U.S. Analyst and Advisor Meet 2025, New York City, March 4, 2025 — Infosys hosted industry analysts and advisors for a packed afternoon in the company’s offices at One World Trade Center. Using client stories amplified through technology partner support to reinforce Infosys’ role in the IT services, cloud and enterprise AI market, company executives consistently returned to a few main themes, including delivering business outcomes, maintaining trusted relationships, and focusing on speed, agility and simplification.  

 

Infosys’ hub-first strategy in the Americas demonstrates the company’s success with coinnovation and pursuit of large deals

Similar to previous events, Infosys kicked off the event with an update on the company’s strategy and performance in the Americas region. Anant Adya, Infosys EVP and head of Americas Delivery, led the presentation, highlighting key elements of the company’s success in the region, including its hub-first strategy; investments in and expansion of local talent pools, including in the U.S., Canada, Mexico, Brazil and the rest of LATAM; and strategic bets that are centered on delivering business outcomes and enabled through portfolio offerings such as Infosys Cobalt, Infosys Topaz and Infosys Aster..
Infosys’ six Tech Hubs across the U.S. remain the backbone of the company’s hub-first strategy. Located in Phoenix; Richardson, Texas; Raleigh, N.C.; Indianapolis; Providence, R.I.; and Hartford, Conn., and collectively staffed with thousands of local hires, these centers are increasingly allowing Infosys to drive coinnovation with clients and partners and pursue new opportunities with a key focus on large deals (defined by Infosys as deals over $50 million in value) in areas including cloud, AI, data, the edge and cybersecurity. Infosys has been rebalancing its onshore-offshore effort over the last five years.
 
For example, onshore effort was 24% in 4Q24, down from 27.7% in 4Q19. Offshore effort was 76% and 72.3% in 4Q24 and 4Q19, respectively. The recalibration began during the pandemic, as Infosys began capitalizing on the increase in remote working. The current ratio is also helping the company demonstrate pricing agility when competing for service delivery transformation projects. At the same time, maintaining a steady flow of local hires could help Infosys weather any pushback from the Trump administration on its America First Investment Policy requirements. Although the administration has yet to impose tariffs on companies utilizing services from overseas, it would not be surprising for this to happen in the future. Investing in training programs and collaborating with local universities through the Infosys Foundation would not only create a strong PR framework but also help Infosys increase its recruiting opportunities. Meanwhile, expanding across Canada and key LATAM countries, including Mexico and Brazil, to support both nearshore and locally sourced deals allows Infosys to diversify its revenue stream while enhancing the value of its brand beyond the U.S.
 
As Infosys continues to execute on its well-oiled strategy, investing and expanding in the next growth areas across the company’s cloud and enterprise AI portfolio will largely be centered on calibrating its commercial model as client discussions evolve from transactions to outcomes. For example, to support these expansion efforts, Infosys’ work within the Infosys Cobalt portfolio has evolved from tech optimization and data center migration to developing and applying industry solutions, and now includes accounting for the role of AI.
 
Building out a fluid enterprise to derive greater value from AI has compelled Infosys to develop solutions with an eye toward being more digital, more composable and more autonomous. This solution framing is also helping the company drive next-gen conversations with its technology partners and with clients that are seeking to develop an intelligent enterprise enabled by AI.

Infosys’ pivot toward Outcome as a Service will test the company’s ability to drive change management at scale, starting with its own operations

Expanding on Infosys’ evolving go-to-market strategy, portfolio, talent and collaboration with partners, Infosys Chief Delivery Officer Dinesh Rao, along with a series of client and partner panels throughout the afternoon, not only brought to light the company’s aspirations around driving outcome services opportunities but also discussed at length the challenges stakeholders face, often revolving around change management. Rao’s presentations spanned client use cases, AI evolution, and Infosys’ portfolio adjustment as well as resource pyramid calibration to balance support opportunities in foundational and emerging areas. Three key areas stood out:

• Client examples: Amplifying value through innovation has helped Infosys capture and deliver services for global clients across manufacturing, retail and consumer packaged goods (CPG), among other verticals, while also positioning the company to test new commercial models. For example, in a multiyear, multibillion-dollar deal supporting a multinational communications provider, Infosys is deploying its Outcome as Service commercial framework, bundling software, hardware and third-party services on a single platform.
• AI: Infosys launched NVIDIA-enabled small language models (SLMs) for Infosys Topaz BankingSLM and Infosys Topaz ITOpsSLM, targeting clients through core industry and horizontal offerings and allowing them to use their own data on top of the prebuilt SLMs. Additionally, Infosys released the Finacle Data and AI Suite of solutions to support banking clients seeking to enhance IT systems and customer experience using AI. The solutions include Finacle Data Platform, Finacle AI Platform and Finacle Generative AI. Infosys’ investments in industry-centric SLMs, which the company positions with clients as either accelerators or platforms to drive targeted conversations using industry and/or functional enterprise data, closely align with the company’s playbook from a few years ago, when it began developing industry cloud solutions, both proprietary and partner enabled. Embedding generative AI (GenAI) as part of a deal, rather than using it as a lead-in, is a smart strategy as it allows Infosys to better appeal to price-conscious clients and steer conversations toward outcomes and the benefits of the engagement, rather than trying to convince clients to spend a premium on a technology that has yet to prove ROI at scale. We believe Infosys’ investment in agentic AI capabilities for Infosys Topaz, along with the ITOpsSLM, can also position the company to drive nonlinear, profitable engagements, especially with clients that are seeking to migrate and modernize their existing mainframe infrastructure but lack the necessary COBOL skills and understanding of the environment.
• Resource pyramid: Infosys’ three talent categories — traditional software engineers, digital specialists focused on digital transformation and ongoing support, and Power Programmers — allow the company to balance innovation and growth while calibrating its business and commercial models. The Power Programmers group consists of highly skilled professionals who are responsible for developing products and ensuring that the intellectual property they create and use meets the cost-saving requirements Infosys pitches to clients. Although the other two groups follow a traditional employee pyramid structure, the Power Programmers group is much leaner and resembles the business models that many vendors, including Infosys, may aspire to adopt in the future.

Rao also discussed Infosys’ approach to innovation. The company’s business incubator framework, backed by Infosys’ $500 million innovation fund and enabled through its network of Living Labs, has empowered the company’s employees to think creatively, thus helping Infosys solidify its culture of learning and collaboration. Gaining employee buy-in is a must, especially at a time when the company is pivoting its own operations toward outcome-based service delivery.

