chief Operating Officer Senior Management

Julie Sweet Chief Executive Officer Senior Management

Khaled Al-Dhaher Country Managing Director, Saudi Arabia Senior Management

Laurence Morvan Chief of Staff - CSR Senior Management

Marco Huwiler Country Managing Director, Switzerland Senior Management

Marjorie Magner Lead Director Non Executive Board

SOURCE: COMPANY FILINGS M A R K E T L I N E

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Industry Profiles

Table 12: Accenture plc: Key Employees Continued

Name Job Title Board

Mark A. Knickrehm Chief Executive - Accenture Strategy Senior Management

Martine Lapointe Managing Director Montreal Senior Management

Marty Rodgers Senior Managing Director -US Southeast Senior Management

Medb Corcoran Head Accenture Labs, Dublin Senior Management

Michael R. Sutcliff Chief Executive - Accenture Digital Senior Management

Nancy McKinstry Director Non Executive Board

Omar Abbosh Chief Strategy Officer Senior Management

Paul Daugherty Chief Technology and Innovation Officer Senior Management

Paula A. Price Director Non Executive Board

Peter Kolster Hansen Managing Director Next Generation Content

Services Senior Management

Piyush Bhatnagar Managing Director Toronto Senior Management

Richard Lumb Chief Executive - Financial Services Senior Management

Simon Eaves Chief Executive - Products Senior Management

Tom Lounibos Managing Director Accenture Ventures Senior Management

Tracey T. Travis Director Non Executive Board

Venkata Murthy Renduchintala Director Non Executive Board

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

8.3. Capgemini SE

8.3.1. Company Overview

Capgemini SE (Capgemini) provides information technology consulting, and outsourcing services. The company also offers business process management (BPM), cloud services, and product and engineering services. It serves a wide range of industries including banking and capital markets, manufacturing and industrial products, aerospace and defense, agriculture, automotive, consumer and retail, electronics and high tech, energy and utilities, government and public sector, healthcare, and life sciences, and transportation and distribution. The company offers its products and services under Capgemini, sogeti, and Invent brand names. It conducts business operations in the Americas, Asia- Pacific, Europe, the Middle East, and Africa. Capgemini is headquartered in Paris, France.

The company reported revenues of (Euro) EUR13,197 million for the fiscal year ended December 2018 (FY2018), an increase of 5.4% over FY2017. In FY2018, the company’s operating margin was 9.5%, compared to an operating margin of 9.4% in FY2017. In FY2018, the company recorded a net margin of 5.5%, compared to a net margin of 6.5% in FY2017.

8.3.2. Key Facts

Table 13: Capgemini SE: key facts

Telephone: 33147545000

Fax: 33147545025

Number of Employees: 211300

Website: www.capgemini.com

Financial year-end: December

Ticker: CAP

Stock exchange: Euronext Paris

SOURCE: COMPANY WEBSITE M A R K E T L I N E

8.3.3. Business Description

Capgemini SE (Capgemini) offers information technology consulting and outsourcing services.

The company classifies its business operations into four reportable segments: Application Services, Technology and Engineering Services, Consulting Services, and Other Managed Services.

Capgemini has business presence across Asia-Pacific, Americas, and Europe, covering more than 40 countries.

