TBR has been tracking performance of IT services companies for decades. As go-to-market strategies increasingly focus on industry-centric solutions, TBR determined to build trailing 12-month revenue based on a standardized breakout of key industry verticals.
 
In 2018 we expanded our IT services coverage to include estimates for seven industry vertical splits (full list below), leading to the recent launch of the IT Services Industry Vertical Data Excel file. This extensive data file includes revenue estimates for 17 IT services companies, including Accenture, Capgemini, DXC Technology, IBM and Tech Mahindra (full list below). Quarterly estimates, year-to-year growth, and percentage of IT services totals date back to 1Q21.
 
This proprietary data stream, in conjunction with our qualitative analysis of these firms, including their partners and how they operate, offers unprecedented intelligence on which companies are growing or maintaining their revenue or experiencing declines within industry verticals and allows for partner adjustments and competitive maneuvering.

TBR’s vertical-specific IT services data reveals notable industry trends

In the most recently published data file, several key insights stand out, including highlights from TBR’s research on Tata Consultancy Services (TCS), Capgemini and Wipro.

Most notable: TCS’ public sector success in India

Tata Consultancy Services’ (TCS) public sector revenues jumped 52.2% year-to-year in 3Q24, extending — and accelerating — five straight quarters of double-digit growth. Curiously, however, TBR’s data shows a deviation from the norm in geo data. Reported India revenues by TCS (as a percentage of revenue) have been growing at a mid-double-digit range for over a year. In fact, reported revenue has grown so rapidly that India generated more revenue for TCS than the rest of the Asia Pacific region combined for the first time in 3Q24, and that gap expanded in 4Q24.
 
While it is unquestionably an impressive growth story, public sector revenue accounts for less than 5% of TCS’ overall IT services revenue, making it strong growth from a relatively small base. Still, 52.2% is impressive relative to the market, and analysis in TBR’s quarterly reports on TCS can help us understand this success. In short: It’s India.

• “India was again a bright spot for TCS, nearly doubling its revenue composition from the previous year, now accounting for 8.9% of total TCS revenue. We attribute the growth in India to strong brand reputation and favorable government policies to incentivize companies to digitize their IT operations.” — TBR’s 3Q24 Tata Consultancy Services report
• “Although India has historically only accounted for 5% to 6% of TCS’ total revenue, we anticipate this share will rise over the next few years, reaching double-digit figures before peaking and stabilizing. IT spending in India continues to increase, indicating there is plenty of opportunity, particularly for locally based IT services firms such as TCS. For example, during 2Q24 TCS and Indian state-owned telco Bharat Sanchar Nigam Limited announced plans to build four data centers across India to meet rising demand.” — TBR’s 2Q24 Tata Consultancy Services report

 
According to TBR’s lead analyst on TCS, Senior Analyst Kevin Collupy, “They are killing it with local Indian enterprises and government organizations. And last year we reported on an uptick in consultancies and IT services companies investing in their India-for-India capabilities, offerings and scale. So, 52.2% growth in public sector, even as TCS itself only grew 6.4%, tracks with the overall India growth story while illustrating just how well TCS has been doing.” ​

Additional insights from 3Q24 data

Capgemini’s revenue declined 1% year-to-year in U.S. dollars (USD) in 3Q24, but the company’s public sector revenue increased by more than 4% in the same period. At 15.1% of the company’s total IT services revenue, public sector revenue significantly buoyed what would have been an even rougher quarter. Retail, CPG, Travel & Transportation declined 4% year-to-year in USD in 3Q24 and accounted for 15.1% of Capgemini’s IT services.
 
Wipro’s 19.1% drop in public sector revenue in 3Q24 looks terrible, particularly in the context of an overall IT services decline of just over 2%. The vertical did not pull down Wipro as a whole though, as it represents just 0.5% of total revenue. The real culprits were Financial Services (down 1.3%, while accounting for 33.9% of revenue) and High Tech, Communications & Media (down 8.1%, at 15.4% of revenue).

Access all IT services vertical-specific data

While a single quarter is only a snapshot of the market narrative, the numbers in TBR’s vertical-specific IT services data starts to paint the picture while company reports fill out the story. An updated IT Services Industry Vertical Data Excel file will be released quarterly in TBR’s digital platform, Insight Center™.
 
If you are a current TBR user with access to the IT Services Vendor Benchmark, you can download the IT Services Industry Vertical Data Excel file today.  If you’re interested in gaining access to the data, as well as TBR’s entire IT services research stream, start your free trial to Insight Center™.
 
