>IT SERVICES: Consulting and Outsourcing summary takeaways (GOLDMAN SACH)

• A confluence of technology changes is helping boost a cyclical recovery. Although IT services is relatively mature, we find pockets of growth and secular prospects. Across our presenting companies various technology changes were cited as key drivers of growth including the increased convergence of marketing spending and technology integration, the evolution of the application environment and the adoption of cloud initiatives, platform and IP-based solutions enabled by SaaS delivery models.

• Vertical commentary provides a view on distinct industry drivers. Moving beyond the technology drivers, we found various examples of industry specific issues in telco, health care, public services, and financial services driving demand.

• European demand questions continue to linger. With Capgemini presenting at our conference we continued to field demand questions related to Europe. At this point, we know that Europe will trail the US by about 6-12 months given the lagging nature of its recovery. That said, the key leading indicators including major sequential trends in utilization, new head count additions, pipeline activity, offshore efforts, and pricing were pointing the right direction but would not convert to growth until 2H2010.

• MNCs highlighted fully integrated model as a key differentiator. End-to-end capabilities are a requirement for winning large transformational contracts.

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