DOGE Federal IT Vendor Impact Series: ICF International

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The Trump administration and its Department of Government Efficiency (DOGE) have generated massive upheaval across the board in federal operations, including in the federal IT segment. As of May 2025, thousands of contracts described by DOGE as “non-mission critical” have been canceled, including some across the federal IT and professional services landscape. TBR’s DOGE Federal IT Vendor Impact Series explores vendor-specific DOGE-related developments and impacts on earnings performance. Click here to receive upcoming series blogs in your inbox as soon as they’ve published.

 

ICF struggles as uncertainties mount

While several vendors in TBR’s DOGE Federal IT Vendor Impact Series have managed to largely escape the Trump administration’s chainsaw, ICF International has not been as lucky. ICF’s revenue from the U.S. federal government plummeted 12.6% year-to-year and 7.0% sequentially, to $239.6 million, in 1Q25. Contract terminations and stop work orders have surged, upending around $115 million of ICF’s FY25 revenues as of May 1 and $375 million of its backlog. Solicitations and award activity also began to slow as DOGE started assessing contracts, causing ICF’s pipeline of opportunities also to contract from $11.2 billion in 4Q24 to $10.5 billion in 1Q25.

 

ICF was already struggling with unfavorable year-to-year comparisons as it was letting small business contracts that it inherited through its wave of digital modernization-focused M&A activity from 2020 to 2022 roll over while it faced delays on some programs for the U.S. Agency for International Development (USAID). The Trump administration has quickly dismantled USAID, a client that ICF holds multiple, lucrative engagements with, including a $236 million contract to facilitate the Demographic and Health Surveys initiative, within just a few months.

 

ICF’s programmatic business has been severely disrupted by the chaos at USAID and at other federal civilian agencies, with its consulting and engineering services work rapidly being scaled back. These types of engagements with the U.S. Department of Health and Human Services (HHS), which as ICF’s single largest customer in 2024 was responsible for 25% of the company’s $2.02 billion in revenue, are also under intense scrutiny. While ICF’s IT modernization work has not experienced any substantial disruptions thus far, solicitations and award activity have slowed down.

 

Being selective and pursuing optimal fixed-price contracts has helped ICF shed its margin laggard status in TBR’s Federal IT Services Benchmark over the last two years. While stop work orders and other impediments disrupt ICF’s economies of scale on federal engagements, the vendor has been able to mitigate some of the resulting impact on its operating margin by leveraging the demand for its highly lucrative commercial energy programs. For example, ICF’s operating margin of 7.9% in 1Q25 decreased 40 basis points on a year-to-year basis but increased 20 basis points sequentially.

How ICF will navigate 2025

ICF’s core federal client base is under unprecedented political pressure that will likely continue, given the Trump administration’s recent “skinny” budget proposal for federal fiscal year 2026 (FFY26). If enacted, non-defense spending will fall from around $720 billion in FFY25 to approximately $557 billion in FFY26, representing a 23% decline. This would result in five of ICF’s eight largest federal clients’ budgets being significantly reduced, upending the rapid expansion that the Biden administration nurtured over the last four years.

 

HHS’ discretionary spending would notably be slashed by more than 26% from $127 billion in FFY25 to $93.8 billion in FFY26 if this proposal is approved. This would negatively impact several health agencies, including the Centers for Disease Control and Prevention (CDC), which ICF has gained traction with after spending more than $600 million on M&A between 2020 and 2022 to penetrate the rapidly developing market. While several opportunities in the federal health market would be lost or meaningfully scaled back, the newly created “Make America Healthy Again” (MAHA) initiative could be a proving ground for ICF.

 

ICF can capitalize on the more than $500 million the MAHA program is set to receive in FFY26 by leveraging its public health research and ICF Next arm to help the new HHS initiative reach people and have an effective impact. Additionally, building out ICF’s existing fraud, waste and abuse capabilities to make them more applicable to agencies is another way for the company to ensure it is aligned with the Trump administration’s priorities.

TBR anticipates that the vendor will also explore ways to make its IT modernization and digital transformation work more agile while increasingly booking these types of engagements as fixed-price, outcome-based contracts, given the Trump administration’s preference for this contracting method. At least 50% of ICF’s IT modernization and digital transformation engagements are already fixed-price, outcome-based contracts.

 

Defense discretionary spending will not be reduced, according to the Trump administration’s skinny budget proposal and could even surpass $1 trillion when factoring in the House and Senate Armed Services Committees’ proposed defense reconciliation bill. ICF has made progress in the defense market over the years, with approximately 3% of ICF’s overall revenue coming from the Department of Defense (DOD) in FY24 and the vendor providing R&D as well as other services to an array of clients. While ICF will jockey for new opportunities to support the DOD and the Department of Homeland Security (DHS), TBR does not anticipate ICF will make meaningful progress in penetrating this space barring a drastic shift in M&A or alliance activity.

 

Although the majority of vendors in TBR’s Federal IT Services Benchmark have been keen to publicly share updates regarding their partnerships with hyperscalers and other allies over the last year, ICF has been largely reluctant to provide any news on its alliance activity. ICF will need to embrace its partners, leaning on commercial IT peers and hyperscalers to ensure it can successfully compete against top-tier vendors while bringing its portfolio more in line with the Trump administration’s goals.

 

Although ICF has relied on M&A activity in the past to rapidly build out its digital modernization business and expand its capabilities with low-code/no-code platforms, ICF is not likely to do this again anytime in the foreseeable future. ICF will not purchase any federal IT companies during 2025 due to the ongoing uncertainty in that space. ICF’s leadership team has, however, indicated that they are open to making another tuck-in acquisition in the burgeoning and highly lucrative commercial energy market.

 

ICF’s presence in the commercial energy market has been quickly growing and helped spur margin growth for the company while also bringing in additional revenue. TBR anticipates that the vendor will increasingly lean on this space and leverage its state and local client base to try and offset the disruptions plaguing its federal-facing operations. The health and social programs client market will continue to comprise a shrinking portion of ICF’s revenue in the near term.

 

Its contribution already declined from 42% of ICF’s revenue in 2023 to 38% in 2024. While there are still opportunities for ICF in the federal sphere and IT modernization is undoubtedly a long-term priority for the Trump administration, given DOGE’s efforts to reduce the headcount of agencies, the vendor will struggle during 2025. ICF’s full-year revenue growth guidance currently ranges between -10% and 0%, which translates to between $1.82 billion and $2.02 billion in revenue, during 2025. TBR suspects that ICF’s operating margin will decline from 8.2% in 2024 to 7.8% in 2025 as the tumultuous environment prevents economies of scale.

 

TBR’s DOGE Federal IT Impact Series will include analysis of Accenture Federal Services, General Dynamics Technologies, CACI, IBM, CGI, Leidos, IFC International, Maximus, Booz Allen Hamilton and SAIC. Click here to download a preview of our federal IT research and receive upcoming series blogs in your inbox as soon as they’ve published.

Hitachi Digital Services Brings IT + OT + AI to Mission-critical Systems

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From May 20 to 21, 2026, in Dallas, Hitachi Digital Services hosted close to 100 analysts and advisers for a two-day summit featuring Hitachi leaders, clients and technology partners. The following reflects TBR’s observations from the event, informal conversations with Hitachi leaders and clients, and TBR’s ongoing analysis of the overall IT services and professional services space.

Hitachi Digital Services perfectly positioned to take advantage of IT-OT convergence and AI adoption

Two tectonic technology shifts happening now and opening massive revenue opportunities play straight into Hitachi’s strengths, positioning Hitachi Digital Services for significant growth over the next five years. With IT and OT convergence accelerating and enterprises increasingly adopting AI at scale, Hitachi Digital Services can rely on Hitachi’s engineering DNA, deep expertise in specific industries, and firsthand experience in manufacturing as the foundation for a build-integrate-operate value proposition. The analysts and advisers event highlighted how well Hitachi Digital Services brings the entire Hitachi company to its clients, remains rooted in Hitachi’s engineering approach to everything, and maintains its focus on strategic priorities, even as the market shifts all around them.

 

Although smaller than the typical IT and professional services firms covered by TBR, Hitachi Digital Services warrants close attention in the coming years. Its distinctive business model, strategic direction and performance — particularly its combination of IT, OT, AI and domain expertise — position Hitachi Digital Services as a potential outlier in the IT services landscape.

