Contraction Before Expansion: How AI Is Poised Spark Tech Services Growth

Over the last two years, something unusual has happened in the technology services industry, an industry that, for three decades, could almost be counted on for steady growth. Historically, consulting, systems integration, and outsourcing, especially those tied to the software development lifecycle (SDLC), have expanded at rates of 5 to 15% annually.

But today, growth has flatlined. Depending on the quarter, the industry has fluctuated between 1% growth and a 2% contraction. Of course, there are firms still growing, but their growth comes at the expense of others. The industry has entered what I would call a market share swap environment. Those gaining ground are doing so by taking business from competitors rather than expanding into new demand. Overall, there’s effectively no net growth in the market.