Vendors covered in TBR’s IT Services Vendor Benchmark Data:

• Accenture
• Atos
• Capgemini
• CGI
• Cisco Customer Experience
• Cognizant
• DXC Technology
• Fujitsu
• HCLTech
• Hewlett Packard Enterprise Services
• IBM
• Infosys
• Kyndryl
• Tata Consultancy Services
• Tech Mahindra
• T-Systems
• Wipro IT Services

Industry coverage in TBR’s IT Services Vendor Benchmark Data:

• Financial Services
• Healthcare & Life Sciences
• High Tech, Communications & Media
• Industrial Solutions, Manufacturing, Automotive, Energy, Utilities & Chemicals
• Other Industry
• Public Sector
• Retail, Consumer Packaged Goods (CPG), Travel & Transportation

Atos showcases strength in manufacturing industry specialization

Although it is an understatement to say Atos has struggled with its financial performance in recent years, the new year gives TBR analysts a chance to look for signs of change or markers indicating that Atos’ strategic decisions, investments and leadership adjustments have put the company on the path to sustained and profitable revenue growth in the coming years. We are paying close attention to Atos’ enhanced and deepened partnerships with technology companies, its major multiyear deal signings, and the use cases Atos’ two business lines — Eviden and Tech Foundations — tout as indications of what is working well and where they are gaining additional traction (and traction equals growth).
 
Along with the usual digital security solutions, cloud migrations, platforms and advanced computing implementations, one recent use case stood out, surprisingly not only for what Eviden did but also for what the organization positioned its client to do in the future. As part of a five-year engagement, Eviden helped Spanish train manufacturer Talgo develop what Eviden called a “state-of-the-art fleet monitoring system” that can ingest and process massive volumes of data, bring information and insights to train maintenance engineers, and “achieve architectural flexibility and scalability to incorporate modern train series without additional development efforts.” While the first few elements should be considered core capabilities of any modern, AI-enabled, and purpose-built system, the last one addresses a customer sentiment we have been hearing relentlessly for the last 18 months: Make my current technology work better without additional investment in even more new technology.
 
But that is not what jumped out at TBR as something special and a marker of potentially good things to come.

Reselling the TSMART solution creates new revenue streams for Talgo

Eviden’s work with Talgo produced the fleet monitoring system Talgo SMART Maintenance (TSMART). In recent years TSMART has been improved with capabilities such as predictive maintenance and visualizations. So far, so good, and so much like most others.
 
There is a significant difference, though, as Eviden noted in the press release: “Long an aspiration of smart manufacturing, the ability to create value-adding services from products is now Talgo’s reality. TSMART can be enhanced with product packaging/branding to be offered as a service to third parties. Talgo can easily extend the TSMART system to new train series or offer it to customers as a service. Its customizable interfaces include options for company branding and user personalization as well as new train configurations.”
 
Eviden helped create more than just an asset for Talgo to use internally and benefit from increased productivity, operational safety and fleet reliability. Now Talgo can expand its offerings with its own clients, develop a new business model, create new revenue streams, and, likely, greatly enhance its stickiness and position across its ecosystem. Not every IT services engagement leads to a client creating a new business opportunity, but this one did.

Now, can Eviden recreate the success of TSMART with other clients? Can this become a calling card for Eviden, an example of what can separate the organization from peers?

Certainly not with every client and every engagement — routine designing and building of systems are just that, routine — but if Eviden brings the mindset behind TSMART into opportunities, particularly with long-standing clients in the manufacturing and energy industries, TBR anticipates a quicker return to revenue growth for Eviden, which will support Atos’ overall financial performance.
 
Atos has established expertise around delivering predictive maintenance solutions and is applying its skills across industries. The company is working with multiple clients in the theme park and attractions industry, utilizing data and AI as well as edge server technologies to reduce the downtime of rides and improve customer satisfaction. For example, in 2020 Atos won a deal with the Triple Five Group’s American Dream entertainment complex to provide predictive maintenance utilizing data analytics and AI solutions as well as BullSequana Edge servers to collect and store data from ride sensors and detect issues through real-time analytics at the edge.
 
In covering Atos and its two business lines, Eviden and Tech Foundations, TBR publishes a quarterly Atos report and a semiannual Atos Cloud report. TBR also includes the company in our quarterly IT Services Vendor Benchmark, AI and GenAI Market Landscape, and various ecosystem intelligence and digital transformation reports, as warranted by Atos’ investments and activities in those areas. Access all of this research and more with your Insight Center™ free trial. Sign up today!

