TBR’s Business Insights

Federal IT Spending Trends: Why Growth Is Contracting and Where It Is Shifting

03.30.26

The Trump administration has proposed a double-digit increase in defense spending, which will flow through to IT budgets in the Department of Defense and Intelligence Community, particularly in areas of national security, which will receive top priority. Federal IT acquisition is also slowly pivoting to embrace outcome-based contracting, while the DOD looks to accelerate IT purchasing by adopting new and innovative IT procurement approaches.

Katherinasim, Canva Pro

Governance Becomes a Prerequisite for Success with AI

03.30.26

Governance was a recurring theme across content sessions and executive meetings at Mobile World Congress 2026. As telecom operators move from experimentation to operational in AI, creating a corporatewide, centralized framework for data management, model oversight and regulatory compliance is becoming essential. Without clear governance, AI initiatives often remain fragmented across business units, leading to inconsistent outcomes, duplicated efforts and limited enterprise impact.

Getty Images via Canva Pro

New Growth in Consulting Is Emerging from an Unexpected Place: Managed Services

03.18.26

A scaled managed services practice trained in spotting consulting opportunities and armed with AI-enabled solutions will unquestionably win some management consulting market share. More significantly, from TBR’s objective view, is whether the Big Four firms can manage their staffing, brand promise and technology alliances to take advantage of the managed services practices they’ve already built and use those opportunities to return to robust management consulting growth. Maybe, but probably not all four. The next two years will be telling, and TBR expects the existing differences between the Big Four will become even more pronounced.

Skills Shortage Will Challenge the Scaling of Sovereign AI in 2026

02.20.26

AI-related skills will remain scarce across both buyers and ecosystem partners as the rapid pace of innovation and the technical complexity required to enable sovereign AI continue to hinder adoption. These challenges, combined with a lack of clearly defined and compliant use cases among sovereign customers, gaps in sovereign cloud infrastructure availability and steep AI learning curve faced by ecosystem partners, will constrain meaningful investment and implementation of sovereign AI throughout 2026.

PaaS Revenue Will Outpace SaaS Revenue for Cloud Software Vendors

02.17.26

Enterprise customers are prioritizing the modernization of their existing SaaS estates rather than adding new applications, driven by market saturation, accumulated technical debt, and a growing imperative to become AI-ready. As IT buyers shift their focus toward modern platforms, traditional SaaS leaders should expect their PaaS segments to continue significantly outperforming their core SaaS businesses in revenue growth.

Dee Angela, Canva Pro

Alliances Will Extend Beyond Core Offerings as AI-driven Sales and Marketing Reshape Ecosystems

02.12.26

IT services companies have their limits, and clients have preferred technology vendors, leading IT services companies to look to alliances to drive new growth. We have seen this pattern before, but in 2026 we will see IT services companies extend those alliances into devices, connectivity and even silicon, requiring a multiparty alliance approach that will strain commercial models, sales strategies and alliance leaders across the ecosystem.

Consulting Will Rebound in 2026

02.10.26

After a period of relative softness, consulting revenues are expected to rebound to high-single- or low-double-digit growth as pervasive uncertainty pushes enterprises to seek external guidance. Demand will be particularly strong around risk mitigation, strategic planning and AI adoption, positioning forward-deployed engineers, supply chain management and people advisory services as leading revenue drivers in 2026.

Bad Debt Expenses Will Rise for CSPs in 2026

02.06.26

In a K-shaped economy that increasingly separates financial winners from losers, the majority of households and businesses on the lower arm of the “K” are under mounting financial strain and are finding it more difficult to pay their bills. As these economic pressures persist, communications service providers (CSPs) should expect bad debt expenses to continue rising, with the potential to meet, or even exceed, levels experienced during the Great Recession.

How Will Advanced AI Impact Pricing, Labor Practices and Client Expectations?

02.05.26

Advanced AI may be front and center in IT services strategy, but execution challenges remain a familiar story. Despite ongoing hype around unlocking new efficiencies and nonlinear growth, IT services firms continue to grapple with the reality of needing labor arbitrage in the short term and meeting client expectations.

Previous Next

Our most-read analysis, free in your inbox each week!

Fill out the form to the right to subscribe to Insights Flight today

Husein Signart

Hardware-centric Vendors Continue to Make Their Move Into Software

03.25.25/by Catie Merrill, Senior Analyst

Though revenue mixes are increasingly shifting in favor of software, driven in part by acquisitions (e.g., Cisco’s purchase of Splunk), hardware continues to dominate the market, accounting for 80% of benchmarked vendor revenue in 3Q24. Industry-standard servers being sold to cloud and GPU “as a Service” providers are overwhelmingly fueling market growth, more than offsetting unfavorable cyclical demand weakness in the storage and networking markets.

