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The Services Era and the Race to AI Profitability

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Overview

Challenges

Summary

The business world is obsessed with AI. Most of the chatter? Jaw-dropping tech, massively funded startups, jobs disappearing. That's noise. Beneath the hype, something far more profound is happening. AI is not merely another technology wave. It's about to launch the most violent reordering of business models and competitive dynamics the tech industry has ever seen. Market after market will be transformed. And here's the question that should keep every stakeholder awake at night: Which companies—the startups or the incumbents—will capture the profits and dominance? More importantly: Do they even understand the game they're playing? Download to continue reading…

Key takeaways

Serviceless AI is a myth

AI makes action, accountability, and outcomes the vendor’s job, services become the profit engine.

Pricing must shift to value and outcomes

Per-seat revenue erodes as AI automates work; margins survive by shifting to value-based or outcome-based pricing.

Incumbents can win the AI race by retooling services

Domain expertise + services scale are the unfair advantages—if you move now.

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I always get outstanding insight and perspective from TSIA research, this was no exception.

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Andrew Krainin, Senior Director, Technical Services Strategy & Operations, Cisco Systems

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