AI- and partner-led discussions will continue to guide Infosys’ efforts to solidify its position as a trusted solution broker

Sunil Senan, Infosys’ global head of Data and AI, provided an update on Infosys’ AI-first strategy and portfolio, which have allowed Infosys to stay competitive in a rapidly evolving AI market. Senan noted that the opportunities around agentic AI require a rigorous data and governance strategy — an acknowledgment that is not surprising given the company’s typically humble yet pragmatic approach to emerging growth opportunities.
 
Scaling AI adoption comes with implications and responsibilities, which Infosys is trying to address one use case at a time. For example, in October 2023 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 the ethical and responsible use of AI. Infosys recognizes that AI adoption will come in waves. The first wave, which started in November 2022 and continued for the next 18 to 24 months, was dominated by pilot projects focused on productivity and software development. In the current second wave, clients are starting to pivot conversations toward improving IT operations, business processes, marketing and sales.
 
The real business value will come from the third wave, which will focus on improving processes and experiences and capitalizing on opportunities around design and implementation. Infosys believes the third wave will start in the next six to 12 months. Although this time frame might suit cloud- and data-mature clients, only a small percentage of the enterprise is AI ready across all components including data, governance, strategy, technology and talent. Thus, it might take a bit longer for AI adoption to scale.
 
But as Infosys continues to execute its pragmatic strategy, the company relies on customer success stories that will help it build momentum. And there was no shortage of examples throughout the afternoon, with Infosys clients across the spectrum — from just getting started to scaling hundreds of AI deployments — sharing their experiences with Infosys and within the broader ecosystem.
 
We believe as Infosys pivots toward an Outcome as a Service commercial model, opportunities to scale AI will stem from the company’s ability to demonstrate value. In a traditional transformation project, the company often deployed professionals to perform typical implementation work and then transferred them to another project; during an AI project, staff would need to stay at a client’s site for a longer period to ensure the technology delivers the value promised. Approaching AI opportunities with a similar focus will help Infosys justify its rates but also help the company calibrate its staffing pyramid.
 
Infosys’ long-term success also depends on the company’s relationship with technology partners. During previous iterations of the summit, Infosys has had separate alliance-led presentations, but this time around the company included the partner presentations, specifically SAP, in a client panel. SAP’s presentation discussed a successful, three-year SAP S/4HANA migration for a global manufacturing client. Although the three-year turnaround was impressive, what stood out was how much the SAP executive was part of the conversation with the client. Speaking with the client on behalf of Infosys demonstrated trust and the depth of the relationship between SAP and Infosys.
 
Throughout TBR’s Ecosystem Intelligence research, we have written extensively that partners speaking on behalf of partners is often the last mile and the biggest challenge for vendors to overcome when they try to differentiate. We understand that vendors, especially IT services vendors, try to maintain tech agnosticism during consulting workshops, but when it comes to the implementation part of the engagement, developing more exclusive messaging resonates with clients much better as it shows knowledge, accountability and trust between parties.

Product Engineering and Quality Engineering present a tale of two cities that can help Infosys deliver value with minimal disruption to its financial profile

As Infosys continues to balance foundational growth with pursuing opportunities in new areas, the company’s evolving portfolio allows it to deliver steady financial results. Executives from Infosys’ Engineering Services and Quality Engineering lines of business, along with clients, highlighted how these two areas are helping Infosys achieve just that. Ben Ko, CEO of Kaleidoscope, a company Infosys acquired in 2020, explained how his company and its portfolio of solutions and products allow Infosys to capture manufacturing and R&D budgets, a slice of the overall enterprise spend that was somewhat untapped prior to expanding in the product engineering space. Infosys Engineering Services remains among the fastest-growing units within the company as Infosys strives to get closer to product development and minimize GenAI-related disruption on its content distribution and support position..
 
Since the 2020 purchase of Kaleidoscope, which provided a much-needed boost for the company to infuse new skills and the IP needed to appeal to the OT buyer, Infosys has enhanced its value proposition to meet GenAI-infused demand. For example, Infosys has purchased India-based, 900-person semiconductor design services vendor InSemi, and Germany-headquartered engineering R&D services firm in-tech, which presents a use case where the company applied a measured risk approach to enhance its chip-to-cloud strategy.
 
The purchase of in-tech certainly accelerates these opportunities, bringing in strong relationships with OEM providers, which is a necessary stepping stone as Infosys tries to bridge IT and OT relationships.
 
Meanwhile, Venky Iyengar, Infosys VP and head of Quality Engineering, along with clients, discussed how the Infosys business is adjusting both its value proposition and staffing models to account for automation and AI and to continue to deliver value to clients with minimal disruption to Infosys’ financial profile.
 
While a degree of revenue cannibalization is inevitable in the long run, Infosys’ approach toward platform-enabled quality engineering services, along with its efforts to fold these offerings under broader transformation projects, will allow the company to pivot and develop its position as a solutions broker.

It is all about the margins, and Infosys has the right ingredients to keep shareholders happy

Infosys, like many of its peers, faces a new reality influenced heavily by AI and reshuffling in buyers’ IT spending priorities. With IT becoming a utility, we expect enterprises not to cut back on spending but rather to demand from third-party vendors such as Infosys to deliver more with less. AI- and automation-enabled service delivery presents Infosys with the right tool to execute on such expectations. And as long as Infosys allows buyers to see that the productivity improvements have driven greater volume, then Infosys will be able to maintain its operating margin. Otherwise, buyers might start pushing back and asking for savings on their contracts when Infosys pitches new work but uses fewer employees. It was evident from the sessions that Infosys, with its enterprise AI capabilities, is strongly positioned to help clients unlock business value and drive growth. This aligns with the broader industry trend of leveraging AI to meet evolving client demands.
 
We understand that Outcome as a Service is a long-term play that will test Infosys’ culture and ability to manage trust within the ecosystem. The last five years of steady financial performance and the expansion of Infosys’ large and mega deals roster have provided the company with a strong foundation to make that pivot. Many of Infosys’ alliance partners, both technology and services ones, that TBR has spoken with view Infosys as a top delivery partner, thus providing the ecosystem support needed for the company to navigate the evolving IT services market.
 
TBR will continue to cover Infosys within the IT services, ecosystems, cloud and digital transformation spaces, including publishing quarterly reports with assessments of Infosys’ financial model, go-to-market, and alliances and acquisitions strategies.
 