Hitachi’s broader capabilities and assets help Hitachi Digital Services deliver unique combination of IT, OT and AI

Though only a two-day event, Hitachi included an impressive breadth of client speakers and panel participants, all from Hitachi Digital Services’ core industries, while also bringing technology partners into the discussion, occasionally simultaneously. One major telecom player described their relationship with Hitachi Digital Services as a client and with Hitachi overall as a go-to-market technology partner. An automotive client praised Hitachi Digital Services’ ability to “make our problems their problems to solve” and called out Hitachi’s “asset knowledge,” which blended IT capabilities with OT experience.

 

During onstage presentations and informal discussions with TBR, clients noted the importance of Hitachi Digital Services’ ability to seamlessly tap into the larger Hitachi organization and bring deeply technical engineering expertise to bear. Not surprisingly, clients attending the event also noted their well-established relationships with Hitachi, reinforcing Hitachi Digital Services’ messages around sustained focus on clients’ evolving issues. TBR’s assessment of Hitachi Digital Services’ client service value proposition and technology partner alliance strategy could be best summed up by a comment from a cloud vendor on stage with Hitachi Digital Services: “showing up together with Hitachi, delivering results, day after day.”

 

On Day 1 of the summit, a senior Hitachi Digital Services executive said the company maintained an “R&D and engineering first, consulting second mindset,” a sentiment echoed throughout the event. Another executive noted that innovation “starts with Hitachi engineering R&D.” Discussions around IT-OT convergence and Industry 5.0 included elements of consulting but remained rooted in engineering. For example, when discussing IT and OT convergence, Hitachi leaders described the company’s state-of-the-art railcar manufacturing plant in Maryland, a real, physical, operational test bed for digital innovations and Hitachi Digital Services’ IT + OT + AI value proposition. For Industry 5.0, Hitachi executives discussed Hitachi Digital Services’ overall AI strategy and noted the confluence of human and AI collaboration aided by AI agents.

 

In TBR’s view, the consistent undercurrent of engineering and R&D separates Hitachi Digital Services from peers in the IT services and consulting space, in part because of the credibility behind Hitachi’s “engineering first” assertion. Any company can say it has engineering capabilities; Hitachi builds railcars.

Domain expertise and organizational intelligence needed for broader AI adoption and agentic AI

Regarding AI, leaders at Hitachi Digital Services emphasized that effective AI begins with deep knowledge. Hitachi brings a strong foundation in business, operations, design, manufacturing and maintenance — an extensive base of expertise that it leverages to power its AI initiatives. In short, Hitachi Digital Services professionals argued they have more robust intelligence to feed into AI models and algorithms than most peers. Hitachi leaders also highlighted the company’s focus on organizational intelligence and its long-standing capabilities around “capturing the intelligence of complex organizations.”

 

In TBR’s view, Hitachi’s only complex organization likely provides a useful starting point for understanding the applicability of AI in organizational intelligence. Regarding agentic AI, Hitachi Digital Services leaders said AI agents must be specific to a domain, such as industrial AI, engineering AI or cybersecurity AI — an assertion that plays to Hitachi’s strengths. They also expect agentic AI adoption will accelerate in 2026, particularly around process and application modernization. One Hitachi Digital Services leader anticipated a shift from “minimum viable product” to “minimum viable agent,” a neat turn of phrase that might indicate both a shift toward a more consulting-focused mindset and internal pressures to deploy more AI-enabled assets. TBR notes that every one of Hitachi Digital Services’ competitors is working through those same shifts.

Mission-critical IT + OT + AI

In TBR’s view, Hitachi Digital Services’ ability to lean on the broader Hitachi company’s engineering expertise and real-world physical assets provides Hitachi Digital Services with clear separation from peers in the IT services space. If Hitachi Digital Services can deliver results in mission-critical — and constantly moving — settings, such as railway operations, clients in less dynamic environments can be assured of its capabilities.

Hitachi leaders noted shifts in the broader IT and OT spaces, such as the greater attention being paid to cybersecurity risks in OT and CFOs being generally more aware of the costs of funding fully separate IT and OT systems, which TBR believes may accelerate IT-OT convergence. Complemented by AI and infused with domain expertise, Hitachi Digital Services, in TBR’s view, should maintain a clearly differentiated position within the digital transformation and IT services space.

 

As a potential partner for large ISVs and cloud hyperscalers, Hitachi Digital Services’ combination of IT, OT and AI capabilities provides easily understandable differentiation. For large enterprises in Hitachi Digital Services’ target industries, Hitachi’s track record in mission-critical environments and the company’s sustained R&D and innovation create a compelling value proposition.

 

TBR will be more closely tracking Hitachi Digital Services’ evolution, particularly as IT-OT convergence accelerates and Hitachi Digital Services’ role in the broader ecosystem grows.

 

Graph: Degree of Consideration for Expanding Alliance Relationships (Source: TBR 1H25)

Atos Is Starting to Regain Client Trust and Develop Commercial Opportunities That Will Generate Revenue in 2025

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After years of instability and declining performance, Atos enters 2025 with new leadership, improved liquidity and early signs of commercial momentum, positioning the company for gradual recovery and long-term stabilization

Over the past several years, constant organizational changes have challenged Atos’ operations, weighed on the cost structure, and created uncertainty among clients, partners and employees around the company’s viability. Additionally, numerous changes made to its go-to-market approach and CEO team since 2019 — when Thierry Breton, Atos’ CEO for 11 years, left the company — have pressured Atos’ financial performance. On Feb. 1, Philippe Salle became Atos’ chairman and CEO. With a new CEO in place and a completed financial restructuring plan, Atos is working on gradually accelerating commercial activities and stabilizing its financial performance.

 

During 1Q25 Atos remained in an unfavorable position compared to its peers as the company’s revenue continued to decline year-to-year due to contract completions and terminations, lower business volume, and a reduction in scope of low-margin contracts. Revenue growth remained negative for the eighth consecutive quarter; however, Atos’ commercial activity began to improve with growth in order entry and an increase in the company’s book-to-bill ratio.

 

After completing its financial restructuring plan in December and limiting cash expenditures in 1Q25, Atos has strengthened its liquidity profile, which will allow for more investment flexibility and assist in stabilizing the company’s financial performance over the midterm. Although it will take time for new deals to convert into revenue, the positive trends in commercial activities indicate Atos is starting to regain clients’ confidence. TBR continues to expect 2025 will be a transformative year for Atos as the company solidifies client, partner and shareholder confidence; accelerates commercial activities; and rightsizes its cost structure to normalize profitability levels.

 

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Increased defense and infrastructure spending in the EU provides revenue expansion opportunities for Atos and its competitors

Recent legislative changes in the European Union (EU) emphasizing digital transformation, cybersecurity and technological sovereignty are influencing public sector IT spending trends, including increased defense and infrastructure spending. For example, the Artificial Intelligence Act from August 2024 introduced a risk-based regulatory framework for AI systems in the EU. According to the Act, public sector organizations that deploy AI must comply with strict requirements related to high-risk applications and AI systems, leading to higher spending in areas such as compliance, infrastructure modernization, AI-related training, and monitoring and incident reporting.

Atos is expanding activities with clients in the public sector utilizing its established expertise

The public sector is an established industry for Atos that accounts for more than 25% of the company’s total revenue annually, in TBR’s estimates, but over the past several quarters, Atos completed several contracts and saw a reduction in business volume in the vertical. These changes pressured the company’s revenue growth in the segment, notably in the U.K. & Ireland, which is a leading geography for Atos’ public sector activities, as well as in France and Germany. For example, in 2024, the Tech Foundations business line completed its business process outsourcing (BPO) contracts in the public sector in the U.K. & Ireland, which is part of Atos’ strategy to reduce underperforming activities in BPO. During the same period, Eviden’s Digital business line also completed contracts and experienced a decline in business volume in the public sector in the U.K. & Ireland and in Central Europe.

 

Atos will continue to reorganize its public sector business to improve performance while leaning on its established name to attract new clients. In March Atos won a five-year, £150 million (or $197 million) deal with U.K.’s Department for Environment, Food and Rural Affairs (DEFRA) to transform its service desk and provide end-user services for 34,000 employees. In April the Eviden business line won a €50 million ($57 million) deal with Serbia’s Office for IT and eGovernment to deploy a National AI Factory that consists of an AI Center of Excellence (CoE) and an AI-dedicated supercomputing platform. Atos will utilize its expertise in digital workplace services along with capabilities in AI, machine learning, analytics and automation.

