Lehman Brothers does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this email communication.

Customers of Lehman Brothers in the United States can receive independent, third-party research on the company or companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research at www.lehmanlive.com or can call 1-800-2LEHMAN to request a copy of this research.

Investors should consider this communication as only a single factor in making their investment decision.Please see Analyst Certification and Important Disclosures beginning on page 44.

Alan Hellawell

Managing Director

Global IT Services, Equity Research

212-526-3472

Alan.Hellawel@Lehman.com

Global Sourcing Trends

Table of Contents

I. IT Services Broad Trends Continued Strength in global outsourcing market Megadeal Slowdown Offshore Providers gaining market share IT Services Spending 7% global CAGR 2005-2009 Large firms look to M&A to build scale, tap into talent

pool, and add offerings

I. The “New New” Markets: Asia Portfolio Theory: Not “India or Asia” but “India and

Asia” Many Players Expanding Presence in New New Markets Success Criteria in IT Services Contract Size Across the New New Markets

1

IT Services Broad Trends

2

IT Services: Broad Industry Trends

Continued Strength in global outsourcing market in terms of TCV

Megadeal Slowdown: trend towards size of deals dropping; number

of contracts increasing

Offshore Providers gaining market share

IT Services Spending set to grow (7% global CAGR 2005-2009)

Consolidation: large firms look to M&A to build scale, tap into

talent pool, and add offerings

IT Services largely recession-resistant; overall industry growth outlook promising

3

Global Outsourcing Market: Continued Strength

Total Contract Value is up 3% year-over-year

Source: TPI Index 2Q 2006

4

93 contracts

130contracts

112contracts

158contracts 155

contracts

150contracts

0

12

24

36

48

TCV ($B)

1H01 1H02 1H03 1H04 1H05 1H06

First Half Contract Signings (>$50M) 2001 – 2006

Global Megadeals Seen Slowing Down into 2H06

Fewer Megadeals in 2006.Trend towards average deal-size dropping; number of contracts increasing

Source: TPI Index 2Q 2006

5

3.0

9.3

3.0

4.8

9.2

5.1

11.2

7.7

8.6

11.8

0

2

4

6

8

10

12

14

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06

TCV ($B)

0

2

4

6

8

10

12

# contracts

Industryw ide TCV ($B) Industryw ide Contracts

Industry-wide Mega Deal Contracts (TCV >$1B)

The Trends Favor Offshore Providers

DiamondCluster Study: Onshore Providers Must Shape Up or Ship Out

Buyers of Onshore Services Buyers of Offshore Services

Client Expectations being met from Service Providers

Buyers who abnormally terminated at least 1 outsourcing

relationship in past year

30%

47%

28%

42%

TPI: India-Based Providers Market Share of Industry-wide Contracts Grows

As % of Total Contract Value

2003 2004 2005 2006

1% 1%

4%5%

Source: TPI Index 2Q 2006

Source: Diamondcluster 2006 Global IT Outsourcing Study

6

IT Services Spending: Lehman Brothers Global Forecast

United States

Western Europe

Japan

GLOBAL

2005 ($B) 2009 ($B)

252 324

196

84

617

253

105

818

6.5%

6.5%

6%

7%

CAGR %

Source: Gartner and Lehman Brothers Estimates

7

0

5

10

15

20

25

30

35

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Consulting Solutions Staffing Offshore Outsourcing

Large firms look to M&A to build scale, tap into talent pool, and add offerings

Industry Consolidation Likely

Source: Lyndhurst Partners Review and Lehman Brothers Estimates

8

M&A Activity Involving IT Professional Services Organizations May 05 – Mar 06

The “New New” Markets

9

“New New” Markets Overview

Not “India or Asia” but “India and Asia” – Portfolio Theory

New New Markets no Longer a Potential Destination –

Many Players Expanding Presence

Important Success Criteria in IT Services

“Walking Before Running” – A Brief Analysis of Contract

Size Across the New New Markets

Key Points

10

“New New” Markets no Longer Potential Destination – . Many Players Expanding Presence

Source: neoIT, Lehman Brothers, and Company Sources

11

1. The World is Flat: Global Delivery a Key Ingredient for Success

1895

100

1869

28

LEGEND:

Average working hours per year*

Hourly Labor Cost Index*

381958

19

2225

16

2347

12

19501740

126

Source: NASSCOM and Lehman Brothers Estimates

12

Not “India or Asia” but “India and Asia”Projected Salary CAGR (2005-2010E)

0.0%

3.0%

6.0%

9.0%

Pro

jecte

d S

ala

ry G

row

th C

AG

R 2

005-2

010

Source: neoIT

13

Offshore locations part of a larger “portfolio” approach to diversifying risk, and opening up new “near-shore” opportunities

A recent risk and reward portfolio by neoIT suggested India 60%, Philippines 15% and Vietnam 5% weightings respectively

2. It’s All About The People

727,000

654,000

514,000

242,000

232,0001,773,000

427,000

293,000

210,000

285,000

6,386,000Total Supply of SuitableLow-Wage TalentSource: NASSCOM and Lehman Brothers Estimates

14

Aggregate Suitable Graduate Talent Pool for Offshore IT & BPO

Important Success Criteria in IT Services

Evaluation of ITO/BPO Success Factors

Linguistic Skills

Political Stability

Supportive tax and legal environment

Entrepre-neurialism

Cost-based advantages (labor, etc.)

