A business-as-usual approach could cut technology services companies’ revenue by 30 percent or more, Bain & Co said, citing major disruptions like AI facing the global technology services industry.
In its new report, “The new Growth Equation for Tech Services,” Bain & Company found that AI is the biggest disruptor in tech services, but “not the only one.”
Economic nationalism, an aging population and the energy transition are also forcing changes throughout the industry. Together, these factors are changing the way technology service providers operate, deliver value and compete.
The global technology services industry is facing major disruption, and continuing business as usual could result in revenue losses of 30 percent or more, according to the report.
“Across the industry, margins have fallen by more than 200 basis points and valuations have returned to pre-pandemic levels,” she noted.
However, Bain’s analysis shows that these factors also create new opportunities.
The rise of an AI-driven economy is driving growth in areas such as data operations, systems modernization and chip design, while overhauling legacy platforms opens new opportunities for core transformation.
“With technology central to every business, AI-first models are redefining the way organizations manage processes and operations, creating a new wave of demand for technology-enabled transformation,” it said.
“Bain’s research suggests that continuing business as usual could result in revenue losses of 30 percent or more. Companies will lose 5 to 7 points of their EBIT margin by discounting deals to win more business, which could result in a 45 to 50 percent loss in shareholder value over the next five years,” she warned.
Leading providers that redesign their offerings, delivery models and talent and are able to move to value-based pricing are able to grow by 8 to 10 percent, maintain or expand their margins and increase their revenue multiple by 3 to 3.5 times.
It called on technology service providers to take decisive action, saying companies must use AI not only in customer solutions but also in their own operations.
“By taking a zero-based approach – redesigning internal processes with AI at the core – technology service providers can achieve margin improvement of 200 to 300 basis points,” the report said, adding that this efficiency gain can then fund further investments in innovation, delivery and talent.
Published on November 19, 2025