For a comparison with Infosys’ peers and other IT services vendors, TBR includes Infosys in our quarterly IT Services Vendor Benchmark, our semiannual Global Delivery Benchmark and Cloud Ecosystem Report, and our annual Adobe and Salesforce Ecosystem Report; SAP, Oracle and Workday Ecosystem Report; and upcoming ServiceNow Ecosystem Report. Access the data and analysis in each of these reports with a TBR Insight Center™ free trial. Sign up today!

Expanding through partnerships

The India-centric vendors, which include Cognizant, HCLTech, Infosys, Tata Consultancy Services (TCS) and Wipro, leverage partnerships to expand their technology capabilities and scale while also bringing in industry knowledge to strengthen the value of their portfolios. Although these partnerships do not vary significantly from those of other IT services vendors, the India-centric vendors each bring different benefits, such as price competitiveness and low cost of scale, that can enhance other vendors’ go-to-market strategies and ability to reach underpenetrated markets while also bringing in portfolio expertise.
 
Understanding how similar companies bring different capabilities and strengths to their technology alliance partners highlights opportunities for other ecosystem players, such as smaller software companies, OEMs and niche consultancies, that are looking to expand with the India-centric vendors.
 

Cognizant

Cognizant forges partnerships with industry-oriented vendors and expands its security and digital capabilities. During 4Q24 and early 2025, Cognizant looked to relationships with key partners such as Salesforce and ServiceNow to enhance the company’s positioning around transformation and software development as well as create opportunities around migration and managed services.
 
As transformation projects increasingly center on AI, developing a suite of offerings that streamline the use of data and analytics, security and managed services helps Cognizant strengthen client relationships and drive new projects. Working with security vendors to deepen its security capabilities and protect digital environments will lead to additional services engagements for Cognizant. Further, partnering around industry expertise is enabling Cognizant to improve its performance in certain verticals, such as recently landing modernization and digitization projects with life sciences clients.
 
Cognizant manages an ecosystem to drive innovation both internally as well as with clients to drive value across industries. In April 2023 Cognizant launched Bluebolt, an innovation program that seeks to develop new ways to address clients’ business challenges. Since the launch, more than 115,000 ideas have been developed, of which 22,000 have been implemented, increasing client engagement. Additionally, Cognizant worked with Microsoft to create the Innovative Assistant, a tool that supports idea generation for Microsoft employees. The tool is something that Cognizant could replicate with other partners.
 
In 2014 Cognizant acquired TriZetto, a healthcare IT software and solutions provider, which added healthcare clients and specialized employees and offerings, creating new opportunities for Cognizant across the healthcare space. Cognizant continues to invest in the platform, offering back- and front-office solutions for payers, providers and patients, as well as care management and connected solutions to transform the patient and physician experience. The acquisition and Cognizant’s continued investments in healthcare offerings resulted in the vertical overtaking financial services as the company’s top revenue generator in 2024.
 
Cognizant’s active acquisition pace brings in a variety of new skills and capabilities to supplement existing areas and enable the company to expand transformation contracts with clients. For example, Cognizant acquired ServiceNow partner Thirdera in December 2023, strengthening its consulting and implementation services. Through the acquisitions, Cognizant has quickly developed its engineering, software and advisory services, enhancing its positioning with clients.

HCLTech

HCLTech’s partner network encompasses technology vendors, industry experts, and research and learning institutions, allowing the company to develop a wider set of in-house expertise and offerings. Adding new hyperscaler partners to expand its capabilities and scale enables HCLTech to deliver a wider range of AI offerings and guide technology services clients’ efficiency-related and insight-driven transformation projects. Further, integrating industry expertise within its technology portfolio improves HCLTech’s ability to address clients’ specific transformation needs.
 
Pursuing solution codevelopment partnerships helps HCLTech leverage internal expertise alongside that of its partners to align its portfolio with emerging pain points resulting from heightened AI, cloud and digital usage. HCLTech will strengthen its relationships with key partners such as Microsoft, Google Cloud, Amazon Web Services (AWS) and IBM to enhance its positioning around AI. In addition, HCLTech will enhance its industry positioning through partners and acquisitions to better tailor its offerings and deepen relationships in the telecom, financial services and manufacturing industries.
 
HCLTech’s ongoing investments in engineering capabilities have deepened the vendor’s expertise, allowing it to offer semiconductor design, manufacturing and validation services. Through acquisitions, HCLTech has added new experience and solutions and strengthened its manufacturing relationships. The integration of Engineering and R&D Services (ERS) sales and go-to-market motions with IT and business services sales will help HCLTech extend the reach of its portfolio, generating new segment opportunities and expanding the company’s reach outside its more mature areas such as manufacturing and automotive.
 
HCLTech leads with its Relationship Beyond the Contract (RBTC) approach, which allows the company to deepen client relationships, better address challenges, and future-proof organizations for disruption and threats. With the heightened demand and interest around generative AI (GenAI), HCLTech’s development of applications, infrastructure, semiconductor offerings and business process solutions underpinned by its GenAI Labs enables the company to secure its relationships.

Infosys

Infosys’ alliance partner strategy mirrors that of many of its competitors as the company seeks to secure foundational revenue opportunities while pursuing innovation through a measured risk approach. The company strives to differentiate by sticking to its strengths rather than branching too far into partners’ territory, which enterprise buyers strongly appreciate. Recent partnerships centered on GenAI also provide a glimpse into Infosys’ efforts to establish a beachhead in the emerging market as the company navigates choppy market demand and increases its efforts to expand margins.
 
Infosys’ three talent categories — traditional software engineers; digital specialists focused on digital transformation (DT) and ongoing support; and power programmers — allow the company to balance innovation and growth as it calibrates its business and commercial models. To support these categories, Infosys executes on aggressive hiring, particularly for 2025. In January Infosys announced it was planning to expand its Hyderabad, India, operations, adding 17,000 people for a total of 50,000 employees in the region. Although no time frame was outlined for this increase, during the company’s 4Q24 earnings call Infosys’ executives shared the company is planning to hire 20,000 freshers in FY26, up from 15,000 in FY25.
 
Infosys’ broad-based GenAI investments centered on the development of industry-aligned solutions and small language models, largely enabled through collaborations with NVIDIA, Microsoft and Meta, enhance the company’s value proposition when competing for custom model development engagements. In addition to driving opportunities within the telco vertical, we believe Infosys’ collaboration with NVIDIA will also help the company enhance the recently launched Infosys Aster — a set of AI-driven marketing services, solutions and platforms — as Infosys looks to develop a comprehensive strategy for its digital marketing offerings. Supporting clients seeking to enhance contact center operations through the use of AI and GenAI could backfire if technology and business priorities are misaligned, as chatbots have been around for a long time but have had only minimal positive impact on customer services.
 

