Competitive Benchmarking: A Strategic Guide

What Is Competitive Benchmarking?

The IT market is a crowded space in which IT providers of all sizes compete for a share of the spending customers have budgeted for business and technology transformations and modernizations. Knowing where an IT vendor stands against peers in the market and understanding what competitors provide and how successful they are in terms of financial performance are key levers that IT vendors use to build business growth strategies. Competitive benchmarking uses qualitative and quantitative data to rank IT vendors against their peers. Understanding current IT vendor positioning is key to setting a strategy to outperform peers.


Competitive benchmarking is a tool that TBR has been providing to leading IT vendors for nearly 20 years. The tool dives deep into multiple metrics in areas such as revenue, revenue growth and profitability; productivity and resources; operations and investments; and business segments, industry verticals and geographies to construct a meaningful picture of the IT vendor landscape.


While ranking IT vendors across multiple metrics is the first important step, the most essential analysis is understanding why certain vendors are taking leading positions in specific metrics and business segments. Data-driven ranking, combined with a thorough analysis of what IT vendors are offering, what their strategies are and where they are investing for growth, helps vendors understand why their peers are being placed in leading or lagging positions.

Click the video below to discover the fundamentals of competitive intelligence and learn how it can benefit your business strategy

Understanding the Competitive Benchmarking Process

The process of competitive benchmarking begins with collecting data across multiple vendors, ranking the vendors and analyzing their positioning. A very important aspect of competitive benchmarking is establishing common metric definitions and taxonomies that drive the benchmarking process and provide an apples-to-apples comparison across vendors included in the report.


The extensive and thorough collection of financial and nonfinancial information is the foundation for competitive benchmarking. The addition of expert knowledge and impartial opinions by TBR’s analysts about each vendor rounds out the competitive benchmarking process.


For example, TBR’s IT Services Vendor Benchmark is a quarterly research program that covers 31 leading vendors in the IT services segment and analyzes their go-to-market strategies and investments, alliances and acquisitions, resource management practices, and financial performance. The IT Services Vendor Benchmark is one of our largest benchmarks and also one of our oldest, having been publishing since 2002. The report includes 15 metrics across three strategic areas (financial, go-to-market and resource management), along with analysis of three main revenue segments (consulting & systems integration, outsourcing, and support & maintenance) and three geographies (the Americas, Asia Pacific, and Europe, the Middle East and Africa [EMEA]).

Benefits of Competitive Benchmarking

Competitive benchmarking enables IT vendors to understand in which areas they outperform or lag their peers. Understanding the ranking of peers helps vendors close gaps in areas such as portfolios, resources, alliance partnerships and acquisitions. Vendors can also identify opportunities for expansion utilizing areas of existing strength in segments, geographies and industries.

Steps to Conduct Effective Competitive Benchmarking

Effective competitive benchmarking begins by carefully selecting a topic area for the report. The topic can be broad, such as IT services, telecommunications services and software, or a deep dive into a specific business segment such as management consulting, cloud, analytics and AI, or sustainability services. The next step is selecting the vendors to cover in the benchmark. Typically, vendors of similar sizes and business models make the most suitable candidates for benchmark reports. Collecting and analyzing data and categorizing and ranking vendors through visual representations enable analysts to identify leaders and laggards and provide expert opinions around vendor positioning.

Determining Success

Using peers’ performance across metrics, business segments and geographies tracked in competitive benchmark reports enables IT vendors to determine the success of their business strategies. IT vendors can understand how successful they are against specific peers and peer groups, depending on the data cuts and analysis, which can be categorized by service area, specific geography, vendor size and/or vendor business model, among other business facets. Competitive benchmarking also provides aggregate views of trends for the entire group of IT vendors covered in the reports. This helps IT vendors understand historic market growth trends and outlooks and identify areas of improvement for future financial results.

Possible Pitfalls

Competitive benchmarking reports typically include a set number of IT providers determined by specific criteria based on the topic of the report. While competitive benchmarking includes a directional view of overall trends and vendor positioning in each report, it does not represent an all-inclusive global market view of the topic covered in the report. Lack of data availability and accuracy can be a challenge when trying to develop comprehensive competitive benchmark reports. Including too many metrics and too many companies can overcomplicate the analysis and provide inaccurate vendor landscape trends. Additionally, overemphasizing data while not utilizing qualitative analysis tied to the data and specific vendors’ business models might create inaccurate benchmark positionings.

Future Trends in B2B Competitive Benchmarking

The future of competitive benchmarking will be driven by progress in technology. Analyst firms that develop competitive benchmarks will increasingly use big data analytics, AI and machine learning solutions to gain deeper insights from datasets, improve their ability to identify and predict trends, and speed up the benchmarking process and make it more efficient.


Technologies will also help analyst firms change the cadence of their benchmarking process by utilizing systems that enable tracking and comparison of companies in real time. Data visualization tools will also help benchmark developers improve the quality of their reports and increase the value of their insights.


Additionally, an increased emphasis on customer experience and satisfaction will push analysts to customize benchmark reports to address customers’ preferences and specific business needs, thus increasing the value of competitive benchmarks. As long as competitive markets exist, competitive benchmarking will be used by leaders to stay ahead of laggards.


Competitive benchmarking is an essential tool for IT vendors aiming to navigate and thrive in a crowded market. By leveraging both qualitative and quantitative data, vendors can assess their positioning against peers, identify strengths and weaknesses, and develop strategies for growth and improvement.


TBR’s comprehensive benchmarking process, which includes data collection, ranking, and expert analysis, offers valuable insights into market dynamics and vendor performance. As technology advances, the future of competitive benchmarking will be shaped by innovations in big data, AI, and real-time analytics, further enhancing its efficacy and relevance. Ultimately, competitive benchmarking empowers IT vendors to make informed decisions, capitalize on opportunities, and maintain a competitive edge in the ever-evolving IT landscape.


For an in-depth, personalized look at TBR’s competitive benchmarking tools, schedule your Insight Center™ private demo today!

SoftwareOne Strategy Brings Speed, Ease, Flexibility and Low Cost to SAP Clients in DACH Region

SoftwareOne’s Strategy for SAP Clients in DACH

In a June 2024 discussion with SoftwareOne’s DACH (Germany, Austria and Switzerland) leadership, TBR came away with three observations on what might make SoftwareOne a potentially unique player in the SAP ecosystem. At a minimum, SoftwareOne in DACH appears to be taking a different approach to the market opportunities created by the confusion around RISE with SAP, GROW with SAP, migrations to S/4HANA, and the 2027 deadline for the end of ECC support. From the presentation by and discussion with SoftwareOne’s Stephan Timme, president DACH; Vincenzo Boesch, sales leader for SAP Services; and Oliver Berchtold, service director DACH, TBR noted that:


  • SoftwareOne remains focused on customers’ current SAP environments and helping those customers get to S/4HANA and to the cloud. SoftwareOne is decidedly not focused on business processes. TBR believes that distinction, while subtle, matters because almost every other IT services company and consultancy in the SAP ecosystem of SoftwareOne’s scale and larger starts with identifying business problems and processes that need to be fixed and then declaring, “Hey, look at that, SAP RISE is a perfect solution to fixing these problems!” SoftwareOne does not dance around the business issues but instead gets straight to what it excels at: solving the SAP challenges of licensing, migrating and maintaining.
  • SoftwareOne recognizes SAP customers have been struggling with the confusion and costs around S/4HANA and RISE, along with all the other changes wrought by the end of support for ECC coming at the same time as the rise of generative AI (GenAI). During the SoftwareOne analyst event that TBR attended in Austin, Texas, in April, PF Grillet, SoftwareOne’s global SAP leader, told us there has “never been a more complex time for decision-making around SAP.” SoftwareOne’s answer to the confusion is a value proposition rooted in four promises: fast, easy, agile/flexible and cost-effective. TBR would summarize that value proposition and SoftwareOne DACH’s overall approach to clients in one word: And TBR suspects DACH clients value pragmatism.
  • When TBR noted the absence in SoftwareOne’s presentation of the SAP catchphrase “clean core,” Vincenzo Boesch explained that for him and his colleagues, SoftwareOne’s readiness services provided a comprehensive approach to what SAP calls clean core, emphasizing the need to prepare for migration, migrate only what is needed, and then maintain the benefits of a clean core throughout the transition and ongoing functioning of SAP within the client’s environment. SoftwareOne aims to remove complexity and streamline a customer’s environment, modernize and prepare customers for innovation, and then adopt an iterative transformation approach, more focused and agile, to continue the move to full clean core over the time frame best suited to the customer’s needs and capabilities. SoftwareOne recognizes few customers will have the means and the appetite to do it all in one go. In short, SoftwareOne is honest about the challenges, does only what is necessary and sets the client up for sustained success.


On the last point, TBR believes this approach to clean core likely fits the needs of small and midsize businesses with less complex IT environments. In follow-on discussions with TBR, SoftwareOne explained that the company is not targeting all customers but rather focusing on those customers that have limited need for business transformation, already have efficient business processes, and are driven to modernize their ERP and remove the mainly technological limitations of ECC. With enterprise clients migrating complex and highly customized SAP instances, SoftwareOne’s focus purely on SAP runs the risk of discounting business process change management cost and potentially pushes complex and problematic processes into the future, setting clients up for aggravation, not success. Failure seems unlikely given SoftwareOne’s overall track record of success with SAP. A more likely outcome for SoftwareOne would be selling additional consulting services related to complex migrations.

Stepping Back to Look at the Bigger SAP Picture

Just as there has “never been a more complex time for decision making around SAP,” as Grillet said in April, there also has never been a better time for a services firm to take a pragmatic approach to helping small to midsize businesses migrate to S/4HANA. As of 4Q23, GROW with SAP had amassed only 700 customers, which pales in comparison to the estimated 24,000 customers on ECC, 14,600 on S/4HANA and 8,800 in S/4HANA Cloud. Furthermore, GROW’s install base skews toward new logos, suggesting many legacy SMB customers have been comparatively slow to adopt the offering.
SAP will look to change this trend, primarily through its ecosystem, which will present opportunities for partners focusing on the SMB segment. The partners that succeed will recognize the oversized impact that cost and complexity have on SMBs, which are more likely to be resource-constrained in technical staff relative to larger enterprises. These customers are more apt to pursue the simplest path to the cloud possible, aligning closely with how SoftwareOne is positioning its services.
The contrast between SoftwareOne’s pragmatic approach and the strategies of much of the rest of SAP’s services ecosystem is becoming more stark. While RISE and GROW still hold S/4HANA migration at their core, SAP has become vocal about the offerings’ ability to drive multiproduct sales motions. In 1Q24, SAP released new add-on packages for RISE that bundle line-of-business (LOB) suites in finance and supply chain, and the company will look to partners to lead the charge in their adoption.
Yet, cross-selling initiatives risk adding to the complexity of an already challenging migration and implementation process. In the coming years, efforts to encourage business AI adoption will add to the noise for customers simply looking to bring their ERP deployments to the cloud. Many customers, especially SMBs, will appreciate a service provider whose value proposition is a fast, easy, agile/flexible and cost-effective migration. This will be a key differentiator for SoftwareOne as the vendor positions as a services provider capable of cutting through the noise and guiding customers toward the path of least resistance.

Minding the Minefields Before Stepping in Them

During the early days of robotic process automation, some IT services companies and consultancies advised clients to automate their processes before evaluating the efficacies and benefits, betting that automating even less-than-optimal processes would generate cost savings. Predictably, that bet did not always pay off.
Two considerations for SoftwareOne: First, the company should ensure that its message and what it delivers reinforces the pragmatism of speed, flexibility and value. In other words, promote this really well to ensure SoftwareOne’s approach and value proposition stand out in a large and noisy market. Second, in TBR’s view, while Boesch and his colleagues presented a compelling value proposition for SoftwareOne’s DACH clients, this approach will not necessarily apply to the customers that need a broader business process transformation.
For more than a decade, many consultancies and IT services companies have been stressing a business-first and technology-second mindset, but TBR believes SoftwareOne’s approach will appeal to clients – maybe especially in but certainly also outside of DACH – that are similarly focused on pragmatic, technology-first outcomes.

Is India the Right Growth Market for Global Consultancies?

Are All of the Largest Consultancies Right That India Is a Growth Market for Them?

If India’s economic growth story continues apace and global management consultancies continue investing in India-based talent to serve India-based clients, what strategic distinctions between the firms can we expect and what are the firms’ prospects of making India a top-tier market for consulting services? In short, if India is on track to become the third largest economy, will it also be the third largest revenue source for the Big Four, Accenture, IBM and Capgemini, or only for the firms that act first and implement the optimal strategies?


First, here is a quick review of recent India-centric announcements and developments, and TBR’s analysis of the Big Four firms and some of the management consulting peers:


