The U.S. federal government will need modern cloud services to be most efficient, regardless of DOGE-driven changes

Rolling pockets of chaos and an overall cloud of uncertainty may be the best way to describe the first two months of the new Trump administration. One upside to federal contracts is that they tend to be long-term in nature, which provides some stability for all types of vendors with existing contracts. However, the current transition has been rocky, to say the least, as contracts are getting canceled, agency staffing is reduced, and the existence of entire agencies is called into question.
 
Beyond the distinct financial impacts that are occurring to many federal systems integrators (FSIs) and IT vendors, the overall uncertainty about future changes has complicated government contractors’ ability to conduct business as usual. Short-term uncertainty will likely persist, but eventually we will see a silver lining for the ecosystem of IT providers catering to the needs of the U.S. federal government. The government may become a more streamlined entity, in all respects, but IT will need to remain at the forefront of U.S. government operations.
 
Differences of opinion on optimal levels of funding will persist, but most people concur that the IT infrastructure supporting many core government agencies is antiquated and long overdue for upgrade. After the Department of Government Efficiency (DOGE) completes its cost-cutting and agency reorganizations, the overall approach to modernizing those systems will come into greater clarity, but third parties including FSIs and IT vendors like Amazon Web Services (AWS), Microsoft, Google and Oracle will all likely be a part of the solution enabling the reformed federal government to modernize and play an ongoing role eliminating waste, fraud and abuse using a refreshed IT infrastructure environment.
 

Vendors hope federal spending materializes after the fog of dismantling and reducing headcount dissipates

Reducing the size of the federal workforce was an immediate focus for DOGE. With the “Fork in the Road” email sent by the Office of Personnel Management to encourage staff resignations and the nonvoluntary firing of workers across civilian agencies, the total number of employees shed from the federal workforce is estimated to have surpassed 100,000 in the first two months of the Trump presidency.
 
The entire federal workforce still totals more than 3 million, excluding 1.3 million active military personnel, and additional cuts are a certainty. Early in the formation of DOGE, the idea of cutting up to 75% of federal workers was floated, which could be far-fetched in reality. Regardless, it is clear the workforce-reduction efforts will continue to be a focus as DOGE expands its reach to additional government agencies and pushes further than just the probationary employees that made up the bulk of early reductions.
 
As headcount reductions continue, cloud and software vendors could assist the administration with those cuts while, at the same time, be impacted by the fallout of those cuts. On Workday’s FY4Q25 earnings call, CEO Carl Eisenbach painted the impact of DOGE in an opportunistic light, stating: “In fact, the majority of them [federal IT systems] are still on-premise, which means they’re inefficient. And as we think about DOGE and what that could potentially do going forward, if you want to drive efficiency in the government, you have to upgrade your systems. And we find that as a really rich opportunity.”
 
If, in the era of DOGE, government agencies undertake new, or continue existing, efforts to modernize IT systems and adopt cloud-enabled solutions, it would certainly be a big opportunity not just for Workday, but for the entire federal IT contractor market. The certainty of that opportunity is still questionable, however, given the rapidity with which major changes to how government operates are occurring. Any technology opportunities with USAID (United States Agency for International Development), for instance, are now dubious given the speed with which the agency has been dissolved, even as legal challenges abound.
 
Additional rapid changes will occur with the Department of Education given President Trump’s clear directive to new Secretary of Education Linda McMahon to dismantle the agency. On ServiceNow’s 4Q24 earnings call, CFO Gina Mastantuono noted some of this uncertainty while also remaining optimistic about the federal opportunity, stating the company’s guidance reflects a stronger U.S. federal performance in the back half of 2025, given changes brought on by the administration.

A build-it-yourself approach could challenge packaged IT solutions

DOGE head Elon Musk has clearly employed many of the same techniques and strategies he has used in the past, such as sending a “Fork in the Road” email to Twitter employees and requiring them to send a weekly email of their accomplishments after he purchased Twitter (now called X). With that in mind, it is relevant to think about the approaches to IT that Musk has used as CEO of Tesla and SpaceX for clues about what might occur in the U.S. federal space.
 
For some of the most important mission-critical IT and software decisions at Tesla and SpaceX, Musk deployed a proprietary software package that is shared by the companies to manage core manufacturing and sales, CRM and financial processes. Instead of utilizing a prebuilt solution from the likes of SAP or Oracle, internal teams at SpaceX and Tesla built, customized and manage their own ERP solution named WARPDRIVE. Musk could very well encourage a similar approach in federal agencies, either by licensing WARPDRIVE to those agencies or by directing more proprietary programs to be custom-built to reduce expenditures and theoretically achieve a superior technological solution. Either option would be challenging to implement but remains within the realm of possibility and would effectively reduce the addressable market for third-party IT solutions.
 