IT Services in South Africa

Industry Profiles

Table 14: Capgemini SE: Annual Financial Ratios

Key Ratios 2015 2016 2017 2018 2019

Growth Ratios

Sales Growth % 12.69 5.24 -0.11 5.37 7.03

Operating Income Growth % 19.81 12.33 3.05 5.75 14.55

EBITDA Growth % 22.22 13.96 2.63 6.25 13.57

Net Income Growth % 93.79 -18.06 -10.97 -10.98 17.26

EPS Growth % 82.96 -15.41 -7.35 -11.50 13.51

Working Capital Growth % -28.07 38.66 -16.20 20.78 -25.00

Equity Ratios

EPS (Earnings per Share) EUR 6.33 5.25 4.76 4.25 5.00

Dividend per Share EUR 1.35 1.55 1.70 1.70 1.90

Dividend Cover Absolute 4.69 3.39 2.80 2.50 2.63

Book Value per Share EUR 40.24 43.18 41.46 44.85 49.84

Profitability Ratios

Gross Margin % 25.82 26.76 27.02 27.05 27.26

Operating Margin % 8.58 9.16 9.45 9.48 10.15

Net Profit Margin % 9.43 7.35 6.55 5.53 6.06

Profit Markup % 34.82 36.55 37.02 37.08 37.48

PBT Margin (Profit Before Tax) % 7.59 7.99 8.87 8.87 9.59

Return on Equity % 16.32 12.67 11.79 9.76 10.16

Return on Capital Employed % 8.59 9.19 10.33 10.20 11.01

Return on Assets % 8.12 5.63 5.06 4.50 4.94

Return on Working Capital % 74.54 60.39 74.26 65.02 99.31

Operating Costs (% of Sales) % 91.42 90.84 90.55 90.52 89.85

Administration Costs (% of Sales) % 15.59 15.74 15.66 15.64 15.68

Liquidity Ratios

Current Ratio Absolute 1.32 1.48 1.35 1.45 1.28

Quick Ratio Absolute 1.32 1.48 1.35 1.45 1.28

Cash Ratio Absolute 0.48 0.51 0.48 0.52 0.52

Leverage Ratios

Debt to Equity Ratio Absolute 0.54 0.46 0.48 0.45 0.49

Net Debt to Equity Absolute 0.41 0.39 0.39 0.35 0.40

Debt to Capital Ratio Absolute 0.35 0.32 0.33 0.31 0.33

Efficiency Ratios

Asset Turnover Absolute 0.86 0.77 0.77 0.81 0.82

Fixed Asset Turnover Absolute 18.65 16.53 16.67 17.21 12.36

Current Asset Turnover Absolute 2.10 2.17 2.09 2.16 2.22

Capital Employed Turnover Absolute 1.00 1.00 1.09 1.08 1.09

Working Capital Turnover Absolute 8.69 6.60 7.86 6.86 9.79

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

Table 15: Capgemini SE: Key Employees

Name Job Title Board

Zhiwei Jiang Chief Executive Officer Insights and Data

Global Business Line Senior Management

Aiman Ezzat Chief Operating Officer Executive Board

Aiman Ezzat Director Executive Board

Andre Cichowlas Director Production / Methods and Support

Delivery Senior Management

Anirban Bose Head Financial Services Senior Management

Anis Chenchah Chief Executive Officer Business Services

Global Business Line Senior Management

Anne Bouverot Director Non Executive Board

Aruna Jayanthi Managing Director APAC and LatAm Senior Management

Carole Ferrand Chief Financial Officer Executive Board

Carole Ferrand Director Executive Board

Cyril Garcia Chief Executive Officer Capgemini Invent Senior Management

Daniel Bernard Vice Chairman Executive Board

Eileen Sweeney Director Manufacturing, Automotive and Life

Sciences (MALS) North America Senior Management

Eileen Sweeney Executive Vice President Manufacturing,

Automotive and Life Sciences (MALS) North America

Senior Management

Elfije Lemaitre Head North American energy practice Senior Management

Franck Greverie Head Portfolio Senior Management

Frederic Oudea Director Non Executive Board

Hans van Waayenburg Director Sogeti, The Netherlands Business

Unit Senior Management

Hubert Giraud Head, People Management and

Transformation Senior Management

Jean Coumaros Head Transformation Senior Management

Jean-Philippe Bol Head Cloud and Infrastructure Services Senior Management

Jerome Simeon Head France Business Unit Senior Management

John Mullen Head North American Markets Senior Management

Kartik Ramakrishnan Executive Vice President Financial Services

Strategic Business Unit Senior Management

Kevin Masters Director Non Executive Board

Laura Desmond Director Non Executive Board

Laurence Dors Director Non Executive Board

Lucia Sinapi-Thomas Director Non Executive Board

Olaf Pietschner Head Australia and New Zealand Senior Management

Olivier Sevillia Head-Europe Senior Management

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

Table 16: Capgemini SE: Key Employees Continued

Name Job Title Board

Pallavi Tyagi Chief Human Resources Officer India

operations Senior Management

Patrick Nicolet Chief Technology Officer Senior Management

Patrick Pouyanne Director Non Executive Board

Paul Hermelin Chairman Executive Board

Paul Hermelin Chief Executive Officer Executive Board

Paul Margetts Head The UK Business Unit Senior Management

Phil Laskawy Director Non Executive Board

Pierre Pringuet Director Non Executive Board

Robert Fretel Director Non Executive Board

Rosemary Stark Director Global Sales Senior Management

Sian Herbert-Jones Director Non Executive Board

Srinivas Kandula Chairman- Capgemini India Senior Management

Thierry Delaporte Chief Operating Officer Senior Management

Virginie Regis Director Marketing and Communications Senior Management

Xavier Musca Director Non Executive Board

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

8.4. Hewlett Packard Enterprise Company

8.4.1. Company Overview

Hewlett Packard Enterprise Company (HPE or ‘the company’) is a technology company that offers compute, storage, and data center networking services, enterprise networking and security solutions. The company provides wired and wireless local area network hardware products such as switches, routers, sensors, Wi-Fi access points, and various software products including cloud based management, network management, analytics and location services. It also offers investment solutions, including leasing, financing, IT consumption, utility programs, asset management services. HPE offers its solutions to commercial and large enterprise groups through resellers, advisory firms, distribution partners, original equipment manufacturers, independent software vendors and system integrators. Apart from all, the company also provide solutions for corporate investments include communications, media solutions and other business incubation projects. It has business presence in the Americas; Europe, Middle East, Africa and Asia Pacific. The company is headquartered in San Jose, California, the US.

