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• Annual Report 2018-19
Shaping the future of software driven business
Management Discussion and Analysis
The following discussion is based on the audited consolidated financial statements of Persistent Systems Limited, and its
subsidiaries and step-down subsidiaries as referred elsewhere in this Annual Report.
In this report, Persistent Systems and its subsidiaries and step-down subsidiaries collectively have been referred to as “the
Company”, reflecting the financial position in the consolidated financial statements. The financial year 2018-19 has been
referred to as “the year” and the financial year 2017-18 has been referred to as “the previous year”.
The consolidated financial statements have been prepared in accordance with Ind-AS.
Our Business
We build software that drives the business of our customers; enterprises and software product companies with software at the
core of their digital transformation.
Over the last twenty-nine years, ever since our inception, the primary focus of our business has remained the same – building
software for our customers. Some of our earliest customers continue to be our customers.
Clearly, the market, the technology, the environment and the context of our business has evolved over the three decades and
we have endeavored to keep pace with these changes. As we reflect on our business through these years, we observe four
distinct phases that the Company has gone through.
In the early years of the Company, our business was focused on working with customers to address specific and core software
engineering needs. The focus was on working on projects as identified by customers. Early customers were core software
companies building data products and start-ups who were working with us to accelerate their product roadmap. In the second
phase, we focused on outsourced product development and provided software development services for all parts of the
product development life cycle. Software product engineering has evolved over the years and today is continuous by design.
It is fundamentally different from IT services or outsourcing in how teams are formed or managed. Software and technology
businesses are constantly shifting their attention between the big picture of continuous product innovation or design and
the details of technology architecture, integrations, and quality. In the third phase we extend our partnership with software
companies by helping them deploy product and helping them with innovative shared ownership business models.
In the fourth phase of evolution we find that all businesses are in the process of digital transformation. Digital transformations
are continuous by design and in method. One-time digital fixes don’t stay current for long. Software-driven transformations
must be continuous to keep up with new and emerging technologies waves. Digital is being software-driven in business.
Having worked with software companies over three decades we have evolved a framework, Software 4.0, which captures
the essence of “how” of a software business and inspires the way we collaborate with our customers – from the born-digital
industry disruptors to multi-generation technology companies or enterprises across industries who are transforming into
software driven businesses.
Our Market
Digital transformation is real, and every business must transform to defend their current business and must find ways to take
advantage of new markets. They must do this in an environment of intense competition that includes traditional incumbents
and new upstart companies that are disrupting traditional markets by using next generation technology.
It was clear that starting with 2018, technologies such as cloud computing, big data and machine learning have become
mainstream. Products have evolved and enterprises are starting on the journey to deploy next generation products.
Worldwide IT spending is projected to total $3.79 trillion in 2019, an increase of 1.1 percent from 2018, according to the
April 2019 forecast by Gartner, Inc.
“The shift of enterprise IT spending from traditional (noncloud) offerings to new, cloud-based alternatives is continuing to drive
growth in the enterprise software market. In 2019, the market is forecast to reach $427 billion, up 7.1 percent from $399 billion
in 2018. The largest cloud shift has so far occurred in application software. However, Gartner expects increased growth for
the infrastructure software segment in the near-term, particularly in integration platform as a service (iPaaS) and application
platform as a service (aPaaS).”