  • While Accenture largely relies on India as the company’s largest offshore delivery hub, the company is also investing for future locally sourced growth, as evidenced by the announced opening of a generative AI (GenAI) studio in the country. Additionally, deal wins, such as with Union Bank of India to design and develop a data lake platform supporting the bank’s data strategy architecture and analytics-enabled reporting capabilities, will arm Accenture with strong use cases as it elevates its GenAI value proposition. Accenture also announced plans to open GenAI studios in China, Japan and Australia, highlighting the company’s culture and willingness to take on risk, which both remain consistent regardless of clients’ subdued discretionary spend.
  • Deloitte continues to diversify its regional opportunities in an effort to build a beachhead in emerging markets including India. Deloitte India released the Digital Public Infrastructure playbook for nations, which we believe will help it drive tech-enabled strategy discussions with India-based state governments as well as other countries in the APAC region as they embark on citizen-centered digital programs.
  • IBM is expanding its innovation and research capabilities in India to strengthen relationships with clients and startups and support digital transformation in the country. In November IBM opened a new IBM Consulting Client Innovation Center (CIC) in Gandhinagar, India. IBM is expanding in emerging Tier 3 cities across India to benefit from access to talent, such as graduate hires, and strengthen its ecosystem. IBM Consulting’s CIC will emphasize expanding asset-led IT services activities around GenAI, hybrid cloud and cybersecurity. IBM Consulting will use security engineering professionals to build cybersecurity platforms and accelerators to automate threat management and improve regulatory compliance.
  • TBR continues to believe KPMG sees India as both a global delivery hub and a market that can help the firm bolster its overall performance over the next decade. We recognize that KPMG is far from reaching its optimal staffing pyramid to support both sets of opportunities, but recent investments suggest the firm is taking the necessary steps to fill the gaps. For example, KPMG announced the expansion of its global delivery center in Kolkata, India. KPMG India also partnered with Lineaje Inc. to jointly pursue supply chain security management opportunities with local clients seeking support for third-party risk management programs.
  • In February Capgemini’s chief technology and innovation officer in India, Nisheeth Srivastava, shared that the company is gearing up for a hiring spree in India for FY25 (ending March 31, 2025) due to an expected surge in domestic business. The ramp-up in hiring aligns with positive industry trends following a challenging FY24 within the IT sector. Srivastava stressed the importance of upskilling in areas such as data, machine learning and AI because of the disparity between industry hiring needs and technical education in India. Srivastava also highlighted the potential for GenAI to expand the workforce through coding-based learning opportunities. Demand for skills such as user experience and interface, data science and cybersecurity is expected to rise in India as vendors increase hiring to meet the market’s need for an evolving skill set within the country.
  • In TBR’s view, EY’s India strategy appears to include amplifying the firm’s India-centric thought leadership through nongovernmental organizations and/or industry groups, such as the Organisation of Pharmaceutical Producers of India. Not surprisingly, much of EY India’s thought leadership has focused on GenAI, with a highlight on the private equity, healthcare and global capability centers sectors.
  • TBR discussed PwC India’s recent analyst event in Gurgaon in a special report, PwC touts India as strategic growth hub, investing in the country’s tech and talent for long-term gains. According to the firm, PwC has seen 30% year-to-year revenue growth in India, driven by India-based clients across a wide spectrum of services. India-based clients look to PwC for integrated solutions in a variety of areas, including supply chain management, human capital management and operations consulting. In addition, clients in the country have matured since 2019 and are more adept at evaluating and buying consulting services.

Strengthening physical presence across India remains a core piece of the consultancies’ strategies to position closely with clients. Through their various collaboration centers, the consultancies bring GenAI expertise, enhanced delivery, increased innovation efforts and expanded portfolio offerings to local clients and partners. Planting themselves in front of clients will validate or negate the consultancies’ strategies of how to effectively connect with and generate new revenues across the region.

Curious About the Performance of Global Systems Integrators in 2023 and early 2024? Check Out the Below TBR Insights Live Session for Insights into the World of Hardware-centric, Legacy GSIs and What Lies Ahead for These Vendors


If the Largest Consultancies Follow the Same Basic Industry Strategy in India, Will They Aall Succeed?

PwC India has focused on five industries — financial services, healthcare and pharma, manufacturing, infrastructure, and retail — which, not coincidentally, are the same industries the Indian government has determined to be strategic for the country’s sustained growth. Looking over the recent developments, the rest of the Big Four, along with Accenture, IBM and Capgemini, are pursuing similar strategies, with all of them potentially over-indexing on a handful of industries and markets.


Discussions during the PwC India event led TBR to ponder the questions posed earlier in this report. In addition, we wonder if price pressures; compelled cooperation among consultancies, IT services companies and technology vendors; and consolidation within these select industries lead consultancies to develop highly specialized talent who become the undisputed go-to for that particular domain or industry? Will PwC or any peers focus on subverticals and carve out a niche? Or will these consultancies cast as wide a net as possible for opportunities in these select industries, creating opportunity for talent mobility (the nice way of saying “poaching”), salary spikes and subsequent margin pressures? This is, admittedly, only one element of these consultancies’ strategies, but given the similarities across GenAI hubs and innovation centers and upskilling local talent, this could be an avenue for one or two of these competitors to separate from the pack.


One final caution or caveat: Transforming India from low-cost delivery factory to a high-value engineering hub is appealing — to the Indian government, to the talent hired into these jobs and to the firms charging Indian companies for higher-value services. But the short-to mid-term outlook will remain aspirational for a bevy of reasons related to India’s systemic and persistent economic challenges. In TBR’s view, as much as global firms continue to pour resources into India to serve the local market, the predominant investment motivation will likely remain the labor arbitrage, lower-cost advantage India continues to provide. For a deeper look on this, see the recent TBR special report, HCLT leads revenue growth among India-centric IT services vendors amid market uncertainties.

SoftwareOne: Gritty, Determined, Local

SoftwareOne’s leadership hosted about 20 analysts for presentations, client briefings and breakouts dedicated to specific SoftwareOne solutions and services. In addition to attending the formal program, TBR analysts met one-on-one with select SoftwareOne leads. The following reflects both summit presentations and TBR’s ongoing research of and discussions with SoftwareOne.

Simplify access to technology

In the year since TBR attended SoftwareOne’s inaugural analyst event in Milwaukee, the company has refined its value proposition and further established its place in the market, in large part by expanding its IT services capabilities and revenues.


During his event opening presentation, Duffy outlined five client priorities that SoftwareOne intends to tackle, all of which echoed the company’s value proposition:

  1. Simplify access to technology
  2. Maximize ROI on technology spend
  3. Enhance workforce productivity
  4. Accelerate cloud adoption
  5. Fast-track results in the AI and generative AI (GenAI) era


The first two priorities align with TBR’s Voice of the Customer research, which shows that IT services and consulting buyers want to get more from their IT investments and expect new technologies, in particular GenAI, will be complementary, compatible and immediately additive in relation to existing technologies.


Overall, in TBR’s view, SoftwareOne has captured the current market vibe and positioned itself well to continue its transformation from a VAR, primarily involved in cloud and software resale, to a truly full-service IT company.

SoftwareOne: “We can predict when they are going to do what”

During the opening presentation, Duffy said that SoftwareOne understands when a client bought their various IT components, how much they paid, how happy they are with IT performance, and when their licenses are up for renewal. In short: “What do clients own and how do they build things?”


That insight, combined with SoftwareOne’s overall approach, allows the company to look at the market through a “customer’s lens” and not through SoftwareOne’s own delineations of its offerings. In TBR’s view, this distinction — which starts with a recognition of how customers think — often becomes clouded by organizational constraints and sales demands within many IT services companies and consultancies. Starting with the client’s business challenges in mind is relatively easy; gaining intimate knowledge of their IT environment and spend is not.


Schlotter, in his presentation, noted that SoftwareOne can “predict when [clients] are going to do what,” because the company has tracked patterns — including software renewals, adoptions, and wholesale changes — across its vast client base. Thomson deepened that point by saying that for SoftwareOne, “IT portfolio management is our value proposition.” Importantly, SoftwareOne sees self-funding innovation as the flywheel that takes the company’s understanding of a customer’s IT environment, including opportunities to optimize that environment, and turns it into new value.


Through initial software cost takeout, ongoing IT asset management (ITAM) services and a focus on licensing expenses, SoftwareOne helps CIOs free up capital to reinvest in technology modernization. As Thomson noted, “Licensing costs were last year’s problem,” so SoftwareOne leads with the value that will come through enhanced technology but always makes explicit that funding will come through savings around licensing. In TBR’s view, this is SoftwareOne’s defining strategic advantage. Full stop.