Watch on demand: $130+ Billion Emerging India Opportunity – India-centric vs. Global IT Services Firms: Who Wins and Why

TCS

TCS has dedicated business units for its three largest technology partners, fostering deep expertise and enabling the development of specialized solutions. These units leverage a comprehensive approach, including certified talent, Centers of Excellence, migration factories and innovation garages, to deliver superior cloud services. This approach allows TCS to effectively guide clients through their cloud migrations, codevelop industry-specific solutions and ultimately drive successful cloud transformations.
 
Beyond its core cloud partnerships, TCS actively cultivates a diverse ecosystem of technology alliances. These partnerships extend beyond the traditional cloud providers, enabling TCS to enhance its own offerings, strengthen partner capabilities and collectively expand market reach. This collaborative approach fosters mutual growth and enables TCS to deliver more comprehensive and innovative solutions to clients.
 
TCS emphasizes its deep expertise in enterprise application deployment and management, combined with its scale and cost-effective resources, to position as a valuable partner within the technology ecosystem. The company is actively investing in talent development and AI-driven solutions to meet surging client demand around GenAI. By leveraging strong industry relationships and strategic partnerships with leading technology providers, TCS delivers a comprehensive range of digital services such as AI. Collaboration helps TCS enhance its value proposition for clients.
 
TCS stands out among its India-based peers due to its impressive scale, cost-effective labor force, well-balanced portfolio, robust automation framework, in-depth understanding of legacy IT systems and vast expertise in DT. The company’s scale allows it to work across a wider range of client needs and challenges that can be addressed through its DT and application portfolio. Despite TCS’ larger scale relative to peers, the company maintains roughly 75% of its headcount in offshore locations.

Wipro

Wipro continues to expand its partner ecosystem, including incorporating security and enablement services, to ensure the company can provide a wider range of technology solutions. For example, during 4Q24, Wipro partnered with multiple vendors to grow its security services offerings. Working with Netskope and Lineaje helps address risk and vulnerabilities across the technology landscape to drive additional value and strengthen client relationships.
 
In addition to technology development, Wipro looks to deepen its industry expertise through partners, advancing its healthcare and financial services portfolio. Through 2025, Wipro will grow its partner ecosystem to include additional technology capabilities and security services to guide clients’ modernization and efficiency transformations while also maintaining a portfolio that rivals those of its peers.
 
Relative to its India-centric peers, Wipro finds itself in a more precarious position with slower revenue growth and a smaller profit. During 2024 Wipro IT Services (ITS) was able to increase its operating profit, owing to improved internal management, the use of AI and automation tools, as well as a streamlined talent structure. Wipro ITS’ revenue generation slowed in 2023 and 2024, resulting in a year-to-year decline in 2024 in both local currency and U.S. dollars due to ongoing execution challenges in APMEA and Europe and limited interactions with clients. Capco, a financial services consulting firm Wipro acquired in 2021, remains a bright spot for Wipro, as it added a new approach to industry clients in Europe.

Conclusion

Each of the India-centric vendor brings its own strengths and weaknesses that can help enhance partners’ go-to-market strategies and deliver on emerging technologies. The composition of talent varies across the vendors, with some benefiting from technical expertise such as engineering whereas others have a greater bench of consulting and delivery staff. As AI permeates client engagements, developing a larger partner ecosystem that encompasses multiple different business models, talent and portfolio strengths as well as offshore delivery leverage will enable IT services vendors to compete more effectively for limited client spend.
 
Further, internal innovation with partners, including around AI tools that are tested internally before coming to market strengthens portfolio value and trust with clients. Partnering outside of typical partner parameters will bring in much-needed innovation, refreshed talent as well as enhanced delivery resources to secure client trust and engagement.
 
TBR’s ongoing research and company coverage includes regular analysis of alliances between the leading global systems integrators, including the companies outlined in this report. In addition, we publish the Cloud Ecosystem Report semiannually and the Adobe & Salesforce Ecosystem Report, the SAP, Oracle and Workday Ecosystem Report, the U.S. Federal Cloud Ecosystem Report and the Voice of the Partner Ecosystem Report annually. Access the data and analysis in each of these reports with a TBR Insight Center™ free trial. Sign up today!

Informatica uses the ‘power of three solutions’ to bolster its ecosystem

An increasing amount of research and analysis time at TBR is focused on ecosystem intelligence, which applies a set of questions and frameworks to extend traditional market intelligence and competitive intelligence approaches in an effort to better understand a market. Recently, TBR analysts spoke with Informatica’s Richard Ganley, Senior Vice President, Global Partners, and his insights into the actions the company is taking to enhance its alliance relationships with nine key partners (Figure 1) stood out to the team. We believe Informatica is doing the following things really well:
 

• Enthusiastically embracing the “power of three solutions,” that is, solutions pulling together resources from a global systems integrator (GSI), a cloud or software vendor, and Informatica. According to Ganley, this approach helps enterprise IT clients “modernize faster … [and] master some of their most critical data with multivendor solutions.”
• Consistently evaluating GSIs based on their performance with Informatica, including growth, new solutions and mindshare
• Ensuring the company as a whole understands the evolving importance of the ecosystem to Informatica’s success

Informatica’s relationship with GSIs

Ganley cited four reasons why GSIs want closer relationships with Informatica. First, Informatica has a mature data platform, the Intelligence Data Management Cloud (IDMC). According to Ganley, one part of the platform’s appeal is its simplicity: GSIs “don’t need to work with small vendors who we compete with and pick three or four of them and stitch together their technologies to try and make a platform. They can just work with us and everything is there.”
 
Second, simply scale. Although Ganley did not say it explicitly, every GSI that TBR covers has been working to consistently (and profitably) bridge the gap between AI pilots and limited AI deployments to AI at scale. Informatica’s established scale brings GSI partners reassurance. As Ganley put it, GSIs “can see eventually how they can build a billion-dollar practice with Informatica.”
 
Third, Informatica partners with the GSI’s partners, including what Ganley described as “very close engineering relationships with the hyperscalers.” Fourth, Ganley described a “huge uptick” in GSI partners’ professionals being trained and certified on Informatica’s solutions, increasing from around 8,000 per year in 2020 to more than 15,000 in 2024. Ganley noted, “one of the reasons we’re seeing so many of our partners wanting to double down with us [is] because they see us as very important foundational work for AI to be possible.”
 
