6 hrs ago
Capgemini CEO: AI Growth Offsets Decline in Traditional IT
AI helps technology companies finish some projects with fewer people and less time.
That can make older IT work cheaper and reduce revenue from those services.
However, businesses are also paying for new AI projects.
These projects include updating computer systems, redesigning products and using AI agents.
Capgemini says this new market could eventually be worth $400–500 billion.
Its CEO says this new AI work may keep the technology-services industry growing.
Capgemini is also changing how it charges customers, using more fixed prices instead of billing for hours and workers.
The company says governance, costs and cybersecurity will become important as companies use more AI.
Capgemini CEO Aiman Ezzat estimates AI could create a $400–500 billion services market.
He says AI-driven efficiency is reducing revenue from traditional IT-services work.
Without new AI-related business, Ezzat expects the technology-services industry to remain roughly flat.
Capgemini expects industry growth of about 4%–5% annually over the next three to four years.
The company is shifting from time-and-material billing toward fixed-price and outcome-linked contracts.
- Who
- Capgemini and its chief executive, Aiman Ezzat, are assessing AI's effect on technology services.
- What
- AI is reducing the cost of traditional IT work while creating a new market for AI adoption and transformation services.
- Where
- Ezzat made the comments to CNBC-TV18.
- When
- Ezzat discussed the outlook in an interview; Capgemini expects 4%–5% industry growth over the next three to four years and plans to report defined AI-related figures next year.
- Why
- AI lets companies complete existing projects more efficiently while creating demand for system modernization, redesigned processes, AI agents and related services.
Traditional IT Deflation
AI-Driven Expansion
Effect on industry revenue
Traditional IT Deflation
AI allows existing projects to be completed with fewer workers and in less time, putting downward pressure on prices and revenue.
AI-Driven Expansion
New spending on AI adoption, modernization, redesigned products and AI agents could create a $400–500 billion market.
Business growth outlook
Traditional IT Deflation
Without the AI opportunity, Ezzat says the technology-services industry would be roughly flat.
AI-Driven Expansion
AI-related work could support industry growth of about 4%–5% over the next three to four years, with faster growth possible later.
Customer pricing
Traditional IT Deflation
Time-and-materials contracts can reduce billable hours when AI improves productivity.
AI-Driven Expansion
Fixed-price and outcome-linked contracts may allow providers to retain more of the value created by efficiency gains.
Key facts
- Estimated AI market
- Capgemini estimates the emerging AI technology-services market could reach $400–500 billion.
- Expected industry growth
- Ezzat forecasts technology-services growth of about 4%–5% over the next three to four years.
- Traditional IT effect
- AI productivity is creating deflationary pressure on traditional IT-services revenue.
- Billing shift
- Time-and-materials work fell from roughly half of Capgemini's business three years ago to about 35% last year.
- Future billing mix
- The time-and-materials share could eventually decline to 20%–25%.
- AI reporting
- Capgemini plans to report AI-related figures next year using five defined value pools.
- Key concerns
- Ezzat identified governance, cost and cybersecurity as increasingly important issues in AI deployment.
Quotes
Aiman Ezzat
Chief Executive of Capgemini
“Without the AI opportunity, we'd have pretty much a flat industry.”
CNBC TV 18
Sources
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