One last point on SoftwareOne’s thinking about the market and the company’s place in it: During her breakout presentation, Burke emphasized the continuing need to recognize regional differences at client facilities and managing, selling and delivering to all clients in a local manner. The technology, by its own nature, may be region-agnostic, but clients are, by their own nature, local. SoftwareOne, therefore, embraces a be-local, stay-local culture. One can see the echo of intimate knowledge of a client’s IT environment in being enmeshed in a local environment.

Sustained growth is an alliance play

Berry, a recent addition to SoftwareOne, explained the company’s new approach to running partnerships “like a business.” While potentially overly transactional, Berry framed SoftwareOne’s approach as being “proactive with a set of prioritized [strategic partners]” whereby SoftwareOne would invest in joint solutions and joint go-to-market support, while “continuing to support clients gaining access to many software vendors.”


To evangelize within SoftwareOne, alliance partner managers would be the face of that partner while also externally educating the partner on SoftwareOne’s value proposition and capabilities. According to Berry, the alliance partner managers would maintain strategic relationships while also operating “as a business” and supporting and influencing sales efforts.


Recognizing that SoftwareOne’s client base differs from those of the giant IT services companies and global consultancies, Schlotter said that while the majority of customers have already made a commitment to one cloud or another, the corporate (not enterprise) market has less mature cloud environments and remains open to “re-migration” advice — i.e., move to another cloud — from SoftwareOne.


In TBR’s view, having the capability to serve those chance encounters with a willing cloud-hopper should not distract from the overwhelming reality that most corporate and enterprise clients have already made some kind of commitment to a cloud provider.


On specific alliances, Berry and Schlotter noted Microsoft’s importance to SoftwareOne’s revenues and long-term strategy, including the short-term opportunities around Copilot. In Schlotter’s view, “Copilot is a door-opener because now the CIO needs to talk to us.” From the hyperscalers’ perspective, according to Schlotter, among SoftwareOne’s values is the company’s ability to make hyperscalers’ value even “stickier” at a client.


In TBR’s view, no single nonfinancial metric has been more passionately sought by consultancies, IT services companies and hyperscalers than client retention.


During informal discussions and a breakout session with Grillet, two points struck TBR as particularly relevant to SoftwareOne’s partners in the SAP space. First, out of SoftwareOne’s 400 SAP specialists, only 32 reside in the Americas, providing an opening for SoftwareOne’s partners to bring opportunities and greater scale. Second, Grillet noted that around half of SoftwareOne’s new SAP leads come from the company’s own ITAM business, demonstrating — to SAP — a clear differentiation for SoftwareOne. One final note: TBR has reported previously on SoftwareOne’s SAP practice and continues to view the company’s strategy as exceptionally well-suited to SoftwareOne’s capabilities and market position.

Not every superhero wears a cape

TBR’s event perspectives typically include extensive recapping of companies’ client stories, product demonstrations and performance metrics, but we left those elements out of this report. During the event, SoftwareOne provided numerous client stories, extensive details about its capabilities and numbers to support its growth, but we wanted to emphasize that SoftwareOne represents a different kind of competitive threat and partnering opportunity, independent of the usual evaluation metrics. Intimate knowledge of a client’s IT environment, to include licensing challenges and opportunities as well as usage and costs, provides a superpower potentially significant to technology partners and threatening to competitors, especially as we move into a better analyzed and more transparent GenAI era. Forewarned is forearmed, as they say.

How AI Is Shaping IT Infrastructure Purchasing Trends in 2024

Demand for AI servers was strong enough in the beginning of 2024 to have a material impact on hardware manufacturers’ top lines and drive growth after a year of weak demand. TBR research shows that much of the AI-optimized server infrastructure sold in 2023 and during the first half of 2024 was purchased by very large enterprises and cloud service providers, leading many to wonder when broader adoption by companies in the commercial market will begin.
Join Principal Analyst Angela Lambert and Senior Analyst Ben Carbonneau Thursday, July 18, 2024, at 1 p.m. EDT/10 a.m. PDT for an exclusive look at TBR’s latest Infrastructure Strategy Customer Research report, which highlights insights into how the potential advantages of AI have driven a mindset shift in technology investments among organizations of all sizes.



In This FREE TBR Insights Live Session on AI Impact on 2024 IT Infrastructure Purchasing Trends You’ll Learn:

  • The ways marketwide AI enthusiasm has shifted mindsets in the midmarket and enterprise space
  • IT infrastructure buyers’ expectations for AI investment
  • Which other top trends are influencing IT infrastructure purchasers’ spending plans, including the Broadcom-VMware acquisition and sustainability initiatives


TBR Insights Live sessions are held typically on Thursdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous sessions can be viewed anytime on TBR’s Webinar Portal.
For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

From Front to Back Office: A Look at GenAI Use Cases in Telecom

GenAI Use Cases Span All Aspects of CSPs’ Businesses, From the Front Office to the Back Office

Generative AI (GenAI) will be utilized in all major domains of communication service providers (CSPs), including in customer care, administrative functions, IT, sales, marketing and the network, with the bulk of outcomes pertaining to cost savings.


TBR’s research indicates the domains that will be the most disrupted by, and also yield the greatest ROI from, the use of GenAI are customer care, administrative functions and sales. For example, the cost of operating contact centers could be reduced by as much as 80% via the use of GenAI.


In addition to significant cost reduction, CSPs can expect to derive other benefits from GenAI, such as better customer outcomes and lower churn compared to more traditional, human agent-centric contact centers. GenAI chatbots are expected to behave like seasoned, top-rated human agents, able to guide customers and address their issues in a much more efficient manner.

Principal Analyst Chris Antlitz Discusses AI/GenAI Use Cases and Early Wins as well as Shortfalls of the Type of Return on the Heavy Investments in 5G and 6G — Click the Image to Watch the full video now!


The Majority of Outcomes From GenAI for CSPs Will Relate to Cost Reduction While Revenue Generation Is Likely to be Minimal

Though CSPs may generate incremental revenue from GenAI in terms of revenue protection (e.g., using GenAI in contact centers to mitigate churn), upsell (e.g., using GenAI in contact centers to upsell customers), GPU as a Service (e.g., selling access to GPUs to CSPs’ end customers in data centers hosted by CSPs) and the resale of vendor solutions (e.g., CSPs reselling their partners’ GenAI-related solutions), the bulk of the benefit from GenAI will pertain to cost reduction.


Cost reduction encompasses making the workforce more productive (e.g., using GenAI to augment workers, enabling them to complete more tasks in a given time frame), optimizing the workforce (e.g., reducing headcount), and generating savings through non-labor-oriented means such as via energy optimization (e.g., leveraging GenAI to make more informed decisions about how to optimize network and IT systems, thereby reducing energy usage).

Informatica Unveils ‘ChatGPT for Enterprise Data’ Amid GenAI Boom

Disruptive technology is anything but stagnant. From the hyperscalers pushing the parameters of their latest large language models (LLMs) to other firms trying to provide their own models in an arguable race to the bottom, the lines of the generative AI (GenAI) stack are blurring.


In many ways, this activity is good, elevating innovation, competition and the role of the partner ecosystem, which will increasingly define how cloud vendors go to market in years to come. But at the same time, it is fueling the proliferation of unstructured data and adding to the already complex and redundant IT estate with yet another LLM, another vector database, and more third-party AI orchestration and integration tools.