Ganley also highlighted Informatica’s relationship with LTI Mindtree, specifically within the context of how Informatica evaluates (and invests people and resources in) GSI partners. Of the nine strategic GSIs listed in Figure 1, LTI Mindtree is unquestionably the smallest in terms of revenue, and Ganley noted that LTI and Mindtree, as separate companies, were very appealing as strategic partners. After the merger was completed and LTI Mindtree recruited experienced talent known to Informatica, the two companies reconsidered a strategic partnership. Informatica laid out specific criteria, and LTI Mindtree invested in training and other aspects of the alliance. The CEOs of both companies formally announced the new alliance.
 
The result has been, according to Ganley, highly successful for both parties: “They’ve been absolutely amazing to work with … and their data and AI practice is quite a good size. They’ve got 12,000 people in the practice, and I think that’s more than 10% of their business. So it’s pretty meaningful for them.” In TBR’s view, this deliberate, strategic approach to alliances has been the exception, not the rule, across the IT services, cloud and software ecosystem. Having an explicit set of criteria for continually evaluating a partnership — beyond simply revenue or sales opportunities — is a critical component, as is CEO-to-CEO buy-in. Informatica clearly has this figured out.

Informatica’s ‘power of three’ approach integrates technology in a unique way

Throughout our coverage of Informatica, we regularly discuss the company’s partner-first approach, and why Informatica continues to position itself as “the Switzerland of data.” Take Informatica’s seven core tech alliance partners: Microsoft, Amazon Web Services (AWS), Oracle, Google Cloud, Databricks, Snowflake and MongoDB. We cannot identify any company in that list that has a tailored go-to-market approach with all the other six vendors; even if you take the hyperscalers out of the equation, there is simply too much overlap in their capabilities.
 
Of the vendors TBR covers, Informatica is the only PaaS ISV that has worked across a broad cloud ecosystem in a way that gets the company natively embedded in critical layers of the data stack (i.e., Microsoft Fabric), thus making it easier for customers to adopt more components of IDMC. So, it is not surprising that GSI partners are excited about working with Informatica and unlocking growth via the cross-alliance structure.
 
The seven core tech alliance partners listed above, as well as other SaaS vendors like SAP and Salesforce, are becoming more integrated with each other by improving data sharing, opening up their APIs and making a comprehensive shift toward more open architectures. Although competitive obstacles will continue to exist, this trend could generate many opportunities for Informatica given its already established role with many of these tech partners. SAP’s new partnership with Databricks — in which Databricks will be sold as a native SAP service — offers a great model for Informatica, particularly if it wants to capture more engagements around SAP modernization, which the GSIs will help support.

SAP

SAP is not an Informatica technology partner, but naturally, ingesting, managing and integrating SAP data remains an important use case. We have spoken to enterprise customers that leverage Informatica’s data ingestion capabilities to extract data from SAP systems and make it available in a data lake from Informatica partners such as Databricks, as part of the ERP modernization process. For many ISVs, developing a partnership with SAP can be difficult, but Informatica’s work with the biggest GSIs — including Accenture, Deloitte and Capgemini, which according to TBR’s SAP, Oracle and Workday Ecosystem Report collectively employ more than 144,000 people trained on SAP offerings — will play a huge role in getting Informatica in front of SAP and the related ERP modernization opportunities.
 
In describing Informatica’s strategies around “power of three solutions,” Ganley noted that the most frequent teaming approach would include a person from the GSI, a person from that GSI’s technology team (for example, a Deloitte SAP practice professional), and a person from Informatica.
 
In TBR’s view, this approach solidifies Informatica’s relationship with the GSI while helping the GSI solidify its relationship with the cloud or software vendor. As multiparty go-to-market approaches and solutions become more common across the ecosystem, TBR will be watching to see who staffs those teams, which vendor leads, and whether Informatica’s approach is emulated by others.

The value of the ecosystem can be measured: 17%, 47% and 83%

Admittedly, not every player or every professional in the technology space is sold on how ecosystems are changing and how valuable alliances are to long-term growth. Ganley provided perhaps the starkest evidence why ecosystems matter with a few simple numbers: “We looked at basically all the opportunities that we’d had in our system, which we’d either won or we’d lost over the past two years. And we found if we didn’t work with a partner, our win rate was around 17%.
 
If we worked with one partner, it went up to 47%, which kind of makes sense because we’ve got somebody in there speaking up for us, recommending us. But if we worked with two partners, and by two we mean one from the GSI and one from the ecosystem … the win rate goes up to 83%.” 17%, 47%, 83%. TBR has not seen a more compelling case for alliance management and ecosystem intelligence.
 
According to TBR’s Summer 2024 Voice of the Partner Ecosystem Report, data management ranked among the top three growth areas for services vendors in the next two years, sending a signal to the ecosystem that they will continue to invest in resources and guide conversations with mature enterprise buyers that are further along with their digital transformation programs and can embark on the next phase: setting up a strong foundation for generative AI.  Informatica’s portfolio and alliance strategy is well aligned with the emphasis on data management, which is helping it become an invaluable strategic partner for GSIs and reinforcing the company’s tagline “Everyone is ready for AI except your data.”
 
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After a four-year bull market featuring unprecedented spending growth in federal IT, DOGE is creating near-term challenges for FSIs

The newly inaugurated Trump administration and its Department of Government Efficiency (DOGE) have generated massive upheaval across the board in federal operations, including the federal IT segment. As of March 2025, thousands of contracts described by DOGE as “non-mission critical” have been canceled, including some across the federal IT and professional services landscape.
 
The initial contract terminations have fallen disproportionately on smaller-scale programs, many of which were held by small service-disabled veteran-owned vendors, though leading federal systems integrators (FSIs) have not been spared as some large-scale programs have also been canceled. For example, federal IT leader Leidos had a $1.5 billion award with the Social Security Administration (SSA) for systems operations and hardware engineering scaled back significantly in February 2025.
 
There is no question that the federal government must enhance efficiencies and use IT to enable more cost-effective operations, as DOGE promises. TBR estimates that federal agencies are collectively spending over $100 billion every year on systems that are often not interoperable and in desperate need of modernization. The initial weeks of the Trump administration and actions of the DOGE advisory board, however, have thrown the federal sector into chaos. Federal IT vendors are scrambling to adjust their strategies and tactics to align with the market, which is quickly shifting under their feet.
 
However, the lack of clarity from DOGE as to how it is evaluating and will continue to evaluate the merit of federal contracts is making effective strategic planning nearly impossible for federal technology contractors. In this special report, we summarize how the FSIs we track are reacting to the emerging DOGE-driven challenges and how well they are positioned to not only deflect near-term disruptions but also capture future opportunities.
 