 

Also in March, Eviden won a deal with Tisséo, the public transport authority of Toulouse, France. In January Atos extended its deal with the U.K. state-owned National Savings and Investments (NS&I) bank to provide core banking, payment, reporting and B2B services through March 2028.

Capgemini draws on client proximity, delivery resources and partner ecosystem to build momentum in public sector

Although Atos has an opportunity to expand activities with public sector clients, especially in its core geography of Europe, the company’s competitors are also actively pursuing opportunities in the sector. Capgemini has well-developed public sector capabilities and continues to gain momentum in the industry, notably in Europe, utilizing its established brand, client proximity, combination of onshore and nearshore service delivery resources, and collaboration with the partner ecosystem.

 

Capgemini is working with more than 15 ministries of defense across the EU and greater Europe as well as international agencies and strengthening relationships with more than 20 defense manufacturing providers. The company is also combining capabilities around digital engineering, data and AI, cybersecurity, and digital transformation to enable activities in areas such as military transformation, supplier network improvement, production management delivery and quality standards assurance and working with defense organizations around integrating workforce management and data and AI technologies. At 15.2% of revenue in 2024, the public sector represented Capgemini’s third-largest revenue-generating industry, following manufacturing at 26.7% of revenue and financial services at 21.3% of revenue.

Accenture’s Health & Public Service industry group remained the fastest-growing sector for the 10th consecutive quarter

In April 2024 Accenture acquired Intellera Consulting in Italy, adding 1,400 employees to Accenture’s regional operations to support public administration and healthcare sector clients. In January 2024 Accenture acquired 6point6 in the U.K., which will support Accenture’s efforts to rotate U.K.-based skills in areas such as cloud, data and cybersecurity and create a conduit for new revenue opportunities with clients in the public and healthcare sectors seeking to modernize IT infrastructure.

 

TBR expects Accenture’s investments across Europe within the last 18 to 24 months, such as in the U.K. (for health and capital projects) and Italy (public services and capital projects), will help the company’s Health & Public Service industry group fuel steady growth. Further, investments in Industry X capabilities, as well as sovereign cloud offerings with partners like Amazon Web Services (AWS) and Google Cloud, will also bolster Accenture’s regional opportunities as EU countries look to increase spending on defense and infrastructure.

Measures taken by DOGE will challenge vendors’ performance in the U.S. federal sector

While IT services providers are seeing growth opportunities in the public sector in Europe, they are preparing for potential disruptions in public sector revenue performance in North America, specifically in the U.S. federal sector due to Department of Government Efficiency (DOGE) initiatives. Measures taken by DOGE have put federal contractors, including Accenture and IBM Consulting, on edge, given the companies’ extensive work supporting federal agencies. The initial DOGE push has primarily targeted consulting projects.

 

We estimate that Accenture’s overall business consulting revenue trends at about 14% of total revenues, which means that $750 million to $1 billion of Accenture Federal Services’ annual revenue is at risk of disruption. We believe Accenture’s holistic portfolio and long-term relationships with many government agencies could help the company maintain its incumbent position.

 

TBR expects IBM Consulting’s 2025 revenue in the U.S. federal sector, which accounts for less than 10% of the business’s revenue, or approximately $2 billion in annual revenue, to be negatively affected by DOGE initiatives, as IBM stated during its earnings call that two contracts were negatively impacted in 1Q25. With federal systems integrator competitors facing similar challenges, we expect some of them to try to contest awards IT services providers had previously won and overtake their position through more flexible pricing options or packaged service offerings. For example, Booz Allen Hamilton and Leidos have filed a protest with the Department of Energy to review a $3.5 billion contract for IT support that Accenture won in January 2025.

 

TBR’s DOGE Federal IT Impact Series includes analysis of Accenture Federal Services, General Dynamics Technologies, CACI, IBM, CGI, Leidos, ICF International, Maximus, Booz Allen Hamilton and SAIC. Click here to download a preview of our federal IT research and receive upcoming series blogs in your inbox as soon as they’ve been published.

Salesforce Fills Its Data Governance Gap, Assembling an End-to-end Platform to Power Agentic Workflows

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Informatica acquisition is big step in already robust platform strategy

As agentic AI begins to blur the lines between applications and platforms, Salesforce continues to demonstrate its intent to lead in embracing change. Ever since the company’s 2018 acquisition of MuleSoft, purchasing platform vendors has, on average, been an every-other-year occurrence — and Salesforce continued this pattern in May when it finally entered into a definitive agreement to acquire Informatica. This marked the culmination of a yearlong pursuit, as the two companies were unable to reach an agreement at a rumored $11 billion price point in April 2024.

 

Waiting paid off for Salesforce, which is now expected to close at a price point of $8 billion — $3 billion less than the previously rumored figure. While the acquisition cost decreased due to a decline in Informatica’s publicly traded stock price, the company’s IP only became more relevant to Salesforce’s data and AI strategy over the year. As Salesforce CEO Marc Benioff put it, the merger will result in “the most complete agent-ready data platform in the industry.” It is a bold statement, but there is merit to the claim — Salesforce’s cohesive platform portfolio aligns well with the company’s Agentforce ambitions.

 

Informatica is an important addition to this cohesive portfolio. Data governance and management was a lingering capability gap — one of growing importance due to the lack of standardized data formats across acquired IP and the third-party applications offered via AppExchange.

 

Connecting customers’ entire front-office estate to Agentforce will require these data formats to be standardized across these systems, compelling Salesforce to offer these capabilities natively. This will bring Salesforce a big step closer to delivering on its promise to offer customers a unified, end-to-end portfolio capable of supporting agentic workflows. Selling the story and delivering on customers’ ROI expectations will be the next step, requiring Salesforce to be an innovator in contextualized model development as the company looks to unlock new use cases.

Informatica and its place within Data Cloud

With Informatica, Salesforce will gain a data management and governance leader. TBR covers Informatica’s product development strategy in greater depth in the recent special report Data Quality & Governance Pillars, and Ecosystem-led Approach Mark Informatica’s Entry Into Agentic AI. To quickly reiterate some of the big takeaways:

  • Informatica has become more ambitious over the past year in its agentic AI pursuits. The company argues that agents that can reason and act across workflows require far more than large language models. They need clean data, reliable orchestration and deep context. Informatica views its metadata-rich foundation — anchored in CLAIRE (Cloud-scale AI-powered Real-time Intelligence Engine) — as a critical advantage in this emerging stack. With this foundation, the company will target the AI opportunity from two angles. As TBR describes in the special report linked above, the two approaches include “Informatica for GenAI, in which customers use IDMC’s [Intelligent Data Management Cloud] data management capabilities to enable enterprises’ GenAI use cases; and GenAI from Informatica, where customers leverage Informatica’s GenAI offerings.” CLAIRE Copilot entered general availability at the event, while CLAIRE GPT, which is already used by over 550 customers, continues to automate cataloging, data access and metadata queries. In addition, Informatica made its formal entry into the agentic AI space. Eight new CLAIRE Agents were announced — focused on core data management tasks like quality, ingestion, lineage and modernization — and are scheduled to enter preview in the second half of 2025.
  • Ecosystem development is a major priority for Informatica as well. The firm highlighted its expanding relationship with both Microsoft and Salesforce. Microsoft and Informatica continue to deepen their ties, most notably with the integration of Informatica Data Quality as a native application within Microsoft Fabric, while CLAIRE Copilot, built using Azure OpenAI, reinforces the alignment. Still, this development is occurring outside the Salesforce umbrella. Under Salesforce ownership, integrations between Informatica and Microsoft will likely be deprioritized. However, the impact of the acquisition on Informatica’s broader relationships with third-party SaaS vendors will depend on Salesforce’s commitment to maintaining its open ecosystem approach.

Meanwhile, the company’s standard platform assets are likely of greater relevance to Salesforce. Informatica’s IDMC will bring ingestion pipelines and ETL (Extract, Transform, Load) tooling purpose-built for hybrid environments — something Salesforce would otherwise need to build or buy elsewhere. And with Informatica’s governance and metadata engine (CLAIRE), Salesforce will gain explainability and policy controls that are critical for deploying AI in regulated environments.

 

In short, Informatica will equip Salesforce with the ingestion and governance layers Data Cloud is missing — layers that are now prerequisites for scaling AI credibly in the enterprise. Crucially, Informatica’s prebuilt integrations and policy automation tools lower the barriers to entry for enterprise teams experimenting with agents, accelerating time to value for Agentforce deployments.

