Archive · 19 Nov 2025
Tech Services Firms Face 30% Revenue Drop Without Change
Tech services companies might lose a lot of money if they don't change how they work.
AI is making big changes, but other things like economic nationalism and an aging population are also causing problems.
These changes can create new chances for growth, but companies need to adapt to stay profitable.
Business-as-usual approach could erode tech services revenue by 30% or more
AI is the biggest disruptor, but not the only one
Economic nationalism, aging population, and energy transition also cause industry changes
Margins have fallen by over 200 basis points, valuations at pre-pandemic levels
AI-driven economy creates new growth opportunities in data operations and chip design
- Who
- Tech services firms
- What
- Face significant revenue loss without change
- When
- Currently, with potential impacts over the next five years
- Where
- Globally
- Why
- Due to major disruptions like AI and other industry changes
Status Quo Advocates
Change Proponents
Revenue Loss
Status Quo Advocates
Continuing current operations may lead to significant revenue loss
Change Proponents
Adapting to changes can prevent revenue loss and even increase growth
AI Impact
Status Quo Advocates
AI is the main cause of disruption
Change Proponents
Other factors like economic nationalism and demographic shifts also play significant roles
- Disruption Factor
- AI, economic nationalism, aging population, energy transition
- Potential Revenue Loss
- 30% or more
- Current Margin Decline
- Over 200 basis points
- Valuation Status
- Returned to pre-pandemic levels
- Growth Opportunities
- Data operations, systems modernisation, chip design, core transformation
- Potential EBIT Margin Loss
- 5 to 7 points
- Potential Enterprise Value Loss
- 45% to 50% over the next five years
- Growth Potential for Adaptive Firms
- 8% to 10% with sustained or expanded margins