Demand for analytics services has reached an inflection point, with new opportunities around the development and implementation of secure, industry-aligned agentic AI solutions refueling growth

From shadow AI to the advent of AI agents, generative AI (GenAI) has increased IT complexities and the need for greater enterprise resiliency, compelling vendors to enhance their cybersecurity portfolios. This is not surprising, given that according to TBR’s November 2024 Digital Transformation: Voice of the Customer Research, buyers ranked cybersecurity as the No. 1 technology supporting their digital transformation (DT) programs. Using AI to automate cyber threat detection will create opportunities to establish guardrails around AI identity in the world of multiagent ecosystems. Vendors’ ability to manage liability and accountability around AI cybersecurity will remain a key question as reports of bad AI continue to surface.

Analytics and insights services revenue expanded 5.9% year-to-year, on average, in 4Q24 for the 20 vendors included in TBR’s 1Q25 Digital Transformation: Analytics Professional Services Benchmark

While revenue growth remains lower than two years ago, when analytics and insights (A&I) services revenue expanded 14.3% year-to-year in 4Q22, there was a slight improvement in 4Q24 compared to six months ago when sales grew 5.6% on an annual basis. We believe the A&I services market has bottomed out and will start to improve as vendors capitalize on the dual opportunity to embed analytics tools within their IT modernization frameworks and develop and implement agentic AI solutions that address specific industry and functional pain points. We believe these two trends will also expand the addressable market opportunities for vendors as the need for greater AI security and a right-skilled bench will allow them to demonstrate value while they pivot their commercial models toward outcomes.

Security-related risks is among the top GenAI adoption barriers, presenting vendors with an opportunity to position cyber and AI as complementary solutions to help scale adoption

As TBR wrote in our 1H24 Cloud Infrastructure & Platforms Customer Research: “Most respondents cited security as the biggest GenAI adoption barrier, which makes sense as customers also referenced security as the biggest pain point associated with cloud technology.
 
That said, data-related challenges, such as governance and control of the data, are moving up the ranks and only reinforce the role that data architecture and data strategy play in GenAI adoption. It is a strong indication of where the hyperscalers and their partners, including the data ISV platforms they integrate with as well as the GSIs [global systems integrators], should be focused to help customers overcome these barriers. When asked about the role GSI partners play in data strategy, one-third of respondents said that the GSIs were instrumental in putting the right policies, tools and best practices in place around areas like data governance, quality and access.”
 
These findings are closely aligned with data from TBR’s November 2024 Digital Transformation: Voice of the Customer Research report where enterprise buyers ranked cybersecurity as the No. 1 technology supporting their DT programs. While investing in cyber-related capabilities is not a new trend, we believe the technology is experiencing a boom in terms of investment especially as chief information security officers try to balance the management of shadow AI with the increased use of GenAI tools for software development, content production and sales automation, among other functions.
 
While in the past cyber and cloud have gone hand in hand in terms of the buyer purchasing cycle, we see an opportunity for vendors to position AI and analytics and the attached cyber services as a more appealing value proposition especially as all parties face a new reality where robots (GenAI) are protecting themselves from other robots (cyberattacks).
 

The rise of robots guarding robots presents an opportunity for vendors to demonstrate value through accountability and cyber liability management, backed by domain and partner knowledge

Balancing the development of AI security models with enabling workforce productivity through the use of AI will help vendors create strong use cases for how to navigate the complexities that have arisen from the advent of the greater need for AI security. Vendors can then bring these experiences into client discussions as they often face similar struggles as shadow AI becomes mainstream.

Examples of vendors’ recent activities

• Accenture launched a suite of GenAI-enabled cyber resilience services and capabilities addressing issues such as deepfakes and helping prevent customer disruptions from across IT operations through supply chain management. Some of the services include Secure AI Solutions, which address enterprises’ AI program life cycle; Deepfake Protection; and Business Cyber Crisis Recovery.
• In October Eviden inaugurated an AI supercomputer in Denmark called Gefion as part of a deal from March with the Danish Centre for AI Innovation, which is owned by the Novo Nordisk Foundation and the Export and Investment Fund of Denmark. The supercomputer will enable large-scale AI projects and high levels of security for Danish data sovereignty, and support research and innovation in healthcare, life sciences and green transition.
• Cognizant expanded its Neuro suite to include cybersecurity offerings. The additional capabilities support a variety of devices across IoT networks and provide an AI-derived interface that showcases internal insights.
• The alliance with Clearspeed will leverage Deloitte’s IndustryAdvantage framework and Clearspeed’s AI-enabled risk identification platform to provide risk data and management capabilities supporting U.S. federal clients.
• DXC Technology has partnered with Checkmarx, a cloud-native application security specialist, to deliver comprehensive application security solutions globally. By offering Checkmarx One to its customers, DXC Technology aims to accelerate vulnerability detection and remediation throughout the software development life cycle.
• In August IBM announced it is adding GenAI capabilities to its managed Threat Detection and Response Services. The company launched IBM Consulting Cybersecurity Assistant to help clients better identify, investigate and respond to security threats. The Cybersecurity Assistant will be part of IBM Consulting’s threat detection and response practice and IBM Consulting Advantage.
• In September Tata Consultancy Services (TCS) announced an expansion of its partnership with Google Cloud with the release of two solutions: TCS Managed Detection and Response and TCS Secure Cloud Foundation.

