A new paradigm: IT companies will need to adjust business models

While the Indian IT industry says AI will create more jobs than it extinguishes, there could be short-term pain and entirely new business models will be required in the long term

The 3QFY25 (October-December 2024) results and associated management guidance from the information-technology (IT) sector indicate that the industry may be on the cusp of a tectonic shift in business models. This impression was reinforced by industry leaders at the recent Nasscom Technology and Leadership Forum. While the third-quarter results were decent and guidance was cautiously upbeat, the impact of the adoption of artificial intelligence (AI) is clearly being felt and this will necessitate a change in business models for the classic Indian IT services firm. Management commentaries reflect an improving macro environment with green shoots in discretionary spending, while the