The company reported revenues of (US Dollars) US$29,135 million for the fiscal year ended October 2019 (FY2019), an decrease of 6.3% over FY2018. In FY2019, the company’s operating margin was 1.2%, compared to an operating margin of 1.6% in FY2018. In FY2019, the company recorded a net margin of 3.6%, compared to a net margin of 6.1% in FY2018.

8.4.2. Key Facts

Table 17: Hewlett Packard Enterprise Company: key facts

Head office: 6280 America Center DriveSan Jose, California, United States

Number of Employees: 61600

Website: www.hpe.com

Financial year-end: October

Ticker: HPE

Stock exchange: New York Stock Exchange

SOURCE: COMPANY WEBSITE M A R K E T L I N E

8.4.3. Business Description

Hewlett Packard Enterprise Company (HPE) is a provider of technology solutions to optimize the customers' traditional information technology (IT). The company's portfolio of offerings include enterprise IT solutions, including servers, storage, networking, converged systems, software and services and financial solutions. HPE operates in Africa, the Americas, Asia Pacific, Europe and the Middle East. The company operates through four reportable business segments: Hybrid IT, Intelligent Edge and Financial Services and Corporate Investments.

The company's R&D activities focuses on designing and developing products, services and solutions to meet the changing customer needs and desires and to meet the emerging technology trends. Hewlett Packard Labs, together with the various R&D groups focuses on developing next-generation products and solutions integrating emerging technologies. In FY2019, the company spent US$1,842 million on R&D, which as a percentage of revenue stood at 6.3%.