Informatica is on a mission to break through this added complexity, honing the metadata system of record that defines Informatica Data Management Cloud (IDMC) to account for the latest models, databases and integrations that must play friendly with customers’ existing applications.


Of course, the challenge remains getting customers to think about data ahead of GenAI amid all the hype. At TBR, we often talk about how GenAI models are only as good as the amount and quality of data that are fed into them. Garbage-in, garbage-out should be self-explanatory when it comes to data’s role in LLMs and GenAI, and yet effective data management is still often overlooked or deployed too late within the enterprise.


Corporate culture, executive pushback and integrating point solutions remain among the top obstacles, and according to TBR’s 2H23 Cloud Infrastructure & Platforms Customer Research, 35% of respondents are taking a best-of-breed approach to data management, resulting in fractured data silos. That is why the Informatica World 2024 opening keynote theme — “Everybody’s ready for AI except your data” — rang true and speaks to an opportunity for Informatica, and increasingly its consulting partners, to address as customers try to navigate GenAI’s complexities and ultimately take advantage of GenAI’s opportunities.

TBR’s Leading Analysts Discuss Use Cases, Risk and Governance, Commercial Strategies, and Resource Management for Cloud and Software Applications in GenAI: Watch the Full Video Below Now

“CLAIRE GPT is the Chat GPT for Enterprise Data”

IDMC is the culmination of a five-year, $1 billion R&D investment, and executives have clearly articulated the pace of innovation will only accelerate with a meticulous focus on improving the native functionality in each of IDMC’s seven core modules.


At the event, product leaders for each of these components (e.g., Data Governance, Integration PaaS [iPaaS], MDM [Master Data Management] & 360 Apps) got on stage to showcase their innovations over the past year. They discussed not only core innovation, which could be anything from improving the user experience to adding new prebuilt connectors and extensions, but also a set of innovations specific to CLAIRE — for example, an automated assessment of metadata in MDM.


All these new added capabilities highlight Informatica’s goal of infusing GenAI into every component of the IDMC platform. Perhaps the best example of this strategy, though, is CLARIE GPT, which was first announced at last year’s Informatica World conference and is now generally available. The year 2023 was largely one of execution, as Informatica worked to put the AI engine, trained on vast amounts of intelligent metadata already sitting in CLAIRE, through preview, solicit customer feedback, and prepare for its release to the general public with a fresh message: “CLAIRE GPT is the ChatGPT for enterprise data.”


To see this message in action, we were given a hypothetical scenario in which a marketing operations analyst tasked with retaining disengaged customers uses natural language prompts in CLAIRE to find the right data sets and ask questions about that data. For example, the analyst can ask CLAIRE GPT to list data sets for marketing campaign analysis, and CLAIRE will pull the appropriate data, including those sitting in multiple systems like data warehouses and BI tools.


But Informatica actually delivering capabilities like CLAIRE GPT with IDMC for customers’ GenAI projects is only one piece of the puzzle. Informatica is also using GenAI to improve the underlying platform capabilities and deliver a unified natural language experience in IDMC. In a move that is now table stakes among SaaS, PaaS and IaaS vendors, Informatica is creating its own Copilot — CLAIRE Copilot — to auto classify and enrich master data.

IDMC Modernization Initiatives Well Under Way

Aside from offering new IDMC capabilities and releasing CLAIRE GPT, 2023 was a major year for modernization, which was a big theme at this year’s event. With license revenue down 68% year-to-year in 2023 and cloud subscription revenue up roughly 40% over the same period, Informatica is executing on its strategy of ceasing new license sales and enhancing programs to help customers move to IDMC in the cloud. This includes strengthening the existing modernization packages for legacy PowerCenter, MDM and Governance workloads with fresh automated tooling, including CLAIRE Copilot for PowerCenter (available in 2H24); increasing partner certifications; and growing these programs within larger accounts.


One of the more compelling customer modernization success stories from the event was Takeda Pharmaceuticals, which in the span of 18 months was able to consolidate the 12 data centers still running PowerCenter down to three.


Chief Data Officer Barbara Latulippe told a story of how Takeda wanted to become GenAI ready but recognized that modernization was the initial step and that migrating the low-risk and simple applications first was the recipe for success. The second phase for Takeda was consolidating 6 different MDM environments into one, which ultimately paved the way for the company to adopt other IDMC capabilities, including the Informatica Cloud Data Marketplace, on which the company is now live today. As was the case with Takeda, customers that go through the modernization process will ultimately ask how GenAI can be used to create value.


We expect data marketplaces to play an increasingly important role here; if a customer needs to automate a certain business process and thus locate the right LLM for that process, as well as the right data to contextualize said LLM, one-click experiences will go a long way, further democratizing GenAI and making it fairly seamless for customers to turn a regular application or process into one that is GenAI-enabled.

Informatica’s Relationships With All Hyperscalers Are Maturing, but Work with Microsoft Fabric Is a Big Win for Both Companies

For any cloud platform company, integrating with all the major hyperscalers is no longer a unique strategy but a prerequisite. As we continue to follow Informatica, however, there are some strategic ecosystem moves the company is making in both its product and go-to-market strategies to reach new customers and protect its positioning as the most neutral data management provider.


One key example is Informatica’s fast-growing relationship with Oracle, which Informatica formerly recognized as a hyperscaler partner two years ago. While other platform companies are closely aligned with Amazon Web Services (AWS), Azure and Google Cloud Platform (GCP), many have yet to account for OCI (Oracle Cloud Infrastructure), which could be due to a lack of maturity, including how Oracle cosells with ISVs in the cloud.


But as a key member of the legacy Oracle Database ecosystem for some time, Informatica has been able to quickly elevate its relationship with Oracle around OCI and now serves thousands of Oracle customers in North America alone. Informatica recently made Data Governance & Catalog available natively on OCI — ahead of GCP, which will support this capability later this year — and is expanding to more OCI regions.


But the most transformative ecosystem development highlighted at the event was Informatica’s work with Microsoft, specifically how it is filling whitespace within Fabric, Microsoft’s own answer to data management in its broader pursuit of GenAI dominance. Specifically, Informatica is coming in with its Cloud Data Quality solution native to Fabric, which means that as customers ingest data into Microsoft Fabric’s OneLake repository, Informatica ensures the data can be automatically profiled and assessed in real time.


Unlike many other partners that are joining Microsoft’s partner program as ISVs building and selling applications on top of Fabric, Informatica has signed on as a design partner, an exclusive invite-only track that allows partners to create entirely new workloads consumed natively within the Fabric solution. This distinction is important, as it essentially embeds Informatica’s Data Quality tooling directly within the customers’ analytics workflow and ensures Informatica can offer Microsoft’s roughly 11,000 Fabric customers access to IDMC in the back end and increase the likelihood they explore other aspects of Informatica’s platform.


Though Fabric is touted as an end-to-end SaaS solution serving the entire data life cycle, Microsoft understands its gaps and recognizes the trust customers place in Informatica when it comes to data integration, quality and governance. Letting Informatica fill whitespace around Fabric, an integrated platform that is underpinned by a data lake architecture, is a strategic move for Microsoft and should be noted by Azure competitors that similarly partner with Informatica but in some ways lack Microsoft’s platform mentality; to us, the Fabric-Informatica integrations only reinforce how aligned Azure and Informatica are as two platform-centric companies understanding the symbiotic relationship between data and GenAI.