Educational Infrastructure

Linguistic Skills

Political Stability

Supportive tax and legal environment

Entrepre-neurialism

Cost-based advantages (labor, etc.)

Educational Infrastructure

China

Pakistan

Philippines

Vietnam

Source: Lehman Brothers

Scoring: Philippines 3.75 China 3.5

15

Vietnam 3.25 Pakistan 2.75

Important Success Criteria in IT Services

Global Portfolio Risk vs. Reward

Global Portfolio Risk vs. Reward View in 2006 Projected Global Portfolio Risk vs. Reward View in 2011

Source: neoIT; Lehman Brothers Source: neoIT; Lehman Brothers

16

“Walking Before Running”A Brief Analysis of Contract Size Across the New New Markets

17

We use contract size as a proxy for determining how robust a market is to host significant amounts of offshore work

China: $500,000 to $10 million Philippines: $200,000 to $5 million Vietnam: $50,000 to $1 million Pakistan: $50,000 to $750,000

Lehman Brothers’ Estimated Range of One-Year Contract Sizes

Analyst Certification and Important Disclosures

Analyst Certification:

I, Alan Hellawell, hereby certify (1) that the views expressed in this research email accurately reflect my personal views about any or all of the subject securities or issuers referred to in this email and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this email.

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18

Important Disclosures (cont’d)Mentioned Stocks

Accenture Ltd (ACN - USD28.11) 1-Overweight / Positive J

Risks Which May Impede the Achievement of the Price Target: Our revenue and earnings estimates, price targets, and ratings would be revisited if a substantial increase or decrease occurred in spending on information technology solutions by commerical or public clients, Accenture's utilization and/or headcount, pricing for information technology services, or if the company's Bermuda-based corporate structure and resulting tax rate was materially affected by legislation.

Cognizant Technology Solutions (CTSH - USD62.01) 2-Equal weight / Positive C/J

Risks Which May Impede the Achievement of the Price Target: Our revenue and earnings estimates, price target and rating would be revisited if there was a substantial increase or decrease in spending on information technology solutions by consumers of IT services, if CTSH’s cost structure came under increasing pressure from wage inflation in low-cost locales such as India, if there was a substantial increase or decrease in new bookings in any of its niche markets, if there were any major challenges with carrying out its aggressive headcount increase objectives, or if the competitive pressure from the dominant major players increased significantly.

Electronic Data Systems (EDS - USD22.60) 2-Equal weight / Positive E/J/L

Risks Which May Impede the Achievement of the Price Target: Our revenue and earnings estimates, price target and rating would be revisited if a substantial increase or decrease occurred in new bookings or spending on information technology solutions by commercial or public clients or if EDS were to lose a material portion of its General Motors contract.

Infosys Technologies Ltd. (INFY - USD38.42) 1-Overweight / Positive C/J

Risks Which May Impede the Achievement of the Price Target: Our revenue and earnings estimates, price target and rating would be revisited if a substantial increase or decrease occurred in spending on information technology solutions by clients, trend towards using offshore services, pricing for information technology services, exchange rate of Indian Rupee vs. the US dollar, Infosys' utilization and/or headcount, or the general geo-political situation in that region.

Rolta India Limited (RTI.L - USD3.52) 1-Overweight / Positive A/D/J/L

Risks Which May Impede the Achievement of the Price Target: Our revenue and earnings estimates, price target and rating would be revisited if a substantial increase or decrease occurred in spending on information technology solutions by the government or private clients, Rolta’s utilization and/or headcount, or if there was an unanticipated shift in pricing for technology services.

Disclosure Legend:

A: Lehman Brothers Inc. and /or an affiliate managed or co-managed within the past 12 months a 144A and/or public offering of securities for this company.

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D: Lehman Brothers Inc. or an affiliate has received compensation for investment banking services from the subject company within the past 12 months.

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J: Lehman Brothers Inc. or an affiliate trade(s) regularly in the shares of the subject company.

L: The subject company is or during the past 12 months has been an investment banking client of Lehman Brothers Inc. and/or an affiliate.

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Important Disclosures (cont’d)

Guide to Lehman Brothers Equity Research Rating System

Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2- Equal weight or 3-Underweight (see definitions below) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (“the sector coverage universe”). To see a list of companies that comprise a particular sector coverage universe, please go to www.lehman.com/disclosures.

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Stock Rating

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2-Equal weight - The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

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RS-Rating Suspended - The rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances including when Lehman Brothers is acting in an advisory capacity on a merger or strategic transaction involving the company.

Sector View

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Lehman Brothers Equity Research has 1855 companies under coverage.

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Important Disclosures (cont’d)

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