Salesforce is looking for a way to accelerate top-line performance with an end-to-end portfolio capable of powering automated workflows

Informatica joins MuleSoft, Slack, Own and Tableau in the ranks of large IP purchases Salesforce has made in pursuit of its platform-meets-application layer vision. While AI is still a relatively new part of this conversation, building a platform backbone and centralizing workflow management around Slack is a concept that has been around since the business messaging application was acquired in 2020.

 

The emergence of agentic AI brings a powerful new technology to drive deeper automation, which aligns perfectly with this existing goal but also elevates the need for a robust, well-rounded data layer. Agentic outcomes are contingent upon access to quality, standardized data and metadata, and the ability to natively offer modern governance capabilities via Data Cloud will help Salesforce deliver the positive ROI it is chasing with Agentforce.

 

This moves Salesforce closer to realizing the CRM-plus-data-plus-AI vision that the company’s leadership has been championing. That said, execution remains to be seen. MuleSoft and Tableau are healthy growth drivers for Salesforce, but Data & AI makes up just $1 billion of the company’s $37.2 billion in annual recurring revenue (ARR) as of CY1Q25. Agentforce contributes only $100 million in ARR.

 

Despite Agentforce’s triple-digit year-to-year growth, this scale means the contribution is not enough to move the needle in terms of total top-line performance. TBR continues to believe this will come with time as the still-nascent platforms mature in the market, though this will require the company to sustain the platform’s triple-digit growth in the short term, followed by high-double-digit growth in the medium term.

 

Internally, Salesforce is hiring into its sales teams and setting a goal for each of its account executives to land an Agentforce deal within the year. Ecosystem development will complement this strategy as Salesforce works with IT services partners to sell Agentforce and accelerate time to value for early adopters. TBR’s conversations with ecosystem channel partners have led us to suspect that the platform’s growth will accelerate in the future, but Salesforce will need to execute in the days and months ahead.

Informatica purchase will be margin accretive in CY2026

To briefly touch on the economics of the transaction, Salesforce anticipates the acquisition will be accretive to operating margins and cash flows by the end of the second year post-integration, so TBR does not expect it to derail the progress the company has made in establishing a new margin floor.

 

Near-term impacts are expected but should roll off quickly, allowing Salesforce to continue enjoying the ample free cash flow it has earned through its disciplined approach to cost-cutting. This will provide the company with meaningful liquidity, positioning it to remain a strategic acquirer long-term, as evidenced by the less splashy Convergence acquisition, which was announced in May.

Long-term acquisition strategy

TBR expects Salesforce to focus on integrating Informatica before committing to other large purchases. That said, smaller IP- and talent-driven acquisitions in the AI space will likely ramp up, similar to the recently announced acquisition of Convergence, an AI startup focused on agentic AI research. These smaller acquisitions will play a role in Salesforce’s portfolio development strategy.

 

Moreover, the company’s operating efficiency plan more than doubled free cash flow between 2023 and 2025, providing Salesforce with the capital to fund an accelerated acquisition strategy. AI will be a primary target of these acquisitions, though vertical-specific front-office solutions could also be major considerations as the company broadens its portfolio to create new native applications to connect to Agentforce.

Salesforce’s acquisition of Informatica is not only additive but also connective

By bringing governance, metadata and ingestion capabilities in-house, Salesforce will fill critical platform gaps that limit the company’s ability to scale Agentforce and deliver on its broader AI vision. The pieces now fit: a unified stack spanning CRM, data and AI. Execution, of course, is the next hurdle.

 

Agentforce is still in the early days of development, and the company’s ability to drive meaningful ARR from the platform will depend on sustained growth, smart ecosystem plays and clear ROI for customers. But once Informatica is in place, Salesforce will be better equipped to turn its AI ambitions into enterprise outcomes — and to do so in a unified way.

PwC Japan: Trust, Unity and Focus

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On April 15 and 16, PwC Japan hosted over 20 analysts, a partner and PwC executives for a day and a half summit at the company’s Technology Laboratory in Tokyo. Chief Strategy Officer and Chief Innovation Officer Kenji Katsura set the tone when opening the meeting by explaining that over the course of the event attendees would be hearing from leaders across PwC’s businesses — including audit, tax, deals and consulting — highlighting the importance of PwC’s strategy to deliver the full range of the firm’s expertise to clients. While ensuring that PwC’s services remain highly relevant to clients in Japan, the firm’s GTM strategy is closely aligned with its global network. This alignment allows PwC Japan to leverage the best practices and innovations from across the network while also contributing homegrown insights and advancements that can benefit clients worldwide.

The event included demos, presentations and one-on-one breakouts that allowed analysts to gain firsthand knowledge of PwC Japan’s evolving strategy. Demonstrating culture and an understanding of local business dynamics still provides an important nuance that allows PwC to elevate the value of its services, especially in the current uncertain geopolitical environment, as having highly country-specific capabilities and dedicated staff may become a greater asset than more explicitly globalized organizations. The following write-up summarizes TBR’s takeaways from the event and provides a glimpse into what we believe will set the next chapter of PwC’s business.

 

As a node in PwC’s ever-expanding ecosystem, Technology Laboratory brings art and science together through physical assets

Starting with a hands-on demo led by Technology Laboratory lead Shinichiro Sanji, PwC’s Technology Laboratory team demonstrated the pivot the firm has begun making in its interactions with clients, where the outcome of workshops has evolved beyond the art of the possible and into tangible solutions backed by the use of physical assets. Responsible for PwC’s tech-driven go-to-market strategy, which builds a business pipeline through cross-industry collaboration, Technology Laboratory in Tokyo is a first of its kind and enables the firm to demonstrate how it can interlink buyers beyond the traditional IT and/or finance functions into operational technology.

 

The cocreation of assets with commercial and public clients as well as academia will also help PwC demonstrate understanding and connectivity of physical AI and revamp industries where industrialized robotics are heavily in use. The Experience Center also remains an integral part of the Technology Laboratory’s success as creating future scenarios based on market and industry trends necessitates market insights delivered through multidisciplinary skills teams. With the Technology Laboratory and Experience Center housed adjacent to each other, it streamlines collaboration and interaction between teams when needed, while maintaining enough separation to enhance the unique value each team contributes during client workshops.

 

Meanwhile, as PwC strengthens its local relationships, it also continues to build nodes across its member firms that demonstrate an appetite for innovation and support client needs. For example, the firm recently announced the opening of the OT Cyber Lab in Dubai, United Arab Emirates (UAE) and the expansion of PwC’s Reinvention Lab in Australia, where it added hands-on capabilities for clients to test out advanced technologies.

We see PwC’s Business Experience Technology (BXT) and Business Model Reinvention (BMR) frameworks as the connecting glue between the various labs across PwC member firms, especially as the BXT raised the bar high for the firm’s consultants to drive outcomes. Now BMR provides a structured approach for the labs to have guided conversations with clients around their functional technology needs.

Maintaining continuity in executing against strategic priorities brings PwC closer, one member firm at a time

Following the Technology Laboratory demo, Masataka Kubota, Chair and Territory Senior Partner, PwC Japan Group CEO, kicked off the event by setting a high-level agenda centered on five megatrends: Climate Change, Tech Disruption, Demographic Shift, Fracturing World and Social Instability. These themes guided PwC’s presentations across its Assurance, Tax, Advisory and Consulting practices, with each area exploring or delving deeper into these trends.

 

PwC executives’ emphasis on reinforcing the alignment of PwC Japan and PwC Global strategies around BMR, trust, sustainability, and AI and data closely resonated with what TBR heard in a pair of similar events in the fall of 2024 in EMEA and the U.S. Kubota further amplified PwC member firms’ efforts around unity. PwC Japan’s regional customization and diversity remain vital to the firm’s success, especially as local clients lean on the company’s expertise and guidance to navigate choppy international market conditions.

 

Masaki Yasui, PwC Japan Group’s Consulting leader, continued the discussion, providing an update and insights into the firm’s line of business. Doubling in size in terms of people since late 2018, PwC Japan’s Consulting practice now houses 5,130 of the firm’s more than 12,700 employees in Japan and has grown at a double-digit rate for around 10 years — a pace that is expected to be sustained through 2030, according to Yasui. This will be an impressive achievement for PwC Japan’s consulting business, given the macroeconomic headwinds and impact on discretionary spending and consequently on consulting opportunities.

