A new report from global consultancy Bain & Company, titled “The New Growth Equation for Tech Services,” identifies artificial intelligence as the most significant disruptive force in the global technology services industry. The analysis warns that companies adopting a business-as-usual approach could see their revenues erode by 30% or more.
The report highlights that economic nationalism, demographic shifts like an ageing population, and the global energy transition are collectively forcing a fundamental change in how tech service providers operate and compete.
New Growth Avenues in an AI-Driven Economy
Despite the significant risks, these disruptive forces are also unlocking substantial new growth opportunities. The rise of the AI-driven economy is fueling demand in several key areas, including:
- Data operations
- Systems modernization
- Specialised chip design
Furthermore, the necessary makeover of legacy IT platforms is unlocking fresh potential for core business transformation projects.
According to the report, leading providers that proactively reshape their offerings, delivery models, and talent strategies are best positioned to thrive. Firms that successfully transition to value-based pricing could achieve growth rates of 8% to 10%, sustain or expand their profit margins, and increase their revenue multiples by 3 to 3.5 times.
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Conversely, Bain’s research suggests that failure to adapt could lead to severe financial consequences. Beyond the 30% potential revenue erosion, firms risk losing 5 to 7 percentage points of EBIT margin due to competitive deal discounting. This could contribute to a staggering 45% to 50% loss in enterprise value over the next five years.
