Businessmodel of Mindtree

Customer Segments

Mindtree provides technology and software solutions to customers across multiple business sectors. The Company’s four principal business divisions are organised according to its customer segments:

• Retail, Consumer Packaged Goods, and Manufacturing, comprising original equipment manufacturers, semiconductor companies, and retail organisations;
• Banking Financial Services and, Insurance, comprising banking institutions, financial technology start-ups, and capital markets operators; and
• Technology, Media, and Services, including independent software vendors and media houses; and
• Travel and Hospitality, including tour operators, airline companies, hotels, and travel agents. As of 31st March 2016, Mindtree had 220 active customers, of which 80 accounted for revenue in excess of $1 million, while 29 accounts generated revenue in excess of $5 million, 15 in excess of $10 million, 6 accounts in excess of $25 million, and 2 in excess of $50 million.

Despite being an Indian company, Mindtree’s principal market is the Us, which accounted for around 65% of the Company’s business in India’s 2016 fiscal year. Europe accounted for approximately 65% of the Company’s revenue, while India accounted for only 3%. The remaining 7% was divided across Asia, the Middle East and South Africa.

Value Propositions

Mindtree provides value to its customers in the following ways:

• The quality of its digital and automation products, including its analytics solutions, supply and distribution management software, infrastructure maintenance, and testing services;
• Its industry expertise, with the Company employing highly-qualified employees with high-level experience or qualifications in their field;
• Its alliance partnerships, including collaborations with industry-leading companies such as Microsoft, Adobe, Oracle, IBM, and Hortonworks;
• Its customer-centric approach to business, with the Company establishing long-term and engaging relationship with its clients, collaborating with them to provide the best possible service. ### Channels

Mindtree operates a website at www.mindtree.com, through which customers are able to find information regarding the Company’s various products and services. The Company, however, does not appear to operate an online sales channel.

The majority of Mindtree’s sales come via its in-house direct sales team. The Company operates sales teams across multiple jurisdictions, including offices in India, the US, the UK, Japan, Singapore, Malaysia, Australia, Germany, Switzerland, Sweden, the UAE, the Netherlands, Canada, Belgium, France, Ireland, South Africa and China.

Mindtree also collaborates with a number of channel partners, including distributors and independent sales agents, that extent the Company’s sales reach.

Customer Relationships

While Mindtree operates a website, it does not operate an online sales channel. The Company’s products, therefore, are not available on a self-service basis. Instead, customers must deal directly with members of the Mindtree sales team, through which they are able to access a more tailored services.

The Company attempts to establish long-standing and collaborative relationships with its customers. This is demonstrated by its annual customer experience survey, which is designed to identify any shortcomings in customer relationship management and help to develop engaging client relationships.

Mindtree provides ongoing technical support to its customers, through maintenance contracts. Customers are also able to contact the Company with enquiries or issues by email. Additionally, Mindtree is able to interact directly with its customers through its social media accounts with Facebook, Twitter, YouTube, LinkedIn, Google+, and SlideShare.

Key Activities

Mindtree operates as the principal holding company of the Mindtree Group, an international information technology consulting and implementation group that delivers business solutions through a range of global software development services.

The Company operates across five operational business segments: Retail, Consumer Packaged Goods and Manufacturing; Banking, Financial Services and Insurance; Technology, Media and Services; Travel and Hospitality; and Others.

The Company’s products and services include data analytics and information management platforms, application development and maintenance services, and solutions spanning business process management, business technology consulting, cloud computing, independent testing, infrastructure management, and product engineering.

Key Partners

Mindtree collaborate with a network of partners that provide a range of services. The Company’s partners principally operate within the technology sector. Its partners include:

• Alliance Partners, comprising technology companies, with which the Company shares resources and tools, and collaborates on strategic joint venture projects; and
• Channel Partners, including distributors and independent sales agents, which serve to extend the reach of Mindtree’s own sales and marketing teams. Additionally, Mindtree partners with a several high-profile technology firms, for which it operates as a distributor or reseller. This includes tie-ups with Lansa in Australia and computing giant IBM.

Among Mindtree’s Alliance Partners are high-profile companies such as Microsoft, Adobe, Oracle, IBM, Cloudera, Datastax, and Hortonworks.

Key Resources

Mindtree’s key resources are its technology and intellectual properties, its strategic partnerships, its IT infrastructure and software products, and its personnel – notably its sales and support staff. Searches of records published by the US Patent and Trademark Office and Intellectual Property India identified no patent applications filed in the name of Mindtree.

Cost Structure

Mindtree incurs costs in relation to the research and development of its products, the marketing and sale of its products, the management of its partnerships, the maintenance of its IT infrastructure, and the retention of its personnel.

In 20/2016 Mindtree spent around INR 313 million on research and development. At almost 60% of total revenue, however, employee salaries and benefits represent the Company’s largest expense. The company also accrues significant costs in relation to the operation of its offices across North America, Europe, Asia and the Middle East.

Revenue Streams

Mindtree generates revenue through the sale and provision of various IT and software solutions, including data analytics services, infrastructure management, digital services, and application development. Revenue generated by the Company’s five business segments are categorised as follows:

• Time and materials contracts, with revenue recognised as the related services are rendered;
• Fixed-price contracts, which use a percentage-of-completion method to recognise revenue; and
• Maintenance contracts, which recognise revenue over the period of the contract using the percentage-of-completion method. In India’s 2016 financial year, Mindtree generated revenue of INR 46.9 billion (approximately $715.2 million), up 22% on the INR 35.6 billion recorded the previous year. The Company’s largest revenue generator is its Technology, Media, and Services segment which generated INR 14.5 billion in 2016, followed by the Banking, Financial Services, and Insurance segment which generated INR 11.6 billion.