 

According to TBR’s management consulting research, consulting revenue experienced a deceleration in 2024 of 3.1% year-to-year, down from 8.1% in 2023, a trend we expect to continue throughout 2025.

Deploying tech-enabled arbitrage model will test PwC’s readiness to transform its professional services model, with consulting being most ripe for it

Leaning on the firm’s ongoing success rooted in its client-centric approach, focus on priority accounts, portfolio expansion and investment in growth areas provided a strong foundation for PwC Japan’s consulting growth. While these efforts are not unique to PwC, we believe what has helped the firm thus far is its collaborative culture across lines of business, making it appealing for partners to be part of. Growth will likely come from PwC Japan investing in new services to meet demand with BMR, strengthening its digital core, and front-office transformation serving as the lead in parts of the clients’ discussions.

 

Meanwhile, focusing on multinational clients while tapping into the power of PwC Japan’s Business Network will help the firm bridge opportunities with global clients in and outside Japan, further amplifying the need for better member firm collaboration. PwC Japan recognizes the evolving professional service market dynamics and has built out a new three-layer model for sustainable growth, with the key separation between the first and second layers being less human-dependent. Executing on the second and third layers, which are largely focused on accounting for changes in staffing and commercial models enabled through data intelligence and data monetization, will once again test PwC Japan’s collaborative culture, as often such initiatives are more challenging to be sold and managed internally than to bring externally with clients.

 

Many professional services companies grapple with similar challenges largely because of the time and materials (T&M) commercial model that consulting companies typically employ for such services. Developing data monetization and a fee-for-service type of model essentially requires companies like PwC to depart from the T&M model. We believe PwC Japan is one step ahead of many of its competitors in that regard as its consulting business has largely been driven by fixed-price engagements, making it easier to bridge into the fee-for-service setup it is looking to pursue as part of its layers two and three strategies.

 

The challenge for PwC Japan will be to educate other member firms on how to approach the opportunities, as elsewhere T&M remains the predominant commercial model. Further, PwC Japan, just like other member firms, sees managed services as part of its ability to continue to grow its business. While it is still a small portion of the current revenue composition (about 4% to 6% at the global level, according to TBR estimates), the firm continues to explore avenues to augment that gap, with leaning on its tax and cyber practice capabilities, delivery partners, and acquisitions among its top choices.

PwC’s Industrial Structural Transformation framework: A road map to the firm’s ability to execute through integrated scale and packaged services

Here lies the opportunity for PwC: developing a framework that demonstrates unity and focus while relying on its core success around trust. During the event, PwC unveiled an Industrial Structural Transformation (IST) framework, which we believe provides the necessary road map to execute against the firm’s aspiration of what the next chapter of the firm might look like. Bringing together all parts of the business — Assurance, Tax, Advisory and Consulting — and replicating them across industries while using data intelligence and a fee-for-service commercial model can help PwC build a foundation that resonates across all member firms.

 

Starting with use cases in Japan across segments like mobility provides a glimpse into how the framework can be applied as the evolution of AI extends into the physical world, and how the architecture of the entire industry can be transformed beyond the use of the software to include the business and social rules. Developing the backbone of going to market through integrated scale is the first step. Executing against it, especially bringing use cases outside of Japan to other member firms, which often deal with their local client issues, can prove to be a rewarding challenge.

Three key areas which PwC Japan discussed at length during the event — sustainability, risk management and tax — brought to light the closer collaboration and applicability of the framework at scale between the various parts of PwC’s portfolio. Sustainability and risk management bring together assurance and consulting while tax provides a conduit for closer collaboration with consulting.

 

Developing solutions that are function-specific provides the necessary horizontal connection across these areas while relying on the firm’s industry knowledge to demonstrate value and deliver outcomes. We believe a large portion of PwC’s success will come from including its technology partners at every step of development, deployment and management of its IST framework as partner feedback and knowledge management have become as critical as ever to understand how professional services companies go to market.

Application of technology solutions beyond the marketing hype elevates PwC Japan’s soberness and readiness to support the global network in handling macro disruptors

Virtually no market discussions today exclude data and AI. Takuya Fujikawa, PwC Japan Group Chief AI Officer, Data and AI Leader, took the opportunity to provide an update on the firm’s data and AI practice at the onset of the second day of the event. One important nuance struck TBR about PwC Japan’s portfolio: its applicability of AI across multiple domain areas, rather than simply drilling down on generative AI or agentic AI, which have been the predominant focus in similar settings. Adhering to open data principles while relying on its industry and functional expertise provides a strong foundation for the firm’s data and AI portfolio with examples around threat intelligence, intelligent business analytics or power market analytics highlighting various use cases.

 

With PwC US recently launching the Agentic Operating System, we expect PwC Japan to lean on these experiences and capabilities and follow suit with agentic AI solutions that meet local client needs for driving efficient operations. We expect the rollout to be bidirectional and other member firms to look to collaborate with PwC Japan on emulating its portfolio offerings. Scaling the use of such solutions will fit nicely and support PwC Japan consulting’s three-layer growth model, especially around the data intelligence and data monetization opportunities and the tech-enabled arbitrage model.

Additionally, discussions throughout the second day provided deeper insights into other strategic domains of PwC Japan’s portfolio, such as sustainability and trust, including cybersecurity. Common themes across value creation enabled through technology amplified the need for better alignment among practice areas within PwC Japan, especially as buyers’ focus in each area has shifted toward translating respective market challenges to business implications.

 

Within sustainability, PwC remains focused on creating customer value by emphasizing cross-business themes, including decarbonization and biodiversity, with most of the opportunities centered on government reporting mandates, further demonstrating the need for collaboration between audit and consulting services.

 

Withing trust, leadership highlighted cybersecurity and cyber intelligence services – both important elements of PwC Japan’s strategy – including its collaboration with delivery partners, such as with TIS Inc. for use of remote monitoring, alert responses and emergency interventions, among other security services.

Enabled by a humble and gracious culture, PwC Japan sets the bar high for what’s next in the firm’s strategy evolution

Just as technologies arm PwC consultants with tools to solve complex business challenges, the Technology Laboratory provides the enabling environment for all presentations, as regardless if executives spoke about audit and assurance, tax, advisory or consulting, they all leaned on a piece of technology that helped them connect the dots between art of the possible and the answer through the tangible.

 

As macroeconomic uncertainty persists, PwC has realized that instead of trying to fix issues outside its control, it is better to focus on its own transformation to prepare for addressing client challenges. We recognize there is still an opportunity for the firm to strengthen relationships with both internal and external stakeholders, including its alliance partners. Building a strong, common foundation for member firms is a crucial first step for integrated scaling. This involves connecting the Technology Laboratory and Experience Centers to deploy BXT and BMR at scale. Leveraging their experience with fixed-price contracts, they can then pivot toward fee-for-service models, providing the necessary frameworks for collaboration.

 

PwC Japan Group and its leadership set the bar high for its member firm counterparts in what it would take for the firms to work together more closely. Starting with better service line collaboration and portfolio offerings rollouts to establishing common KPIs and shared services are some of the prerequisites, and PwC Japan seems to have the ingredients to make it work all together. And while clients are less worried about how a firm operates and are more focused on solving their business and technology problems, working with a vendor that has its own house in order certainly makes it an easier partnership.

Oracle Strategy: Large Backlog and New Government Contracts Boost Vendor’s Long-term Outlook

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What is Oracle’s overall business strategy?

Oracle’s current business strategy centers on streamlining customer success efforts, enhancing partner collaboration, and expanding multicloud infrastructure. By consolidating its services under the Oracle Customer Success Services (CSS) umbrella, the company has improved life cycle support for clients, reduced overlap with systems integrators, and equipped partners with tools like the Cloud Success Navigator to enhance implementation and renewal outcomes.

 

NetSuite mirrors this with innovations like SuiteSuccess Anything as a Service for SMBs, emphasizing productized success and faster time to value. Simultaneously, Oracle’s deep industry expertise continues to differentiate it in vertical markets where SaaS vendors have struggled to gain traction. Its growing multicloud presence — especially through alliances with Microsoft Azure and Google Cloud — supports a global push for regional availability and compliance, allowing customers to run Oracle databases more flexibly across platforms.