KPMG is leaning toward legal services and AI-infused strategy consulting offerings to bolster sales as the firm navigates choppy market conditions within core deal advisory

Earlier in January news reports surfaced that a subsidiary of KPMG, KPMG Law US, had applied to operate in Arizona under a state program allowing nonlawyers to operate law firms and provide legal services in the state. This aligns with our Fall 2024 Management Consulting Benchmark Vendor Profile: KPMG, in which we discussed this topic.
 
KPMG’s revenue growth decelerated from 0.7% year-to-year in 1H23 to -0.6% year-to-year in 1H24 as the firm continued to face pressure in core markets such as deal advisory despite the uptick in signings — a trend we expect to continue into 2025 as we estimate management consulting sales to stay flat on an annual basis. Over the last six months, KPMG signed M&A advisory and restructuring deals, including those with Germany-based air-taxi manufacturer Lilium; Spain-based Santander Consumer Finance; and Romania-based retailer La Cocos. As KPMG seeks to diversify its portfolio and revenue opportunities, recent investments across its portfolio related to legal services suggest that demand across regions is choppy and that KPMG will be reviewing its positioning, one member firm at a time.
 
For example, in Australia, KPMG restructured its stand-alone legal services practice, folding KPMG Law’s Tax Controversy & Disputes practice under KPMG’s tax business. At the same time, in the U.S. KPMG is looking to invest heavily in AI to bolster its legal services offerings, creating a conduit for consulting business. Meanwhile, KPMG partnered with ContractPodAI to bolster its legal AI and contract lifecycle management capabilities as the firm seeks to expand its legal managed services opportunities targeting clients in the U.S., U.K. and Germany. We believe KPMG’s push in the legal services space can also help the firm gain access to the talent needed to enhance its governance, risk and compliance (GRC) value proposition, especially as more general counsels are getting involved in GenAI solution development.
 
Outside legal services and M&A advisory, we expect KPMG’s efforts to bolster its management consulting revenues will come from its investments in technology-centric capabilities, with AI and GenAI among the predominant topics impacting the firm’s strategy consulting sales. We believe the KPMG Lighthouse team will continue to provide a critical link enabling the firm to elevate conversations beyond the typical art-of-the-possible discussions and tying them to business outcomes with tangible solutions. While embedding AI and data science is not unique to KPMG, the firm has an opportunity to elevate the value of such offerings as the single most important technology the firm stands behind, especially as many of its competitors stretch their portfolios and messaging across multiple domains. While we understand this can be a tricky message to execute against, demonstrating depth and specialization will likely trump generalization moving forward as GenAI levels the knowledge field, helping KPMG stand out.
 
Legal services would only be part of KPMG’s story going forward, as we also discussed in the Fall 2024 Management Consulting Benchmark Vendor Profile: KPMG.
 

GenAI can help KPMG enhance its industry consulting expertise, provided the firm leans on partners to do the tech part and focuses on its business pain points

Healthcare was KPMG’s fastest-growing industry vertical at 6.4% year-to-year in 1H24, according to TBR estimates. As an outlier for KPMG’s growth, the vertical benefited from industry clients seeking to digitize health systems and improve the patient experience. KPMG is not alone in capturing high-growth opportunities in the healthcare sector as rivals Deloitte and Accenture have also captured robust sales expansions in the industry with both competitors enhancing value propositions through acquisitions including Gryphonic Scientific (biosafety and biosecurity) and Cognosante (federal health).
 