Final Take

In many ways 2023 was an execution year for Informatica. Since last year’s event, when Informatica showcased CLAIRE GPT, the company has been adamantly focused on bringing the GenAI engine into general availability, all the while delivering a broader and deeper set of AI-rich features natively within IDMC.


Meanwhile, with momentum for PowerCenter migrations, which in 1Q24 accounted for 80% of all Informatica’s modernization deals, and early success of the MDM program, modernization has been a key initiative for the company, driving cross-selling opportunities and pushing Informatica closer to the $1 billion cloud annualized recurring revenue mark.


Rallying a cohesive ecosystem — made up of hyperscaler and global systems integration partners that are expanding their certifications as part of these modernization programs — around IDMC will remain key to Informatica’s success, ultimately allowing the company to cross-sell more services and ensure IDMC becomes the de facto way customers get their data ready for GenAI.

PwC Touts India as Strategic Growth Hub, Investing in the Country’s Tech and Talent for Long-term Gains

Vibrant, Multinational and Driving Change: India and PwC India

Consensus among presenters and attendees that India will be a massive growth market for PwC over the next few years underscored every aspect of the early May event, tempered only, perhaps, by the sentiment expressed by a number of PwC leaders and clients that India is a great growth market right now.


A shared assumption among the analysts and PwC leaders and professionals, based on the presentations and numerous sidebar conversations, was that today’s investments in India-based talent and technologies will be considered, in 10 years, to have been foundational and strategic for PwC. In short, everyone presenting was bullish on India as a market in its own right. Coincidently, The Economist published a special report on India the week before the analyst event and noted, “Since 2012, India has been the world’s fastest-growing large economy” and “the number of new business registrations in India has tripled since 2015.”


Martin Scholich, PwC’s deputy global advisory leader, described India as an “open, fast-growing, technology-driven market.” Arnab Basu, advisory leader for PwC India, added that the Indian economy has spurred the development of more “vibrant, large, multinational Indian companies,” clearly a plus when it comes to expanding PwC’s India client base.


Ritu Rekha, a partner and leader of finance transformation and a co-leader of business transformation for PwC India, noted the recent expansion of Global Capability Centers (GCCs) in India and explained that the value proposition of GCCs was evolving from cost savings to capabilities expansion to innovation, with PwC facilitating those changes and enabling growth. Basu added that the changing nature of the work completed at these centers provides a greater opportunity for PwC to bring consulting value to clients.


PwC India Chair Sanjeev Krishan noted the Indian government’s desire to see GCCs expand beyond traditional IT hubs and call centers into facilities focused on engineering services and innovation. Krishan added that PwC India is aligning with India’s road map and the priorities outlined by the Indian government, to include a sharpened focus on certain industries, and supporting the domestic market (India businesses built to serve India clients).


Krishan rounded out his talk by asserting that disruption around the world could be a net positive, as India is ahead of the curve in not only adapting to technology and business shifts but also mitigating other countries’ supply chain challenges. Excitement and growth mixed with opportunities that are based on chaos elsewhere but grounded in increasing internal stability are a good recipe for a country as well as a professional services firm.

Discover What Lies Ahead for IT Services and Consultancies in the Era of GenAI: Watch the Video Below Now

GenAI for the Many Indias

When talking about generative AI (GenAI) — whether in a breakout session dedicated specifically to the technology, during an individual client case study or as part of a larger discussion about the firm — PwC’s leaders repeated a consistent refrain around skills: The technology itself is not a challenge, but people can be.


PwC needs professionals skilled enough to not only develop the GenAI-enabled solutions that clients want but also bring in the right expertise to meet a client’s broader-than-technology goals. In short, GenAI has further accelerated training imperatives across the full spectrum of everything PwC delivers. GenAI is not replacing people but challenging the firm to make everyone more valuable.


During a panel session, Scott Likens, PwC’s global AI and innovation technology leader, explained that the firm adopted a “people-first strategy” with respect to all AI, with an emphasis on safety and responsibility. He further noted that within PwC at the partner level, training around GenAI has been greater quantitatively than any other nonmandated training, a sentiment echoed by other PwC partners in attendance.


Turning from internal to external support, Likens said that because “everyone can use GenAI,” the firm “must reskill and upskill,” while adding that PwC’s clients have looked to the firm for help in training clients’ own professionals. Likens also noted that while GenAI tools can be global in nature and application, they — and the professionals using them — must adhere to local standards and regulations, echoing one of the recurring themes throughout the event that global solutions and capabilities need to be tailored to the local audience.


To that point, Rajnil Mallik, partner and leader of GenAI at PwC India, reminded analysts, “There’s not one India; there are multiple Indias,” with companies of all sizes across every sector operating in vastly different regions and markets. Mallik continued to explain that PwC’s clients have been seeking advice primarily around GenAI use cases, data management, risk and necessary organizational changes and the firm has been recommending that more mature clients create an internal GenAI lab where they can focus on all AI and analytics efforts. Mallik cautioned that “for GenAI to reach [its] potential, must have some regulation” and made a comparison to the regulations and oversight of the oil and gas industry.


In a presentation focused on PwC India’s work with the government of India on a federal GenAI strategy, Santosh Misra, PwC India Partner, said the government’s priorities around GenAI started with compute power and data. The government of India understood the urgent need to address future skills with current investments, intended to fund multiple AI innovation centers and vowed to work with the GenAI startup community.


Along with these priorities, PwC was advising the government on fully embracing Trusted AI, a sentiment circling back to Likens’ “people-first strategy.” In TBR’s view, the GenAI discussions during the event provided a continuation of PwC’s strategy and story from the last few years, including the firm’s emphasis on people (skills) and client needs (not just related to the technology). The new elements in May 2024 were PwC’s close alignment with the government of India’s GenAI strategy and the firm’s responsiveness to the realities of the Indian market.

A Hunger for Partnership: Why Clients Want to Work with PwC

Notably reviving one successful component from PwC India’s 2019 analyst event, the firm once again included eight separate and diverse client use cases, including manufacturing tires, providing financial services, and enhancing government operations. While each client story provided unique perspectives on PwC’s capabilities and strengths, three common threads stood out to TBR.


First, the clients who presented were almost all techies: CTOs, heads of IT, chief information security officers (CISOs), and one exceptional client who was both the CFO and head of IT at her company (an almost perfect persona for PwC). While every use case included some traditional consulting services, the underlying current remained centered on the technological capabilities and partnerships that PwC could bring to its clients. In TBR’s view, who PwC now serves demonstrates the long-gestating shift across the entire firm, from technology-agnostic professional services to technology-imbued consulting.


Second, the use cases themselves demonstrated the breadth of PwC’s consulting capabilities, from cybersecurity managed services to cloud migration to RISE with SAP to blockchain platform building. Again, PwC and its clients mentioned traditional consulting services, such as assessment and road mapping, but the variety of use cases highlighted the diversity in PwC’s capabilities and offerings.


