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You Don't Have to be XL to Excel(TM)

Capabilities Are the Differentiator in IT and KPO Services

Clients look at capabilities as a deciding factor for choosing vendors and partners in the highly competitive Information Technology and Knowledge Process industry. Syntel (Nasdaq:SYNT), a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) services, believes this fact of life and business is here to stay.

According to Syntel CEO and President Prashant Ranade, "IT clients have a sophisticated and nuanced view of the value that their partners can bring to the table, which extends well beyond the size of their revenue or number of employees. A partner's capabilities are not determined by the size of the partner."

He also pointed out that the $2 Trillion global IT industry is fragmented, with no single player holding even a double-digit market share.
Ranade indicates that Syntel's strategy to address this market opportunity is to "focus on selected industries and service lines, invest heavily in IP and industry solutions, and ensure that clients receive the best service possible. At each client organization, our goal is to be known as the best partner, not just the biggest."

This view is endorsed by analysts and industry experts.

In a Wells Fargo Securities research report on the IT industry dated February 25, 2013, Analyst Edward Caso wrote, "We see a re-definition of Tier I and Tier II. The old definition was based on size. We now believe clients' increased sophistication and desire for more from their providers has led to a new division in the minds of buyers."

Caso goes on to write that, "Tier I will be the provider of 'solutions' bringing business consulting, analytics and intellectual property (IP), along with the traditional process excellence."

In an article entitled "Three Rules for Making a Company Truly Great" published in Harvard Business Review's April 2013 issue, authors Michael E. Raynor and Mumtaz Ahmed identified 344 exceptional companies based on consistent Return on Asset performance from 25,000 firms listed in the U.S. from 1966 to 2010.

According to the authors, these exceptional companies "compete mainly by offering superior nonprice benefits." The article notes that "exceptional companies, it turns out, come in all shapes and sizes. IBM qualified, and so did Syntel, even though at the time it was only 0.5% of Big Blue's size."

The success of Syntel's emphasis on capabilities has been reflected in the Company's financial performance, which has consistently outpaced the industry by delivering a CAGR of 17% for revenue and 24% for earnings over the past five years.

To drive greater awareness of this trend towards valuing capabilities over size, Syntel has recently launched a new campaign entitled "You don't have to be XL to Excel™."