Watch Now: GenAI in Federal IT Services in 2025, featuring TBR analysts John Caucis and James Wichert

 

Accenture Federal Services (AFS)

Strengths and Opportunities

AFS’ core competencies are well aligned with DOGE’s focus on driving efficiencies: broad-based investments in cloud, generative AI (GenAI), innovation and showcase facilities; tight management of their alliance ecosystem; and prudent acquisitions that have been quickly and effectively integrated. AFS has been using AI simulations over the last couple of years that incorporate economic modeling and statistical analysis of federal budgets to show federal leaders new ways to reimagine public resource allocation based on economic modeling and federal budget analysis.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

AFS is one of the 10 or so consulting-led FSIs that will be particularly under close scrutiny by the DOGE advisory board and the Trump administration and could consequently see several of its ongoing strategic engagements scaled back. AFS tends to leverage premium pricing as part of its consulting-led go-to-market approach. The vendor lacks the operational scale and multibillion-dollar engagements of its larger FSI peers, limiting its ability to absorb marketwide disruptions.
 

How will AFS respond to DOGE?

AFS will emphasize the security of its offerings and the vendor’s ability to generate efficiencies for federal agencies, doubling down on its 2024 go-to-market messaging that stressed cybersecurity as core to its digital transformation strategy. AFS will also emphasize its use of cloud, data and AI to drive enhanced efficiencies, and the company believes there will be an even greater appetite for adopting commercial solutions stemming from DOGE’s recommendations. We expect AFS to leverage its corporate parent more heavily than ever to gain access to expertise, case studies and best practices, and the latest digital technologies that have been refined in commercial environments.

Booz Allen Hamilton (BAH)

Strengths and Opportunities

BAH will draft off the unprecedented success of its three-year strategic growth initiative VoLT (Velocity, Leadership and Technology), which ran from the company’s FY23 through FY25 (ending March 31, 2025). The VoLT program generated three straight years of double-digit growth, including multiyear, 20%-plus growth in the lucrative federal health IT market. VoLT also delivered record profits and profit margins and robust cash flows (potentially $900 million-plus in free cash flow in FY25, up from $192 million in FY24 and $527 million in FY23) that can be plowed back into the business. BAH is also well diversified across the civil, Department of Defense (DOD) and Intelligence Community (IC) markets and has over a century of experience in the federal market. BAH sees DOGE as a shift in priorities, not an across-the-board cost takeout.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

Like AFS, BAH will be highly exposed to precipitous cuts in federal budget outlays for consulting services, but BAH’s exposure could be in the billions of dollars, the highest across the FSI landscape. BAH also tends to demand a premium for its advisory services and could face significant price-based competition from smaller advisory-focused peers offering similar but discounted consulting services more tightly aligned with DOGE’s core objectives.
 

How will BAH respond to DOGE?

BAH will tout its experience and successes enhancing efficiencies while crafting strategies for agencies to reinvest savings from DOGE-driven budget cuts, and the eventual implementation of the most cost-effective IT-based solutions, in next-generation technologies to support future missions. The vendor will focus on its versatility while building an even more opportunity-focused mindset in its workforce. BAH will adjust its messaging to emphasize its capabilities to deliver innovation at speed within outcome-based contracting arrangements. Stay tuned for BAH’s next three-year growth strategy, expected to be unveiled in the early months of the firm’s FY26, for more details on how DOGE will impact federal IT’s most venerable firm.

CACI

Strengths and Opportunities

CACI generates 75% of revenue from the DOD and IC, which could shield the company from contract cancellations or revenue contraction if DOGE’s focus is tilted toward the civilian sector. Civil-focused cuts could generate opportunities for CACI around its extensive suite of AI technologies that enable companies to automate more human-resource-intensive tasks and enhance financial management operations. CACI is already entrenched in DOD- and IC-based modernization efforts and can showcase its success in deploying AI technologies.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

While DOD contracts are protested less often than civil awards, that could change with future large-scale DOD contracts in a DOGE-based federal contracting environment. Roughly 60% of CACI’s order book is cost-plus work, which could continue to be the DOD’s preferred price structure for net-new technology, but it appears DOGE could drive a more fixed-price award structure (less than 30% of CACI’s contracts are structured as firm-fixed-price awards). CACI’s footprint in the civil space is limited, and the company could miss out on opportunities if DOGE turns to the civil segment for AI-enhanced automation solutions to replace furloughed government employees.
 

How will CACI respond to DOGE?

CACI immediately requested meetings with executive-level IT decision makers and contract managers at DOD and IC agencies, encouraging them to ensure optimum speed-to-decision with any DOGE-related actions. CACI does not foresee delays in contract adjudication in the near term; awards in the decision pipeline are now expected to be finalized by the fourth quarter of FFY2025 (federal fiscal year 2025).
 
From a solutions standpoint, CACI will promote its AI technologies as key to federal acquisition reform and its counter-UAS (unmanned aerial systems) technologies as critical to homeland defense. CACI will highlight successes on its BEAGLE (Border Enforcement Applications for Government Leading Edge IT) program with the Department of Homeland Security (DHS) Customs and Border Protection, and on NASA’s NCAPS (NASA Consolidated Applications and Platform Services) program in pursuit of new civil opportunities.

CGI Federal

Strengths and Opportunities

CGI Federal has been gaining strong traction with its core managed services platforms, Momentum (financial management) and Sunflower (asset management). These offerings not only have enabled the company to be a perennial margin leader in TBR’s Federal IT Services Benchmark but also are well aligned to DOGE’s cost takeout objectives with a track record to prove it. CGI Federal’s managed services offerings have also facilitated deep relationships with the Department of Justice (DOJ) and Treasury Department.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

CGI Federal generates roughly 90% of its revenue from the civilian sector and could be overexposed to DOGE-related budget reductions that disproportionately impact civilian agencies. The company has made key strategic acquisitions to bolster its advisory capabilities in recent years (e.g., Array in 4Q21, TeraThink in 1Q20, and Sunflower Systems in 3Q19), but its advisory capabilities lack the maturity, breadth and market reputation of similar services offered by consulting leaders like BAH and AFS. Conversely, CGI Federal could undercut its larger consulting-led peers by offering discounted advisory services that emphasize its core capabilities in enhancing agency fiscal and operations management.
 

How will CGI Federal respond to DOGE?

CGI Federal was one of the 10 consulting-focused FSIs mentioned in the Trump administration’s Feb. 27 memo demanding that agencies review consulting engagements and cut “non-essential consulting contracts.” The company’s reaction to DOGE has been limited compared to its peers, but we anticipate CGI Federal will tout its automation and AI capabilities, along with its flagship financial and asset management platforms, as having the exact capabilities civilian agencies will need to achieve IT-driven cost reductions.
 