Lastly, every client — including the greenfield RISE with SAP example — described a long-standing relationship with PwC and included cultural fit and shared values in their reasons for selecting the firm for their specific use case. In TBR’s view, those longitudinal relationships explain the kind of answers clients provided to the question, “Why did you work with PwC?” which included the following:

  • PwC displayed a “hunger for partnership.”
  • “Cultural match, speed and technology capabilities.”
  • Experience, capability, availability and consistency


TBR recognizes that PwC does not have a monopoly on the multidisciplinary professional services model and that any collection of eight client use cases from a PwC peer could be as diverse. Not being unique does not detract from the impressiveness of a wide-ranging set of capabilities and offerings and the execution needed to bring those services to clients at scale.

Seamless Execution, or the Satisfaction of a Job Well Done

In contrast to consultancies that mostly sell road maps, continually add on services to extend an engagement, or sell the A team and then send in the C team, PwC is believed by its clients and own staff to be the firm that gets the job done.


PwC leaders in India, both the PwC India partners and the global partners, repeatedly echoed each other in their commitment to delivering tangible results, not just planning and talking. As Krishan expressed during his keynote address, “How can I make [clients’ and PwC professionals’] execution seamless?”


As the consulting business model continues its slow and uncertain evolution, with PwC peers like EY and KPMG also searching — globally — for the best strategies and clients looking for more results and reduced spending on tech, PwC’s adherence to getting things done should resonate across the ecosystem and allow the firm to both retain its most important clients and expand, particularly in fast-growing markets such as India.

Could M&A Activity in the Federal IT Services Market Surge in 2025?

What Caused the Initial Slowdown in M&A Activity in Federal IT Services?

In March 2022 the Federal Reserve raised the federal funds rate for the first time since 2018, increasing it by 0.25% Prior to this, contractors like Accenture Federal Services (AFS) and Booz Allen Hamilton (BAH) had been rapidly acquiring digital transformation capabilities to capitalize on the demand for IT services as well as emerging technologies from the Department of Defense (DOD) and Intelligence Community (IC).

Macroeconomic Pressures Mount

M&A activity by the vendors tracked in TBR’s Federal IT Services Benchmark began to slow down over the course of 2022 as borrowing rates continued to increase and target company valuations climbed. IBM Consulting’s acquisition of Octo Consulting during 4Q22 to expand the federal unit’s digital transformation capabilities for defense and civilian agencies signaled the end of meaningful M&A activity by IBM Consulting and these 10 other benchmarked competitors: AFS, BAH, CACI, CGI Federal, General Dynamics Technologies (GDT), ICF International, KBRWyle, Leidos, Maximus and SAIC.

What Have Vendors Been Doing to Counteract the M&A Slowdown?

In 4Q23, statutory and organic* revenue growth rates converged for the first time ever in TBR’s Federal IT Services Benchmark. These rates remained essentially the same during 1Q24, reflecting the lack of M&A activity in federal IT.


Vendors have been monitoring opportunities over the last couple of years but are largely prioritizing using their free cash flow to repurchase shares, make internal investments or reduce debts. For example, while ICF pursued an aggressive M&A strategy between 2020 and 2022 to penetrate the federal health market by vastly expanding its digital modernization business’s capabilities, the company has since focused on making its balance sheet healthy again while interest rates remain elevated.


Most vendors have also turned to strengthening their relationships with existing partners and expanding their alliance ecosystem while M&A has been off the table. For example, General Dynamics Information Technology (GDIT), a segment of GDT, has been working with Fornetix to capitalize on the DOD’s Combined Joint All-Domain Command and Control (CJADC2) vision by demonstrating zero trust security at the tactical edge during military exercises.

Click the Image Below to Watch: Senior Analyst John Caucis and Analyst James Wichert review key trends and happenings for the federal IT services market in 2024 as well as provide their outlook for the sector

A Different Route

Some vendors are also being creative. For example, BAH has seemingly favored making venture capital (VC) investments after spending over $725 million on M&A within a two-year period. By doing so, BAH can safely expand its capabilities and relationships without needing much financial leverage.


BAH launched Booz Allen Ventures, the company’s $100 million VC arm, in 3Q22. Since then, BAH’s capital allocation strategy has increasingly favored funding small promising companies that are innovating with emerging technologies. For example, in 3Q23 BAH invested in a startup AI security solutions developer called Hidden Layer.


Maximus also unveiled its own VC arm in 4Q23 called Maximus Ventures. However, unlike BAH, Maximus has not publicly shared any investments it has made with its VC arm and has stated little about Maximus Ventures other than noting the business was beginning to establish relationships with Seed to Series C partners.

Is M&A Activity Ramping Back Up?

While multiple leading federal systems integrators have indicated they will continue to deprioritize M& during 2024, there have been signs that company valuations have begun to decline, which could cause M&A activity to pick back up.

Recent Moves

ManTech was taken private by the Carlyle Group in September 2022 for $4.2 billion. As ManTech’s restructuring efforts continued, it leveraged the private equity company’s financial backing in September 2023 to purchase IT contractor Definitive Logic Corp. The move expanded not only ManTech’s headcount by 330 but also its AI, cloud and other digital transformation capabilities. It also expedited ManTech’s plans to provide a wider array of services to clients, such as by launching a digital transformation consulting practice.


While the acquisition of ManTech was notable, the biggest move from the vendors we cover came from AFS. In April the business announced its intent to buy digital transformation and cloud computing firm Cognosante. The deal was finalized in May and adds around 1,500 people to AFS’ workforce, strong relationships with health IT customers as well as a new health portfolio.


Shortly afterward, Deloitte announced it had acquired Gryphon Scientific. While this acquisition is significantly smaller in comparison to the other two acquisitions (Gryphon Scientific is expected to add around $6 million to $8 million in inorganic sales over the next year), it expands Deloitte’s public health research and advisory capabilities with AI and increases Deloitte’s expertise in biosecurity and data science.


These recent moves by AFS and Deloitte show that vendors are becoming increasingly interested in lucrative public health opportunities. While they could signal that a period of renewed M&A activity in federal IT is beginning, it is important to note that AFS and Deloitte have fundamentally different business models than most other federal players. They also have the scale and financial backing from their parent companies that most others do not have.

TBR Expectations for the Federal IT Services Market in FFY2025

When the M&A environment actually begins to ramp up, we anticipate that vendors will prioritize acquiring peers that can expand their niche capabilities in AI, cloud, cyber, electronic warfare (EW) and other areas as the DOD, IC and civilian agencies are showing more interest in emerging technologies. While private equity firms remain interested in expanding their capabilities in these areas as well, they will be under greater scrutiny by the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) Antitrust Division. These agencies published a request for information in May to assess how serial acquisitions are impacting competition in multiple industries including defense and cybersecurity.


If Tier 1 vendors do revive M&A activity in federal fiscal year 2025 (FFY2025), expect CACI to be one of the first to get involved. CACI has historically used acquisitions to expand its capabilities and penetrate new markets. Do not expect to see vendors abandon their alliance ecosystem or their joint ventures if this happens, though. Vendors will increasingly lean on the hyperscalers and partners that can help expand their capabilities with the emerging technologies as discussed in TBR’s U.S. Federal Cloud Ecosystem Report.



*TBR calculates organic growth based solely on the impact of acquisitions, unless the company in question provides guidance regarding the impact of divestitures on its top line. We consider the calendar quarter in which the acquisition was made to be the first of four calendar quarters, or one full year, in which inorganic revenue from the acquired company accrues to the acquiring company’s top line. After the one-year anniversary of the acquisition, we consider the peer purchase to be fully integrated from a revenue standpoint.