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Scaling back new and existing awards will stifle revenue for cloud vendors in the short term

In the U.S. federal sector, SIs are a key conduit for how cloud and software companies capture opportunities. The opportunity pipeline and associated timeline for deals is notoriously long for federal spending, but the total opportunity has already decreased in size based on the cuts made by DOGE. Some of the strategies and actions recently used by leading SIs in the federal space are discussed in TBR’s special report, Leading Federal Systems Integrators React to U.S. Department of Government Efficiency. As outlined in the special report, all 12 of the leading federal SIs are looking to reduce expenses and prepare for a slowing of revenue streams in the near term. After a period of federal investment and expansion, this certainly is a change in trajectory for their businesses. In addition to making similar cost reductions, all 12 vendors are also doubling down on their competitive differentiation to secure growth moving forward. All of the recent market shifts, including security, AI and digital transformation, have led FSIs to reinvest in capabilities that provide the best opportunities for long-term expansion.
 
In the short term, even existing contracts with the federal government are subject to reductions or termination, which impacts not only the SI but also the IT vendors that have secured subawards to provide their technology as part of the overall engagement. One example TBR cited in the special report was the $1.5 billion award Leidos has with the Social Security Administration (SSA), which includes subawards for Pegasystems, AWS and multiple other IT vendors. The Leidos deal was scaled back by DOGE, marking the beginning of the disruption to awards with SIs and subawards with IT vendors. SSA represents a small portion of the federal budget, so when DOGE looks to larger agencies such as the Department of Health and Human Services for cost reductions and efficiencies, the impact on the federal SIs and supporting IT vendors will be even greater.
 
In terms of the scale of revenue at stake, AWS alone has won close to $500 million in subaward contracts in the last three fiscal years. That does not directly translate into revenue, however, as the money still needs to be outlaid, a process that is even more tenuous given the current spending environment and actions taken by the DOGE team. In addition to deals tied to FSIs, cloud vendors and software vendors also have direct deals/prime awards with federal agencies that are at greater risk. AWS, for instance, has won a total of $445 million in prime award contracts over the past three fiscal years.
 
Most of those awards are multiyear contracts that are not guaranteed, and the revenue could be reduced or not disbursed. In fact, only $104 million of those awards to AWS have been outlaid, meaning the balance, more than $340 million, could be impacted. It is also important to note these figures only reflect past deals; we anticipate the new federal deal pipeline for vendors like AWS to shrink due to uncertainty and the administration’s focus on cost reductions.

Big cloud deals such as JWCC and Stargate are expected to proceed without significant funding impacts

The impacts of DOGE should be widespread throughout the government, but we expect the top federal IT opportunities, the Stargate Project and the Joint Warfighting Cloud Capability (JWCC) contract vehicle, to avoid major funding challenges. Though both projects are in the early stages and still subject to competitive jockeying between technology providers to secure task orders, we expect the funding to remain available even amid broader spending reductions.
 
The JWCC was announced in 2022 with a total of $9 billion in funding available to Oracle, Microsoft, AWS and Google Cloud. Oracle has been a leading provider under the contract to date. Roughly $2.5 billion has been awarded to the five vendors thus far in the contract, leaving more than $6 billion in additional task orders in the entire project. The spending bill passed in mid-March to avoid a federal shutdown illustrates the appetite to sustain, if not increase, defense spending. All the participants in JWCC have donated to and publicly supported the administration, which could solidify the longevity of the engagement.
 
Stargate was introduced by President Trump in the early days of his presidency, indicating that the project is likely to proceed in some fashion regardless of any budgetary pressure. The project will be a joint venture with OpenAI, SoftBank and Oracle to initially build a $100 billion data center in Texas. Over the next four years, the project aims to build additional large-scale data centers, with a total of $500 billion in funding, making it the largest centralized data center investment in history. The funding includes significant financial backing from the U.S. government, with contributions from SoftBank, a firm known for its long-term investment strategies. OpenAI, SoftBank, Oracle and MGX are the initial equity investors, while Arm, Microsoft, NVIDIA and OpenAI have been named as technology partners and will have some involvement in the project.

Modern cloud IT solutions should have an elevated role in the restructured federal government

The headcount reductions, eliminations of agencies, and overall uncertainty will disrupt business as usual in the U.S. federal sector at least through the end of 2Q25. Once the new, smaller and streamlined structure emerges, we expect the value of modern IT solutions to be recognized and spending to resume and even increase compared with the prior trajectory. Having fewer human resources, likely fewer skilled IT professionals, and an altered view of budgeting and ROI for all initiatives, IT included, all amplify the value that can be added by modernizing the infrastructure and solutions that support the mission of government agencies.
 
Across fragmented environments, many of which are still traditional on premises and based on aging technology, consolidation and use of government-grade cloud delivery can improve performance and reduce the total cost to deliver even over a relatively short three-to-five-year time frame. On the commercial side, many of the organizations we speak with note that the simplification of their IT environments is one of the strongest drivers of cloud adoption. AI and generative AI capabilities add to the benefits that can now be enabled. And for government agencies, preexisting data protocols and procedures increase their readiness to apply next-generation data analysis and AI. We see the business use cases for AI becoming more compelling on the commercial side, which bodes well for adding real value in the U.S. federal sector as it adapts to a more streamlined way of operations.

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.
 

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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!