Soa Conference 160909 V0.3

How is business in Europe affected by the economical situation and what is the forecast from a commercial point of view ServiceOne Alliance Conference Madrid. 17th September 2009 BORRADOR

Agenda Introduction: the present economic downturn. Main challenges for the ICT Industry. Why this is not our crisis: hopes. How do we face the economic downturn. Conclusions and actions

Introduction: the present economic downturn. Main Challenges for the ICT industry. Why this is not our crisis: hopes. How do we face the economic downturn. Conclusions and actions.

Introduction: 2009 leaves us a complicated environment… We live in turbulent times . Leading economists acknowledge that the global economy is facing the worst crisis in sixty years . The credit market difficulties that had simmered throughout 2007 erupted into a full-blown financial crisis in mid-September 2008, which broke out during an otherwise promising year for the ICT industry . The global economy is now navigating uncharted waters. Unprecedented events have taken place in the banking sector, finance and credit markets, including the disappearance of several global financial icons, and the consequences are far from clear. We are not before an epoch of changes, we are before a change of epoch. Leonardo Da Vicni

Introduction: 2009 leaves us a complicated environment… The world’s largest economic zones are officially in recession , including the United States, and the European Union. In many ways, the ICT industry is in better shape today than after the dot.com crisis of 2001/2002 . The crisis may challenge many firms, but it will also revitalize the industry and enable new entrants with new technologies to thrive. Technological transformation is at the very heart of our industry. Our industry can only emerge stronger and more resilient from these challenging times.

Main challenges for the ICT Industry Fall of IT budgets. Real impact of the lower demand. Increase competition, with more players fighting for less business with a consequence of erosion of margins Reduction in the coverage of the credit paralysis of fear. ICT Budgets (2009 vs 2008). Source: IDC 2009. Consequences: Fall in the income Difficulties in obtaining liquidity Losses

Introduction: the present economic downturn. Main Challenges for the ICT industry. Why this is not our crisis: hopes. How do we face the economic downturn. Conclusions and actions. Growth of the IT market (2007 – 2010) Some key Data on ICT in Europe Recovery Plan in Europe

Why this is not our crisis?: Hopes. ICTs are pervasive general purpose technologies: Telecommunications and the Internet are now vital service platforms , underpinning much of international trade, global financial system, and personal communications. The ICT industry is a major driver of economic growth and vital industry in its own right, underpinning many other critical sectors. Many technologies still offer huge growth potential , with or without a recession. Certain new computing products, software categories (Software as a Service or SaaS..) and media niches (WiFi radio..) show positive revenue momentum, even while the broader industry is contracting. There will be new opportunities for firms with a disruptive solutions and services portfolio, to prosper, especially where prices are falling and where technology is changing. Investing in innovation and knowledge is even more vital in times of crisis, and could enable the global economy to navigate its way out of this crisis. Ultimately, for an industry founded on innovation and technological change, the financial crisis may challenge some firms, but it will also revitalize the industry and enable new entrants with new technologies to thrive.

Growth of the IT market (2007 – 2010) Source: EITO (European Information Technology Observatory) , PAC

Software and IT Services in Europe Thousands of millions Source: EITO (European Information Technology Observatory) , PAC

Some key Data on ICT in Europe Digital technology (ICT and the consumer electronics sectors) plays a pivotal role for most of the EU policies for knowledge and innovation, growth and jobs, and sustainable development. Digital technology provides the necessary infrastructures underpinning economic growth, which contribute to more than 40% of our overall productivity growth in Europe . The digital technology world market has reached €2 000 billion , and is currently growing at around 4% per year . Europe's Digital technology market represents 34% (1) , and the size of the digital technology sector in Europe represents 4.5% of EU aggregate GDP and even more if the value added of digital in other sectors is also accounted for . (2) The importance of Digital technology to economic and social change is reflected in R&D and innovation budgets worldwide, where Digital technology typically represents more than 30% of the total research effort. Overall, real GDP in the EU is expected to fall sharply in 2009 (by about 2 percent), before recovering by 2010 to some ½ percent of growth. All demand components, except for government consumption and public investment, are being affected by the downturn (3) (1) IDATE, 'DigiWorld Yearbook 2007'. (2) European Competitiveness Report 2006; European Information Technology Observatory 2006 (3) http://ec.europa.eu/economy_finance/publications/publication12486_en.pdf

Recovery Plan in Europe January 2009 The European Commission has also tabled last January 09 a new set of proposals as part of the implementation of the Recovery Plan . The actions presented aim to revitalise the EU economy through investments in selected areas: Energy : A total of 3.5 million € for investment in carbon capture and storage, offshore wind projects and gas and electricity interconnection projects. Broadband : 1 billion € to extend and upgrade high-speed internet in rural communities. According to a recent study, broadband development could contribute to the creation of around 1 million jobs in Europe and to a broadband-related growth of the economic activity of 850 billion € between 2006 and 2015 (1) Tackling new challenges identified in the " health check " of the Common Agricultural Policies: Climate change, renewable energy, water management, biodiversity and dairy restructuring are the challenges and around 500 million € would initially be used to tackle them. The Recovery Plan includes public-private partnerships for research and development in three areas: The 'Factories of the Future ' initiative with a total budget for R&D of 1.2 B€ (public and private). The 'Energy-Efficient Buildings ' initiative with a total budget for R&D of 1 B€ (public and private). The 'Green Cars' initiative with a total budget of 5 B€ (public and private) including in addition to R&D, other expenditures such as procurement of innovations in this field. (1) 10Micus study, "The impact of broadband on growth and productivity", available at: http://ec.europa.eu/information_society/eeurope/i2010/docs/benchmarking/broadband_impact_2008.pdf

Introduction: the present economic downturn. Main Challenges for the ICT industry. Why this is not our crisis: hopes. How do we face the economic downturn? Conclusions and actions.

How SATEC has faced the change Shareholders stability Changes about “Go to Markets”: Product  Services & Solutions Telco centric  New markets Cisco mainly  New vendors & Own products Centralized  Regional distributed National  International Networking  New technologies Horizotal  Vertical Changes about Information Technologies: Processes / Tools / Information Systems You Can't Manage What You Don't Measure Data / Information / Knowledge HHRR & Talent stability: Organization Capacitating / Training Motivation / Coaching Building Empathy Satec goals are to double company revenues and reach industry leading returns during the period 2008-2012 by increasing our presence in customers …

“ Adaptive enterprise”: adapt to change, drivers of change It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change . Charles Darwin Changing for innovation and innovation for competition

Globalization European companies must take advance of the global market That means that we have to look to LOCAL and International markets simultaneously as the way to compete and enhance resources. ServiceOne Alliance could provide opportunities to share solutiones, resources and references to increase our portfolio and market.

Conclusions and actions Share information about opportunities / portfolio / resources, between the S1A members. To offer differentiated services not only related to infrastructure. The commoditation of the infraestructure and the differentiation of the services. To propose value independently of the manufacturers. As integrators, the members of the S1A, try to prescribe, the solutions and services, that really cover the needs and requirements of the customer. In the different activities, of the S1A, we have to fix this position without link it, to a specific vendor.

Soa Conference 160909 V0.3

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