 

General Dynamics Technologies (GDT)

Strengths and Opportunities

Demand for General Dynamics Information Technology’s (GDIT) digital accelerators (Comet 5G, Coral Software Factory, Cove AI Operations, Eclipse Defensive Cyber, Ember Digital Engineering, Everest Zero Trust, Hive Hybrid Multi-Cloud, Luna AI and Tidal Post-Quantum Cryptography) has continued to grow, generating nearly $7.5 billion in contract awards in 2024 compared to more than $2 billion in 2023.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

While the DOD is still GDT’s largest customer, GDIT’s recent expansion into the federal health market leaves it more vulnerable in the short term as the Trump administration looks to rapidly pull back on spending for agencies like the U.S. Department of Health and Human Services (HHS). Additionally, the General Services Administration (GSA) has indicated that GDIT’s consulting contracts will be closely reviewed going forward.
 

How will GDT respond to DOGE?

TBR anticipates that GDIT will invest further in its digital accelerator-centric strategy and increasingly collaborate with partners like ServiceNow. This will allow GDIT to expand its capabilities with emerging technologies and support DOGE’s effort to accelerate IT infrastructure modernization.

IBM Consulting

Strengths and Opportunities

IBM Consulting’s federal market group, IBM-Fed*, is two years removed from its strategic acquisition of Octo Consulting and won positions on a handful of large-scale programs with both civilian and defense agencies in 2024, suggesting the company is fully leveraging the added scale and portfolio depth it obtained from Octo.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

IBM-Fed, while not entirely a newcomer to the federal IT market, is the smallest of the FSIs tracked in TBR’s Federal IT Services Benchmark. While its smaller scale may limit its exposure to DOGE, the company has ongoing, strategic programs with USAID (United States Agency for International Development) ($95 million, five-year contract for cybersecurity services won in 2023) and U.S. Citizenship and Immigration Services (USCIS) ($279 million, five-year contract won in 2Q24) that are likely at risk.
 
The cancellation of these programs would severely impact IBM-Fed’s smaller revenue base relative to its FSI peers. The overarching goal of the Octo acquisition was to expand IBM-Fed’s advisory chops; DOGE could derail IBM-Fed’s still nascent efforts to gain ground in the federal IT market as a consulting-focused professional services competitor.
 

How will IBM Consulting respond to DOGE?

TBR expects IBM-Fed will double down on hybrid cloud and cybersecurity, capabilities at the heart of the company’s burgeoning federal IT growth effort, as DOGE continues upending the federal IT market. IBM-Fed can also leverage hybrid and multicloud capabilities obtained from the now-finalized acquisition of HashiCorp. IBM was one of the companies mentioned in the Trump administration’s Feb. 27 memo regarding federal consulting contracts and the federal government’s use of consultancies.
 
An IBM spokesperson responded in a Nextgov interview the same day the memo was released, saying, “Today, IBM supports the modernization and delivery of mission critical federal services and systems, from processing veteran health claims more quickly to enabling a more efficient digital taxpayer experience. We are … committed to helping agencies become more efficient and deliver better results for the American public.” IBM’s response was necessary, but still rather boilerplate in its tone and lack of detail. (*TBR refers to IBM Consulting’s federal IT operations as IBM-Fed. IBM-Fed is not an official business line title used by IBM or IBM Consulting. The business defined by TBR as IBM-Fed resides within IBM Consulting’s U.S. Public and Federal Market group.)

Leidos

Strengths and Opportunities

Leidos has the largest scale across federal IT, and the number of multiyear, multibillion-dollar engagements on its books is a testament to not only the company’s ability to deliver agencywide IT transformation but also its strong contract delivery on prior-year engagements. The vendor is well diversified across the federal IT market with large civil, defense and IC practices. Leidos is also diversified geographically, generating between 10% and 15% of its business from international markets, where the company is gaining traction. Its’ international operations could enable the company to withstand short-term turbulence in the federal IT market, at least in terms of its profit and loss statement.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

Dynetics, Leidos’ robust and differentiating R&D subsidiary, could be negatively impacted if the Trump administration deemphasizes R&D investments or if DOGE reduces R&D budgets. Leidos also has a large federal health IT business, which could be vulnerable if DOGE targets the health IT market for cost cuts after robust spending under the previous administration. Further, Leidos could face increased protests around its large strategic awards by unsuccessful competitors trying to undercut Leidos on price.
 

How will Leidos respond to DOGE?

Leidos executives stated during the company’s 4Q24 earnings call that they believe DOGE gives the company “increased confidence in our strategy,” but the details remain scarce. Those details are likely forthcoming, as Leidos will unveil North Star 2030, the company’s growth strategies for the next five years, this summer. We anticipate Leidos will emphasize guiding clients through the elimination of regulations, efforts to streamline procurement, and the shift to more outcome-based contracting.
 
Leidos will also increasingly emphasize its ability to accelerate ongoing digital transformation programs and tout its strong record of past performance (e.g., its ongoing, $11.5 billion Defense Enclave Services engagement). Leidos will also focus on developing innovative IT-enhanced military capabilities and will likely plow robust cash flows from FY24 into R&D to accelerate the development of market-ready solutions for next-generation warfighting in areas like hypersonics, unmanned systems and ISR (intelligence, surveillance and reconnaissance) systems.

ICF International

Strengths and Opportunities

After spending over $600 million on M&A to rapidly develop its digital modernization business from 2020 through 2022 (ICF’s digitalization business’ annual revenue more than quintupled over this time frame to reach $500 million), ICF started securing more high-profile federal IT contracts worth over $100 million in 2024 while letting low-margin engagements roll off its books.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

During ICF’s earnings call, executives warned that the company’s 2025 total revenue could contract by up to 10% compared to 2024. While ICF’s environmental work is particularly vulnerable, its digital modernization business will face disruptions. For example, ICF already was struggling with delays tied to lucrative contracts with USAID before the Trump administration placed the agency in its crosshairs. Additionally, a concentrated push to outcome-based contracting, along with a sharp reduction in agencies’ headcounts, could lead to demand pulling back for ICF’s low-code/no-code platforms.
 

How will ICF International respond to DOGE?

ICF may shift its focus from supporting the Energy, Environment, Infrastructure and Disaster Recovery client market back to developing its digital modernization business, including building upon its fraud detection capabilities.