 

Oracle is also aggressively targeting the public sector and international markets through partnerships with government-facing ISVs like Palantir and Adarga, deploying their AI solutions in Oracle’s compliant cloud regions. The company plans to invest heavily in expanding its infrastructure in key regions like the U.K., reflecting its plans to establish a broader a geographic and strategic footprint.

Oracle’s Go-to-market strategy

Launching a single customer success organization has helped Oracle foster more collaboration with partners, innovate more quickly with new services, and drive renewals and expansions among existing customers.

 

Enterprises: Consolidating under Oracle CSS has helped Oracle better focus on serving clients across the life cycle, including the initial preparation, implementation and managed services phases. CSS has also helped make room for partners to better engage with Oracle around Day 1 services, from implementation to go-live, and as a result, we suspect Oracle Consulting’s overlap with systems integration (SI) partners is greatly diminishing.

 

In addition to launching new white-glove support services, CSS is focused on giving partners the right tools to advance Oracle deployments. The biggest example is Cloud Success Navigator, which recently became generally available to Fusion customers for free. The tool was built with partners and includes features to guide customers and partners through best practices, offer education on new feature releases, and drive more collaboration between partners and Oracle’s own customer success resources to keep customers’ Fusion projects on track. In our view, Customer Success Navigator is an example of how Oracle has evolved and is now more willing to share best practices, and in many cases IP, with partners.

 

SMB: NetSuite is similarly making enhancements to its customer success portfolio, with a new Anything as a Service (XaaS) edition within Suite Success. Suite Success is part of NetSuite’s approach to productize customer success with prebuilt templates, modules and guided best practices to reduce time to go-live and improve product renewal rates, two leading customer success metrics tracked by SaaS vendors.

 

Vertical: While many SaaS vendors have tried and failed to successfully launch “industry clouds,” Oracle has long offered its own suite of bespoke industry applications, often sourced through acquisition but increasingly built from the ground up. Based on feedback we have heard from many global systems integrators (GSIs), Oracle partners appreciate steps the company is taking to deliver specific solutions designed to deliver value to the customer, and Oracle’s industry prowess complements many GSIs looking to put industry “wrappers” around SaaS solutions.

Geographic: Quickly expanding the availability of its database services in the cloud regions of Microsoft Azure and Google Cloud Platform (GCP) is a top priority. By the end of 2025, Oracle’s databases are expected to be available in an additional 13 Azure regions across all geographies.

 

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Oracle’s partner strategy

Oracle has been expanding work with government-led ISVs, hosting their AI software in certified OCI regions both at home and abroad

As evidenced by its recent partnership with Palantir, Oracle has been working with ISVs that sell into governments to host their software in OCI government regions. In early 1Q25 Oracle partnered with Adarga, a U.K. company that offers an AI-based intelligence tool for public sector agreements. As part of the new agreement, Adarga’s platform — Vantage — will be deployed in Oracle’s U.K. Government cloud, which complies with local government requirements.

 

The Vantage platform reportedly leverages an ecosystem of over 35 AI models to support defense agencies’ mission requirements in real time. Oracle has been heavily investing in the U.K. market and has been gaining traction with the U.K. government, which recently deployed the entire Fusion back office as part of an ongoing vision to shift toward a shared services model. More recently, Oracle announced plans to invest $5 billion over the next five years in new U.K.-based infrastructure.

 

As is the case with Azure, Oracle is expanding its database alliance, adding new regional availability so customers can run Oracle databases in Google Cloud data centers outside the U.S. In January Oracle announced it will expand into eight additional Google Cloud regions over the next year, including in international markets like Japan and India. Aside from entering new markets, both companies also plan to double capacity in existing regions where Oracle Database@Google Cloud is supported, including London; Frankfurt, Germany; and Ashburn, Va. Additionally, the companies are adding cross-region disaster recovery so data can be replicated on a standby database in a separate Google Cloud region.

 

In the past we have discussed how Oracle is leveraging the IoT networks and APIs from telcos to power the Oracle Enterprise Communications Platform (ECP). This quarter, Oracle partnered with Vodafone Business in a similar capacity, progressing with its strategy of working with telcos to expand the reach of the Oracle Communications portfolio and help customers connect more devices and networks to their cloud services. Specifically, Oracle will leverage Vodafone’s Global SIM, which gives access to over 580 networks, and Vodafone’s IoT network, which reportedly delivers connectivity in more than 180 countries.

Oracle’s resource management strategy

Now that all 3 hyperscalers are on board with its multicloud database strategy, Oracle focuses on expanding global reach within their data centers

With the Oracle Database@AWS service entering limited preview in 4Q24, Oracle is now officially delivering its database services across all hyperscale clouds. The company’s big focus now is on expanding the availability of its services in Amazon Web Services (AWS), Microsoft Azure and GCP data centers. The Microsoft Azure alliance is the most mature, offering the most availability, but in January Oracle announced it will expand availability to eight additional Google Cloud data centers while doubling the capacity in existing regions where the service is available, including London; Frankfurt, Germany; and Ashburn, Va. It is still early days for the Oracle Database@AWS service, with availability limited in the AWS’ U.S. East region, but both companies will make services available in additional global data centers throughout the year.

 

Leveraging the data center infrastructure of its peers through the multicloud database strategy could give Oracle the flexibility to invest capex dollars more strategically. Additionally, to support Oracle Alloy and sovereign cloud deployments in APAC, Oracle is staffing operations teams in markets like Japan and Thailand.

What is Oracle’s AI strategy?

Following in the footsteps of its peers, Oracle gives SaaS customers a way to build, orchestrate and manage AI agents as part of an ongoing value paradigm shift

TBR’s research shows that customers want to use AI agents out of the box but also want to build their own agents using enterprise data. Many SaaS vendors have recognized this value shift and, to stay competitive, are launching new AI capabilities designed to help customers build and manage their AI agents; Salesforce’s launch of Agentforce and Workday’s new Agent System of Record platform are top examples.

 

Though later to the market, Oracle has similarly recognized this trend. In 1Q25 Oracle launched AI Agent Studio, a new tool that allows Fusion SaaS customers to choose from among the 50-plus prepackaged agents that already exist within the Fusion suite and build entirely net-new agents leveraging prebuilt templates based on natural language prompts. A big differentiator for Oracle will be that Fusion customers can use the AI Agent Studio tool for free, which continues to suggest that Oracle’s AI strategy is all about delivering more automated experiences that will drive adoption and upgrades from within the legacy install base. Oracle’s AI pricing and level of integration between the applications and the underlying database and infrastructure will continue to be core differentiators, but AI Agent Studio was a long time coming and a step Oracle needed to make to keep pace with the market.

 

On the infrastructure side, expanding the availability of multicloud databases is one of Oracle’s biggest strategic priorities. Microsoft is Oracle’s most established multicloud database partner, and between the Oracle Database@Azure service and interconnected regions, this alliance serves over 450 customers. As such, Oracle will be expanding more widely with Azure over the next 12 months, as Oracle databases become available in 18 additional Azure regions, bringing the total Oracle Database@Azure region count to 26.

 

Oracle is one of the nearly two dozen cloud and software companies included in TBR’s research portfolio. Our unique research includes financial data that goes beyond just reported data, revenue and growth benchmarks, into go-to-market analysis, ecosystem and partnership teardowns, and market sizing and forecasting. We look at leading vendors in financial and business model analysis and add marketwide perspectives and direct insights from end-customer primary research. This combination of perspectives allows TBR to quantify the financial returns being generated from leading vendor strategies and identify where the market is headed based on feedback from customers making cloud investment decisions. Claim your free preview of TBR’s cloud and software research: Subscribe to Insights Flight today!

EY Reimagines Global Mobility: Human-centric, Tech-enabled and Business-critical

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EY Global Mobility Reimagined 2025, Barcelona: Over two days in Barcelona, EY hosted more than 150 clients and a few industry analysts for its first in-person EY Global Mobility Reimagined conference since 2019. During the event, TBR spoke with EY leaders, EY technologists and EY clients from a diverse set of countries and industries. Nearly all the client attendees serve within their enterprise’s talent, mobility or human resources organizations, and a common vibe throughout the event was the changing challenges facing HR professionals. The following reflects both TBR’s observations and interactions at the event and our ongoing research and analysis of EY. Three themes emerged over the two days of the conference, both from the presentations and in discussions with EY leaders and EY clients. First, rapidly changing technology, particularly AI, permeates every aspect of mobility, but the EY leaders and conference attendees returned repeatedly to the need to keep humans at the core. Second, EY did not emphasize or sell what EY can do but rather kept the focus on clients’ problems. A Tech Connect showcase featured cool new EY software and solutions, but the conference plenaries and breakout sessions never veered into a sales pitch for EY’s solutions. Third, in discussions with EY leaders, TBR heard a clear strategy for continued rapid growth and evolving technology alliances, underpinned by a commitment to managed services.