HCLT Leads Revenue Growth Among India-centric IT Services Vendors Amid Market Uncertainties

HCLTech and TCS Drive Revenue Growth with Digital and AI, While Cognizant and Wipro Face Financial Sector Challenges

As macroeconomic uncertainty permeates clients’ technology buying decisions, IT services companies have positioned around technology-driven services, opening the door to sustained relevance and revenues. While Cognizant, HCLTech, Infosys, Tata Consultancy Services (TCS) and Wipro are all usually lumped together as India-centric vendors, each IT services company leads with its own strengths and market focus to best drive clients’ transformation projects.


HCLTech led revenue growth among the five major India-centric IT services companies in 1Q24, increasing 6% year-to-year, followed by TCS, which reported 2.3% growth over the same time period. Both TBR and the companies attributed growth to improvements in digital business, cloud migrations and AI productivity services, which helped clients enhance their IT environments and business processes. HCLTech’s and TCS’ deep expertise around digital services, such as for security, applications and workplace transformation, enabled both companies to build off existing client relationships and upgrade clients’ business environments.


In contrast, Cognizant and Wipro reported year-to-year revenue declines of 1.1% and 5.2%, respectively, in 1Q24, with both companies indicating that new opportunities have been limited due to pressures within financial services. Market pressures continue to hinder Cognizant’s opportunities, pushing the company to focus primarily on its existing client base.


Wipro reported the addition of 60 new clients during 1Q24 and an increase in active clients for the first time since 4Q22 as the company expanded activities with healthcare and insurance clients, including customer experience transformations, automation adoption and AI deployments for more efficient workflows. However, limited success could not overcome ongoing declines within total reported bookings.


Wipro reported that total bookings fell 13.5% year-to-year to $3.6 million during 1Q24. Declines in APMEA due to a reduction in low-margin accounts in favor of pursuing higher-value transformation projects hinder benefits from new logo additions. Further, economic pressures limit Wipro’s ability to generate higher-value projects in EMEA.


Because of ongoing market pressures, the five major India-centric IT services companies look within and prioritize their existing client bases to drive revenue generation. Further, the emphasis on large deals to make up for the deficit left by limited client spending brings out vendors’ experience and capabilities that reach across needs and functions throughout clients’ organization.


Take Infosys as an example: Making broad-based investments in innovative portfolio offerings, largely enabled by Infosys Cobalt, along with upskilling existing employees and recruiting higher-caliber talent in onshore and nearshore locations, paid off as Infosys proved to clients that the company could execute on IT services at scale, even in a challenging environment. Infosys Cobalt serves as a foundation for the company’s cloud management, comprising a set of services, solutions and platforms including 35,000 cloud assets and over 300 industry cloud solution blueprints.

TBR Senior Vice President Dan Demers and Principal Analyst Patrick M. Heffernan dive into the trends expected to shape the market in 2024, including GenAI’s impact on ecosystem alliances and how clients use TBR’s research and analysis to add context to strategic questions and address challenges around alliance enablement

Investment Focus Areas

To fuel the larger deals, the five highlighted India-centric IT services companies executed across portfolio innovation efforts, developing solutions that apply technologies such as AI, digital and cloud to essential processes and embedding them within workflows. Further, equipping employees to work with the new solutions and technologies remains essential to fully capitalize on investments. During 1Q24, these companies rolled out the following solutions:


  • TCS launched an immersive lab to deepen employee knowledge about AI technology. TCS has already trained over 150,000 of its employees in the foundational skills of AI and generative AI (GenAI), and the AI Experience Zone will help foster engagement from employees to experiment with cutting-edge GenAI-powered applications and solutions.
  • Using Azure OpenAI, HCLTech launched HCLTech AI Force, a GenAI platform that guides software development and engineering services. Platform users will also benefit from increased insights on operations and higher productivity. HCLTech also included security services within the platform to ensure compliance and provide governance measures around AI use and application and software development.
  • In 1Q24 Infosys launched the Responsible AI suite, which includes accelerators across three main areas: Scan (identifying AI risk), Shield (building technical guardrails) and Steer (providing AI governance consulting). These capabilities will help Infosys strengthen ecosystem trust via the Responsible AI Coalition. Infosys also claimed it was the first IT services company globally to achieve the ISO 42001:2023 certification for ethical and responsible use of AI.


With the increased attention and demand around AI to improve productivity and efficiency and lower overall expenses, nearly all IT services companies are aiming to expand their AI platforms and associated capabilities. For example, TCS prioritizes building its relevance to customers through employee hiring and training in critical technologies like hyperscaler platforms and GenAI. Facilitating the use of AI could be the key to these India-centric IT services companies finally growing their consulting capabilities.


Wipro indicated that Capco, which brought in technology and digital consulting services following its acquisition in 2021, was a bright spot during 1Q24. While client budgets are more limited, restricting consulting opportunities, pairing consulting expertise with deep technology knowledge does provide benefits for clients, particularly with increased access to C-Suite buyers.

Alliance Strategies

Partnerships provide opportunities for the five major India-centric IT services companies to drive new projects among clients, execute on reskilling and training initiatives, and strengthen their technology positioning. Recent partnerships also enable these vendors to guide portfolio and capabilities expansion to provide a wider range of offerings at an industry level.


Hyperscalers provide the India-centric vendors with additional scale and improve their ability to work alongside clients’ cloud and IT transformations regardless of maturity. HCLTech evolves its partner ecosystem to support its portfolio innovation and bring to market solutions that align closely with its clients’ business model transformation. TCS prioritizes partner-dedicated business units to capture the recent surge in client cloud adoption. These units leverage certified talent, centers of excellence, migration factories and innovation garages. HCLTech looks to complement its partner-dedicated business units with additional training through Google Cloud as well as expanded industry-specialized services.
Cognizant also deepened its partnerships with Microsoft and Google Cloud; it will increase the adoption of Microsoft Copilot using Cognizant’s advisory services, in addition to training over 70,000 of Cognizant’s employees on Google Cloud’s AI platform, Gemini, to build software development skills. Gemini will aid in training around AI offerings, including Google Cloud technologies as well as coding services. Through the partnerships, Cognizant will look to integrate AI technologies across its business transformation projects.


Partner-driven training efforts were focused on hyperscaler technologies and new skills development. For example, Infosys and the Financial Times furthered their partnership, which is focused on training and educating youth in India, by leveraging the Financial Times’ curated content capabilities delivered through the Infosys Springboard platform. The training-led partnerships strengthen the talent pipeline by helping both students and the vendors’ employees develop technology skills. Vendors will continue to leverage partnerships to develop additional skills among their talent bases and support their AI, digital and security positioning.


The five major India-centric IT services companies continue to experience pressured revenue performance due to market conditions, compelling them to strengthen their portfolios and talent. Evolving partnerships and expanding partner ecosystems to deepen capabilities and skills that address industry-specialized needs enable the vendors to maintain client relationships.


As clients look to execute on projects and apply technology to strengthen operations, these IT services companies must work closely with technology partners to quicken project timelines. Every client TBR talks to brings up speed-to-value as a critical KPI.


While revenues are not expected to greatly accelerate during 2024, the partnerships and portfolio development will help the India-centric companies be more resilient to market changes and increase value-driven engagements.