Maximus

Strengths and Opportunities

Since acquiring Veterans Evaluation Services for $1.4 billion in 2Q21, Maximus has been capitalizing on the surge in opportunities created by the Honoring Our Promise to Address Comprehensive Toxics (PACT) Act while supporting the Department of Veterans Affairs (VA) on a plethora of medical disability examination (MDE) contracts. Business process outsourcing (BPO) remains at the core of Maximus’ go-to-market strategy as the company parlays these initial engagements where it provides more traditional services into more lucrative opportunities with clients like the IRS.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

Maximus has been deepening its relationship with the IRS over the years and in 2023 was named a prime contractor on the $2.6 billion Enterprise Development, Operations Services (EDOS) contract. With the IRS’s 90,000-person workforce expected to be reduced by up to 50% under the Trump administration, future funding could be disrupted and upend Maximus’ efforts to branch out. Similarly, Maximus’ exposure to the VA may become a weakness as the agency’s headcount is expected to be reduced by more than 15% (approximately 80,000 workers) as it comes under greater scrutiny by the Trump administration.
 

How will Maximus respond to DOGE?

While bipartisan support for the PACT Act should persist and provide Maximus’ federal business with steady income, the company will leverage its IT systems, network infrastructure and software development capabilities in the long term to increase clients’ efficiency.

ManTech

Strengths and Opportunities

Being a private company gives ManTech a competitive advantage compared to its FSI peers as consultancies race against the quarterly earnings clock during this chaotic period. With the financial backing of The Carlyle Group, ManTech is one of the best positioned vendors in TBR’s Federal IT Services Benchmark to make an acquisition. ManTech can take its time refining its digital consulting practice, aligning it with the Trump administration’s long-term priorities and scooping up displaced consultants from players like AFS while building upon the fundamentals of consulting: people and permission.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

ManTech has historically been a margin laggard compared to its peers in TBR’s Federal IT Services Benchmark, with the vendor last disclosing an operating margin of 5.2% in 2Q22. While ManTech’s restructuring efforts could bring its operating margin more in line with the competition over time, a prolonged return of the lowest price technically acceptable (LPTA) environment would cause significant harm as ManTech lacks the scale to consistently vie for must-win engagements against Tier 1 peers.
 

How will ManTech respond to DOGE?

TBR anticipates that ManTech will lean further into opportunities with its core defense and intelligence clients, given DOGE’s crackdown on non-mission-critical spending seems to be concentrated more in the federal civilian sphere. As DOGE hopes to accelerate the modernization of IT infrastructure and apply AI across the agencies, ManTech will continue to identify new ways to weave the emerging technology into their workflows.

Peraton

Strengths and Opportunities

The three-way megamerger with Perspecta and three Northrop Grumman business units expanded Peraton’s sales sevenfold from roughly $1.0 billion in 2020 to between $7.0 billion and $7.2 billion in 2021, according to TBR estimates. Peraton quickly fused these assets into one homogeneous entity and has been using its newfound scale to reliably compete against established leaders in the federal IT industry, such as GDT, across the civilian and defense markets.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

While Peraton has been further penetrating the federal civilian and health spaces by leveraging its newfound digital transformation, analytics and lifecycle management capabilities, the years of robust health IT budget growth are unlikely to continue under the Trump administration. Peraton is a prime contractor on the Social Security Administration’s IT Support Service Contract II vehicle, which DOGE recently targeted for cuts.
 

How will Peraton respond to DOGE?

Veritas Capital is no longer expected to take Peraton public as federal IT vendors’ valuations have cratered from their November 2024 highs. Under CEO Steve Schorer’s guidance, Peraton will accelerate its efforts to harness emerging technologies to better compete for enterprise IT awards in the $500 million to $2 billion range. As agencies appear to be increasingly open to adopting an “as a Service” model, Peraton will continue to position itself as a cloud services broker to win deals like the Cloud Hosting Solutions III contract and shore up its relationships with partners like SoftIron.

SAIC

Strengths and Opportunities

SAIC has scale, a growing suite of partner-enhanced cloud solutions, and a vendor-agnostic approach to migrating federal IT workloads to cloud environments that have enabled the company to improve its fiscal performance and land strategic engagements. The vendor also derives nearly three-quarters of its revenue from the DOD and IC, potentially sheltering the company from DOGE-related budget cuts in the civil space. SAIC is perhaps the foremost prime contractor with the U.S. Air Force (USAF) leading the service branch’s multiyear cloud migration initiatives.
 

Weaknesses, Risks and Areas Exposed to Market Turmoil

SAIC’s marquee engagements are with civilian agencies, including the seven-year, $1.3 billion T-Cloud program won in 1Q23 with the U.S. Department of the Treasury and the $8 billion blanket purchase agreement with the FBI won in 2Q24, potentially overexposing the company to DOGE-based efforts in the civil sector. The company is also in the middle of an operational and organizational restructuring effort that, while gaining traction, could be undermined by DOGE-related market disruption.
 
Recent unsuccessful contract renewals and business-line divestitures have generated lingering organic growth headwinds that have caused SAIC’s top-line growth to lag its peers’, and may limit the company’s ability to buffer the impact of DOGE-related contract reductions or terminations on its top line. SAIC’s margin performance is improving but also trails that of larger federal IT peers; DOGE may jeopardize the company’s continued profit elevation.
 

How will SAIC respond to DOGE?

SAIC will tout its integration expertise and ability to fuse cloud-based products, platforms and solutions from its partners and joint ventures together to create cloud environments for its customers that will generate DOGE-mandated savings. SAIC will repurpose its experience delivering cloud-enhanced, mission-critical solutions for the DOD to accelerate cloud-based growth in the civilian sector in 2025 and 2026, emphasizing cloud infrastructures as the optimal way for civil and defense agencies to drive down operating costs.
 
CEO Toni Townes-Whitley appeared on Bloomberg TV in early December, saying, “We think we are well positioned” and “Looking forward to that engagement” with DOGE and the Trump administration. She was the first CEO of the FSIs tracked by TBR to respond to the potential impact of the then-incoming Trump administration, smartly getting out in front of the emerging market disruption. Townes-Whitley also noted that SAIC will look at “where are the levers in an environment where technology will be the enabler of efficiencies,” but also said she expects SAIC will have to “adapt to an environment where spending is more circumspect.”
 
 
TBR’s Federal IT Services research team will provide additional company-specific analysis of the impact of DOGE and the Trump administration’s proposed budget actions on the FSIs in our upcoming blog series, DOGE Federal IT Vendor Impact, featuring reports and profiles of the contractors mentioned in this special report.
 
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