Humans remain central to mobility, although technology can help

Mobility — moving talent around the world on short- and long-term assignments — is inherently stressful for the employee and risk-inducing for the employer, so while technologies can improve the processes and mitigate risks, the experience remains a human one. Even with generative AI (GenAI) and agentic AI, everyone strives to keep humans fully at the center. Three moments during the conference highlighted this theme.

 

During a breakout session focused on emerging technologies, EY noted that nearly all current mobility-focused technologies and platforms have been designed around corporate requirements and policies. In the near future, technologies will be designed around the employee experience. EY’s new Microsoft Teams app for mobility, described below, provides an example of that shift. Second, during a panel discussion about the ethical concerns around AI adoption, one EY leader noted that even if agentic AI and other tools replace many of mobility professionals’ day-to-day tasks, nothing can replace the human touch, especially during a stressful time like an international relocation. Once again, the technology must enhance the employee experience. Lastly, EY professionals noted during a breakout panel on immigration that employers have had a mindset shift with respect to permanent residency.

 

Previously, employees tried to shift their residency status in a foreign country without assistance from their employer, reflecting employers’ concerns that once established in a country, those employees would be inclined to stay, perhaps necessitating a split with the employer. In some countries — Saudi Arabia was cited as a prime example — annual visa and work permit renewals are both expensive and stressful. Over a long-term assignment, paying for an employee to gain permanent residency could be cost effective and, by demonstrating support and bringing corporate resources to bear, could increase employee retention. Happy employees who stay longer and build better relationships with clients lead to better returns for the company on its investment in talent and mobility.

The event offered a forum for clients to discuss challenges and how they are coping

EY sold without selling. Every session included EY partners describing the firm’s views of the challenges facing mobility professionals and HR teams overall, but, with the exception of the Tech Connect showcase, EY’s capabilities were not front and center. In the majority of sessions, EY’s capabilities and the firm’s ability to help address those challenges simply did not come up. The EY partners focused on setting the overall parameters of the discussion, providing context around the challenges clients face, and then allowing those clients to engage with EY and with other clients about how they are coping.

 

In TBR’s view, this approach separates EY from peers while also reflecting the ethos TBR has observed at other EY events, such as the Strategic Growth Forum. EY provides clients a comfortable space to talk about issues and commiserate, without a hard EY sell. One attendee told TBR the conference made him feel better because his problems were not nearly as dire as the other professionals he spoke with during the event.

 

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Mobility practice serves as the glue across EY globally

In sidebar discussions with TBR, EY leaders’ comments reinforced two trends about Mobility — and the firm’s People Advisory Services – overall. First, People Advisory Services is growing ahead of the overall firm. The practice has been investing in managed services capabilities and scale, with an appreciation that noncommoditized managed services will be a significant component of People Advisory Services revenues. Second, Mobility remains an essential part of the glue that keeps EY operating as a global firm serving global clients.

 

In addition, during the event TBR noted a clear emphasis on Microsoft as a strategic partner, but EY noted expectations that other technology alliance partners, including ServiceNow, will become increasingly strategic to Mobility. Regarding the third point, Mobility services have challenged other Big Four firms, in part because — as practiced by EY — the burdens include forced cross-border coordination by and shared resources from separate member firms, managing a plethora of niche providers and technology partners, and deploying a software business model.

 

Countering those burdens, Mobility can serve as a centripetal force, helping align EY’s Tax, Audit and Advisory practices and giving additional weight to the firm’s global capabilities (and leadership, notably). As a complementary service to consulting or tax, Mobility advances EY’s client retention strategies, particularly with its largest clients. Internal benefits and external rewards. Win- win.

Emerging technologies begin to permeate HR

AI could not be ignored, in part because the notion of agentic AI-related disruption was an underlying current throughout the event. While not diminishing the challenges of adopting emerging technologies, EY professionals repeatedly stressed the need to adopt soon, smartly and with a long-term plan in place. In a breakout session, EY professionals used a now/next framework to describe a few trends in emerging technologies (including the corporate requirements and employee experience described above).

 

Currently, HR professionals and employees must wrangle with multiple technologies and platforms to execute on mobility challenges; in the near term, everyone will enjoy streamlined technologies with cohesive data-sharing strategies. Today, HR professionals rely on dashboards to provide analytics on mobility and other People Advisory Services issues, but soon predictive AI-driven analytics will provide insights and quicker decision making, with fewer (or perhaps no) dashboards.

 

Notably, when surveyed during the breakout session, the majority of HR professionals in attendance opted for “streamlined technologies” as their top priority. In a separate session, client attendees said their greatest expectation from AI would be data analytics and enhanced reporting.

A few other technology-centric comments and observations from the event:

  • EY partners said Mobility professionals did not need to wait for the next GenAI update or release — the technology needed is here and can be applied now.
  • Previous notions about data complexity may be outdated as the technology exists now to handle that complexity — HR professionals should focus on what they want to accomplish, not whether their data is perfect. (Side note: in the same discussion, EY partners observed that the biggest roadblock to adoption remains the availability of quality data.)
  • The ethics around GenAI remain … murky. EY partners noted the environmental impact of energy-hungry data centers and suggested a gap exists between innovation and accountability, eventually cautioning for a go-slower approach to AI adoption.

Overall, technology played across every aspect of Mobility with the common theme around enhancing the employee experience and measuring how EY’s Mobility practice can benefit a company’s strategy and employee retention, and even improve relationships with clients. In short: use technology wisely, with help from EY.

EY integrates mobility management into Microsoft Teams

The Tech Connect showcase included nine solutions, most notably EY Mobility Pathway, a corporate mobility management tool; EY Mobility Carbon Tracker, a customizable tool for scenario planning and carbon footprint measuring; and new Microsoft Teams app for mobility, a seat-based SaaS offering deployed as an application on Microsoft Teams. The last one stole the show. Employees do not need to log on to another platform, remember another password or navigate an unfamiliar app, but rather add the new Microsoft Teams app for mobility app to their Teams experience. The software can be configured to clients’ specific mobility needs, such as shipping dates, travel, housing, tax and other elements of the international relocation journey.

 

The new Microsoft Teams app for mobility looks and feels like a Teams app, has all the employer data, and seamlessly — as the employee experiences it — pulls in data and information from the third-party providers the employer uses, such as shipping companies or short-term housing agents. EY partners explained that new Microsoft Teams app for mobility is currently live with a few clients, and will go live soon across more of EY.

 

In TBR’s view, EY made a significant strategic decision in embedding new Microsoft Teams app for mobility into Microsoft Teams and not creating a separate employee-centric dashboard. This keeps employees in an environment they are already comfortable working in and avoids additional stress during a difficult time. EY’s commercial model for new Microsoft Teams app for mobility requires the firm to invest in software support and maintenance capabilities, but feeds into the firm’s overall managed services play.

Immigration rises to C-level topic

An immigration session resonated with TBR, in part because the TBR principal analyst in attendance once stamped visas at a U.S. embassy, but also because of the political issues that were openly discussed. EY partners noted that 2024 was a “super year” for elections globally, and immigration issues featured prominently in election politics in many countries. Extrapolating to global enterprises, EY partners made a convincing case that immigration has become a boardroom issue. EY’s Batia Stein and Chris Gordon noted that chief human resources officers (CHROs) and other executives surveyed by EY said the top option for solving talent gaps is moving talent where it is needed, no matter where on the globe — so, mobility.

 

As described above, assisting with permanent residency can alleviate some employee stress and enhance client and employee retention. In addition, using technology to enhance the employee mobility experience is not simply the right thing to do for employees; EY also believes the Mobility practice can be a business driver. And at a time when compliance issues have become more frequent and fraught, exacerbated by immigration raids and joint immigration and tax audits, Mobility can be a business driver for EY, too.