IT Services in South Africa

Industry Profiles

Table 18: Hewlett Packard Enterprise Company: Annual Financial Ratios

Key Ratios 2014 2015 2016 2017 2018

Growth Ratios

Sales Growth % -43.62 -2.56 -4.65 6.86 -5.57

Operating Income Growth % -16.66 116.86 -86.71 -31.73 331.07

EBITDA Growth % -32.89 106.53 -80.37 -23.24 183.31

Net Income Growth % 49.33 28.44 -89.12 454.65 -45.02

EPS Growth % 24.84 -45.73 -23.07 242.97 -33.82

Working Capital Growth % 250.99 -19.86 -60.55 -97.06 -5527.03

Equity Ratios

EPS (Earnings per Share) USD 1.44 1.86 0.26 1.78 1.13

Dividend per Share USD 0.22 0.20 0.38 0.45

Dividend Cover Absolute 8.46 1.34 4.75 2.50

Book Value per Share USD 17.86 18.88 14.71 14.93 13.21

Profitability Ratios

Gross Margin % 32.38 32.28 30.03 29.92 32.58

Operating Margin % 6.26 13.94 1.94 1.24 5.67

Net Profit Margin % 7.92 10.44 1.19 6.18 3.60

Profit Markup % 47.89 47.66 42.91 42.69 48.33

PBT Margin (Profit Before Tax) % 6.23 12.75 0.94 0.87 5.33

Return on Equity % 7.34 10.05 1.47 8.98 6.14

Return on Capital Employed % 3.36 7.39 1.32 1.00 5.06

Return on Assets % 3.39 3.96 0.49 3.26 1.96

Return on Working Capital % 102.82 24.41 66.06 22.26 517.57

Operating Costs (% of Sales) % 93.74 86.06 98.06 98.76 94.33

Administration Costs (% of Sales) % 16.55 17.77 17.36 15.95 16.84

Liquidity Ratios

Current Ratio Absolute 1.36 1.28 1.13 1.00 0.79

Quick Ratio Absolute 1.26 1.21 1.01 0.86 0.67

Cash Ratio Absolute 0.45 0.58 0.51 0.28 0.20

Leverage Ratios

Debt to Equity Ratio Absolute 0.46 0.48 0.56 0.53 0.75

Net Debt to Equity Absolute 0.18 0.09 0.19 0.34 0.59

Debt to Capital Ratio Absolute 0.31 0.32 0.36 0.35 0.43

Efficiency Ratios

Asset Turnover Absolute 0.43 0.38 0.41 0.53 0.54

Fixed Asset Turnover Absolute 3.38 3.72 4.57 4.97 4.78

Inventory Turnover Absolute 10.30 10.47 10.01 9.08 8.13

Current Asset Turnover Absolute 1.20 1.03 1.15 1.59 1.80

Capital Employed Turnover Absolute 0.54 0.53 0.68 0.81 0.89

Working Capital Turnover Absolute 24.27 3.90 4.74 11.46 416.92

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

Table 19: Hewlett Packard Enterprise Company: Key Employees

Name Job Title Board

Alan May Chief People Officer Senior Management

Alan May Executive Vice President Senior Management

Ann M. Livermore Director Non Executive Board

Antonio F. Neri Chief Executive Officer Executive Board

Antonio F. Neri Director Executive Board

Antonio F. Neri President Executive Board

Daniel Ammann Director Non Executive Board

Gary M. Reiner Director Non Executive Board

Jean M. Hobby Director Non Executive Board

Jeff T. Ricci Controller Senior Management

Jeff T. Ricci Principal Accounting Officer Senior Management

Jeff T. Ricci Senior Vice President Senior Management

John F. Schultz Chief Legal and Administrative Officer Senior Management

John F. Schultz Executive Vice President Senior Management

John F. Schultz Secretary Senior Management

Keerti Melkote General Manager Aruba Networks Senior Management

Keerti Melkote President Intelligent Edge Senior Management

Keerti Melkote Senior Vice President Aruba Networks Senior Management

Kirt P. Karros Senior Vice President Finance Senior Management

Kirt P. Karros Treasurer Senior Management

Lip-Bu Tan Director Non Executive Board

Mary Agnes Wilderotter Director Non Executive Board

Michael J. Angelakis Director Non Executive Board

Pamela l. Carter Director Non Executive Board

Patricia F. Russo Chairman Executive Board

Philip Davis Chief Sales Officer Senior Management

Philip Davis President Hybrid IT Senior Management

Raymond E. Ozzie Director Non Executive Board

Raymond J. Lane Director Non Executive Board

Tarek Robbiati Chief Financial Officer Senior Management

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

Table 20: Hewlett Packard Enterprise Company: Key Employees Continued

Name Job Title Board

Tarek Robbiati Executive Vice President Senior Management

SOURCE: COMPANY FILINGS M A R K E T L I N E

IT Services in South Africa

Industry Profiles

9. Macroeconomic Indicators

9.1. Country data

Table 21: South Africa size of population (million), 2015–19

Year Population (million) % Growth

2015 53.7 0.7%

2016 54.0 0.6%

2017 54.4 0.6%

2018 54.7 0.6%

2019 55.0 0.6%

SOURCE: MARKETLINE M A R K E T L I N E

Table 22: South Africa gdp (constant 2005 prices, $ billion), 2015–19

Year Constant 2005 Prices, $ billion % Growth

2015 324.9 2.2%

2016 332.8 2.4%

2017 342.3 2.9%

2018 353.2 3.2%

2019 365.6 3.5%

SOURCE: MARKETLINE M A R K E T L I N E

Table 23: South Africa gdp (current prices, $ billion), 2015–19

Year Current Prices, $ billion % Growth

2015 369.0 8.1%

2016 399.2 8.2%

2017 432.8 8.4%

2018 470.5 8.7%

2019 513.4 9.1%

SOURCE: MARKETLINE M A R K E T L I N E

Table 24: South Africa inflation, 2015–19

IT Services in South Africa

Industry Profiles

Year Inflation Rate (%)

2015 5.8%

2016 5.5%

2017 5.3%

2018 5.3%

2019 5.3%

SOURCE: MARKETLINE M A R K E T L I N E

Table 25: South Africa consumer price index (absolute), 2015–19

Year Consumer Price Index (2005 = 100)

2015 184.3

2016 194.5

2017 204.8

2018 215.6

2019 227.1

SOURCE: MARKETLINE M A R K E T L I N E

Table 26: South Africa exchange rate, 2015–19

Year Exchange rate ($/ZAR) Exchange rate (€/ZAR)

2015 12.7701 14.1685

2016 14.7085 16.2835

2017 13.2851 15.0398

2018 13.2551 15.6192

2019 14.4484 16.1767

SOURCE: MARKETLINE M A R K E T L I N E

IT Services in South Africa

Industry Profiles

Appendix

Methodology

MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross- checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

IT Services in South Africa

Industry Profiles

9.2. Industry associations

9.2.1. World Information Technology and Services Alliance (WITSA)

8300 Boone Boulevard, Suite 450, Vienna, VA, 22182, USA

Tel.: 1 571 265 5964

Fax: 1 703 893 1269

www.witsa.org

9.3. Related MarketLine research

9.3.1. Industry Profile

Global IT Services

IT Services in Europe

IT Services in Asia-Pacific

IT Services in Germany

IT Services in Japan

IT Services in South Africa

Industry Profiles

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