To counter competitive threats, KPMG leaned on organic means, announcing the opening of a Global Center of Excellence for healthcare based in Bermuda. While the center will bring in professionals from the Caribbean, Bermuda, the Crown Dependencies, and Mediterranean islands, it will also have access to KPMG’s broader network of 5,000 professionals across the firm’s service lines within the healthcare vertical, including 200 clinicians.
 
Outside healthcare, KPMG continued to rely on its industry consulting know-how to enhance portfolio capabilities around partner-enabled industry accelerators such as with Workday for Retail and Hospitality; with Meta using Meta’s open-source large language model (LLM) Llama to build solutions for internal audit and commercial loan processing, paving the way for opportunities within the financial services vertical; and with Salesforce around the use of Customer 360 solutions for healthcare, among other verticals.
 
TBR views these as important steps that are enabling KPMG to better compete with Big Four rival Deloitte, which has set its Industry Advantage program to drive long-term managed services and feed the Operate part of Deloitte’s business. In a recent conversation with KPMG’s Managed Services leadership, TBR got a chance to hear how KPMG is able to use the KPMG Powered part of its four-part framework — Connected, Powered, Trusted and Elevate — to drive conversations around industry pain points in verticals such as insurance and financial services that have helped generate managed services engagements. Additionally, leaning on strategic growth and delivery partners has helped KPMG demonstrate depth rather deviate from its core capabilities.
 
We expect KPMG’s next growth frontier to come from the firm’s ability to codevelop industry-specific small language models as clients look to take advantage of the power of GenAI without compromising security and privacy by using LLMs based on public data.
 

The wireless technology ecosystem is rallying around FR3 bands for 6G

The wireless technology ecosystem has settled on the upper midbands, specifically the 7GHz-24GHz range (aka Frequency Range 3 [FR3]). Within FR3, 7GHz-15GHz is considered the golden range for 6G, as it has the best balance between coverage and capacity and 1600MHz of total bandwidth could be made available in the U.S.
 
However, one of the biggest issues with these “golden bands” is the need for communication service providers (CSPs) to coexist with incumbent users, such as government entities and satellite operators, which utilize some of these channels for various purposes and would need to either clear, refarm or share those channels with CSPs for use in cellular communications. The telecom industry already has some experience with shared spectrum through CBRS, which operates in the 3.5GHz band, so there is a pre-existing framework and mechanism in place (i.e., Spectrum Access System) from which to begin establishing a spectrum sharing system for these new bands.
 
Ultimately, TBR believes that 6G will end up leveraging a mix of spectrum tranches, with midband, upper midband and mmWave frequencies all in play. Carrier aggregation and other frequency-combining technologies, as well as advancements in beamforming and endpoint devices, make these spectrum bands perform better when working together. Additionally, FR3 spectrum is not good at penetrating walls. Given that around 80% of wireless traffic is generated indoors — a statistic that is unlikely to change materially in the 6G era — FR3 bands would need to be complemented with lower bands to penetrate walls and provide optimal coverage and capacity.
 

Limited CSP investment and increased government role expected to shape the next cellular era

The telecom industry continues to struggle with realizing new revenue and deriving ROI from 5G, even after five years of market development. TBR continues to see no solution to this persistent challenge, and with no catalyst on the horizon to change the situation, CSPs’ appetite for and scope of investment in 6G will likely be limited.
 
TBR expects CSP capex investment for 6G will be subdued compared with previous cellular network generations, and deployment of the technology will be more tactical in nature, which is a marked deviation from the multihundred-billion-dollar investments in spectrum and infrastructure associated with the nationwide deployments during each of the prior cellular eras.
 
In a longer-term effort to address this situation, TBR expects the level of government involvement in the cellular networks domain (via stimulus, R&D support, purchases of 6G solutions and other market-influencing mechanisms) to significantly increase and broaden, as 6G has been short-listed as a technology of national strategic importance.
 

Click the image below to watch this recent TBR Insights Live session, 6G: How Government Intervention Will Shape the Next Generation of Telecom

 
With that said, 6G will ultimately happen, and commercial deployment of 6G-branded networks will likely begin in the late 2020s (following the ratification of 3rd Generation Partnership Project [3GPP] Release 21 standards, which is tentatively slated to be complete in 2028). However, it remains to be seen whether 6G will be a brand only or a legitimate set of truly differentiated features and capabilities that bring broad and significant value to CSPs and the global economy.
 
Regardless, the scope of CSPs’ challenges is growing, and governments will need to get involved in a much bigger way to ensure their countries continue to innovate and adopt technologies that are deemed strategically important.
 
 

Learn more

Download 2025 Predictions special report: 6G’s Fate Depends on the Level of Government Intervention

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