People Advisory Services global infinity loop reflects EY’s approach to clients’ issues

EY has a visual of its People Advisory Services Tax practice that features an infinity loop with People Advisory Services on one side and People Managed Services on the other, with all the related offerings creating an endless cycle of services, surrounded by EY’s other practices and offerings, such as Strategy & Transactions and Sustainability. The infinity loop helps understand EY’s positioning of its services and, perhaps more importantly, reflects EY’s understanding of its clients’ needs and challenges.

 

Companies keep recruiting, hiring, paying, rewarding, moving, repatriating, retiring and hiring in an endless loop, and EY has capabilities — including consulting, tax and software — that can accelerate movement around that endless loop. EY did not need to say that at the Global Mobility Reimagined conference, as clients understood it already. EY also has a stated ambition to grow People Advisory Services to more than $3 billion by 2031. Absent the worst possible global political and economic scenarios, including a drastic curtailment of global mobility, TBR believes that ambition is perhaps a bit too modest.

TBR Launches ServiceNow Ecosystem Report

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HAMPTON, N.H. (May 29, 2025)

Technology Business Research, Inc., is pleased to announce the launch of the ServiceNow Ecosystem Report, a comprehensive analysis of 10 of the leading consulting and services providers’ evolving relationships with cloud provider ServiceNow within the IT service management, customer service management, creator workflow, finance and supply chain workflow, and HR workflow segments.

 

The ServiceNow Ecosystem Report is the latest addition to our Ecosystem Reports research, which highlights data and analysis from multiple streams of TBR coverage to assess, quantify and model revenues, team compositions, go-to-market strategies and other qualitative insights, including accreditation and training of sell-through and sell-with partnerships, channels or alliances across global ICT markets.

 

The initial publication of this annual report — now available for download — includes data and analysis on the multipartner network, GenAI in SaaS applications, ecosystem opportunities and more. The report features Accenture, Capgemini, Cognizant, Deloitte, DXC Technology, EY, IBM, Infosys, KPMG and Tata Consultancy Services.

 

If you believe you have access to the full research via your employer’s enterprise license or would like to learn how to access the full research, click here.

Highlights from May 2025 ServiceNow Ecosystem Report

Prioritizing the needs of partners and enterprise buyers over internal growth aspirations will position vendors across the ICT value chain as leading ecosystem participants. It sounds like an idea born in marketing, but positive digital transformation (DT) outcomes will require multiparty business networks that bring together the value propositions of players across the technology value chain. By leading with their core competencies, players can establish needed trust among partners and customers alike, increasing their competitiveness against other players that have spread themselves too thin with aspirations of being end-to-end DT providers.

Emergence of multipartner networks will test vendors’ trustworthiness and framework transparency

Prioritizing the needs of partners and enterprise buyers over internal growth aspirations will position vendors across the ICT value chain as leading ecosystem participants. It sounds like an idea born in marketing, but positive digital transformation (DT) outcomes will require multiparty business networks that bring together the value propositions of players across the technology value chain. By leading with their core competencies, players can establish needed trust among partners and customers alike, increasing their competitiveness against other players that have spread themselves too thin with aspirations of being end-to-end DT providers.

 

To better understand these approaches, we have identified three back-office ecosystem relationship requirements that guide how the parties work together.

 

TBR has identified 4 cloud ecosystem relationship requirements that guide how the parties work together

ServiceNow Ecosystem Relationship Best Practices 

Consider PaaS layer and its role in the SaaS ecosystem: As discussed throughout our research, the value is shifting from “out of the box” to “build your own,” and customers clearly believe building their own custom solutions around a microservices architecture will give their business a competitive advantage. Naturally, we expect ServiceNow wants partners to take the lead in Now Assist delivery, but for the global systems integrators (GSIs) to see value, the generative AI (GenAI) has to actually change the business process.

 

Drive awareness through talent development efforts: ServiceNow’s growing portfolio outside the core IT Service Management (ITSM) space is creating new channel opportunities for services partners to capitalize on, compelling them to invest in training and development programs. Gaining the stamp of approval from a ServiceNow certification program enhances services partners’ value proposition, especially in new areas such as the Creator Workflow and Build portion of the ServiceNow portfolio, which positions them to drive custom application and managed services opportunities. Standing out in a crowded marketplace where services and technology providers vie for each other’s attention will elevate the need to invest in consistent messaging and knowledge management frameworks that elevate buyer trust.

 

Prioritize IT modernization ahead of GenAI opportunities and scaling NOW deployment: Some vendors have made GenAI capabilities available only to cloud-deployed back-office suites, meaning customers that are still using legacy systems must first migrate to the cloud before they can adopt the emerging technology. Partners must account for this modernization prerequisite by prioritizing traditional migration services through broader programs like RISE with SAP if they hope to pursue new opportunities over the long term. Reducing legacy technical debt will also free up resources, both human and financial, which will allow for broader ServiceNow portfolio adoption.

 

Set up outcome-based commercial models to scale adoption across emerging areas and protect against new contenders: Aligning commercial, pricing and incentive models that resonate with buyer priorities and achieving business outcomes can allow partners to expand addressable market opportunities, especially as scaling GenAI adoption necessitates greater trust in the portfolio offerings. ServiceNow’s consumption-based model provides a short-term hedge against potential tech-partner disruptors, which may take on the risk to offer similar solutions but are able to better align with services partners’ messaging through the use of outcome-based pricing.

 

 

Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

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Register for Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

 

A combustible and pressured consulting market is leading management consultancies to make more significant changes to their strategies than experienced over the past few years. Technology partners, including hyperscalers and software vendors, may not be impacted by direct changes in the near term, but the fallout from choosing the right or wrong strategy will affect how well each management consultancy delivers alongside their ecosystem partners.

 

The primary focus on the Big Four firms will be shared with strategy-led consultancies, including McKinsey & Co. and Boston Consulting Group (BCG) as they navigate the diverging market and face the influence of AI on the traditional consulting model.

 

Join TBR’s Management Consulting team on Thursday, June 26, 2025, for exclusive insights from our upcoming Spring 2025 Management Consulting Benchmark. This semiannual report provides key service line, regional, vertical, and operational data and analysis for 13 learning management consulting firms: Deloitte, EY, KPMG, PwC, Kearney, Bain & Co., BCG, BearingPoint, McKinsey & Co., Oliver Wyman, Accenture, Capgemini and IBM.

In this free session on management consulting industry predictions you’ll learn:

  • The different strategies management consultancies will take in 2025, and what these adjustments will mean for the consultancies’ partners
  • TBR’s predictions for which approaches will result in above-peer growth and which firms will stagnate or regress
  • How competitors, including IT services companies with consulting capabilities, can calibrate their strategies in the consulting market to take advantage of missteps by the Big Four firms, McKinsey and BCG

Register Now

 

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.
 
TBR Insights Live - Consultancy Prediction: Diverging Strategies to Widen the Gap Between Winners and Laggards

Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know

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Register for Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know

Opportunities will emerge after the dust settles from DOGE’s early actions

After an unprecedented four-year bull market in federal IT spending, the Trump administration and its Department of Government Efficiency (DOGE) have sparked widespread fear, uncertainty and doubt about the near-term future of the federal IT and professional services sector.

 

Shortly after the presidential inauguration, the General Services Administration began reviewing ongoing programs, and DOGE canceled thousands of IT and professional services contracts it deemed “non-mission critical.” This move sent shockwaves through the entire ecosystem of federal IT contractors and their partners. Since that time, federal technology vendors — particularly advisory-led firms — have been waiting anxiously for greater clarity and transparency around the Trump administration’s IT budget priorities.

 

Join Senior Analyst John Caucis and Analyst James Wichert Thursday, June 19, 2025, for a live discussion and Q&A on current disruptions to federal IT and professional services vendors’ order books and business development. Additionally, the team will look at how the administration’s plan to aggressively leverage digital technologies to make the federal government smarter and more efficient could have a long-term upside for the federal IT community and its commercially centric AI, analytics, cloud and telecom partners.

In this free session on expectations for federal IT vendors in 2H25 you’ll learn:

  • The impact of Trump’s second term and DOGE initiatives on federal IT contractors so far
  • How federal IT vendors are pivoting to support the Trump administration’s emerging priorities in AI, cloud, data science, defense technologies, quantum computing and security
  • The implications of shifting federal IT spending patterns and priorities for federal systems integrators’ alliances with ISVs, cloud hyperscalers, OEMs, telecom providers and others

Register Now

 

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.
 

TBR Insights Live - Trump 2.0 and the Rise of DOGE: What Federal IT Contractors and Their Ecosystem Partners Need to Know