Mozcann, Getty Images Signature

PwC Middle East Experts Weigh In on Economic Trends and Transaction Activity

03.21.25/by Patrick Heffernan, Practice Manager and Principal Analyst

PwC Middle East’s webcast provides excellent monthly insights into the region’s economies, but it is not the only active Big Four firm. As TBR reported in our Fall 2024 Management Consulting Benchmark, KPMG “announced the opening of Risk Hub in the United Arab Emirates (UAE) in collaboration with Microsoft and IBM, paving the way for more in-person, tech-enabled GRC [governance, risk and compliance] discussions with regional clients embarking on their digital transformation programs.” TBR also learned in February that KPMG intends to open a new Ignition Center in Riyadh, Saudi Arabia, in 2025, building on the firm’s global network of innovation and transformation centers.

Numforest, Getty Images

Deployment Services in Telecom Face Post-5G Slowdown, Shifting Market Dynamics and Growth in Fiber Expansion

03.21.25/by Michael Soper, Senior Analyst

The deployment services market faces growing headwinds, including communication service provider (CSP) consolidation, open vRAN’s lower installation costs, and reduced demand for site location and construction (SL&C), offset somewhat by hyperscaler spend and 5G rollouts in select developing markets. Hyperscaler investments provide incremental volume to the market, and TBR notes these companies are increasing their investments in access technologies (e.g., Google Fiber).

TBR Case Study: Price Benchmarking

03.12.25/by TBR

Explore this competitive pricing example from TBR’s Tailored Services team, which helped this global Top 3 hardware OEM capitalize on their investment in pricing research.

Bagi1998, Getty Images Signature

Saudi Arabia’s Message to Global Firms: Deliver Real Value or Step Aside

03.05.25/by Patrick Heffernan, Practice Manager and Principal Analyst

Bottom line upfront: Understand that this is a Saudi story, not a PwC story, although undoubtedly it doesn’t feel that way in PwC’s corridors right now. Saudi Arabia has an opportunity to send some critical messages to players in the country, in the region and globally, and the kingdom is taking advantage.

Getty Images Signature

SaaS Vendors Bet on AI Agents to Unlock New Revenue Streams

03.04.25/by Alex Demeule, Senior Analyst

For SaaS vendors, the long-term opportunity lies in the ability to upsell GenAI solutions integrated directly into their existing workflows. While all major SaaS providers have made such solutions generally available, revenue from GenAI tools has not been enough to offset the slowing top-line growth many vendors are experiencing. Issues like cost, reliability, data governance and use-case validation remain obstacles to broader adoption, preventing the technology from becoming the growth driver vendors had hoped. Nevertheless, enterprise SaaS vendors continue to hold an optimistic long-term outlook, with many believing the technology will become a strategic necessary.

Kentoh, Getty Images Signature

Who Is the Market Leader in IT Services?

03.03.25/by Elitsa Bakalova, Senior Analyst

Eight of the top 10 IT services revenue leaders in TBR’s IT Services Vendor Benchmark reported accelerated positive trailing 12-month (TTM) revenue growth year-to-year in U.S. dollars (USD) during 3Q25, indicating vendors are capturing pockets of growth opportunities despite lingering growth challenges caused by macroeconomic uncertainty, tight discretionary spending, and constrained spending in the U.S. federal sector.

Vertigo3D, Getty Images

The Middle East’s Economic Transformation: A Real Decoupling or Persistent Uncertainty?

02.25.25/by Patrick Heffernan, Practice Manager and Principal Analyst

The long-sought-after growth of strong non-oil economies, the eventual weaning of these pivotal Middle East countries from subservience to the price of oil is happening now and happening quickly. And should a trade war break out between the U.S. and the European Union (EU) or the U.S. and China, Saudi Arabia and the UAE — and the rest of the Middle East economies — will suffer. A production surge by the world’s largest oil producer — the U.S. — would further dampen oil prices, constraining Middle East governments’ budgets. Not everything is perfect, but certainly the big picture looks promising: Non-oil economies in oil-led countries have shown persistent, seemingly lasting growth.

ispyfriend, Getty Images Signature

New IT Services Vertical Revenue Data Shows TCS’ Public Sector Surge and Market Shifts

02.19.25/by Patrick Heffernan, Practice Manager and Principal Analyst

Learn about TBR’s new IT Services Vertical Revenue Data Excel file. 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.

Tony Studio, Getty Images Signature via Canva Pro

Fujitsu Expands Kozuchi AI Platform and Strengthens Partnerships to Drive Digital Transformation

02.06.25/by Kelly Lesiczka, Senior Analyst

Fujitsu’s investments in Fujitsu Kozuchi have equipped the company well to appeal to clients’ needs around the technology, providing opportunities to supply analytics with associated text, vision and trust in support of business operations. While AI technology evolves rapidly to include new capabilities, Fujitsu’s approach to developing the platform and leveraging partners and internal capabilities gives it an advantage in offering a wider set of services.

Free Data & Analysis

Subscribe to Insights Flight today!