“AI marks the largest structural shock since the Y2K,” Fersht stated, emphasizing that organizations treating AI as merely an incremental change “are just sleepwalking into a crisis right now.” He pointed out that AI is reducing delivery timelines so drastically that traditional staffing-based business models are becoming “unworkable”, indicating a fundamental reset for the industry.
While the disruption is substantial, Fersht cautioned that the transition may not happen overnight. Drawing comparisons to the dotcom era, he noted that technological shifts often unfold over years rather than months. “It is a slower burn… there is time to reset, retrain talent, and make adjustments,” he remarked, adding that India still possesses a “big opportunity” if it hastens its response.
Reinforcing the magnitude of this change, Dan Ives, Managing Director at Wedbush Securities, referred to AI as the “fourth industrial revolution” and the most transformative technology wave seen in decades. “This is the biggest tech transformation we’ve witnessed in our lifetime,” he asserted, predicting that the market for IT services will ultimately broaden despite short-term disruptions.
Ives highlighted that AI is already reshaping a significant portion of enterprise services work, and underscored a multiplier effect throughout the technology ecosystem. “For every dollar spent on an Nvidia chip, there’s an $8–$10 multiplier across the rest of tech,” he noted, indicating opportunities across software, infrastructure, and services.
However, he indicated that the full impact on IT services will manifest with a delay. According to Ives, 2026 will be pivotal for software monetization, while “the tidal wave” for IT services is expected to arise in 2027–2028 as enterprises scale up AI-led architectures.
Fersht highlighted that signs of immediate disruption are already evident in deal structures and hiring practices. Enterprises are increasingly asking for the same results with fewer personnel, prompting a shift from labor-driven contracts to outcome-focused models. He described this transition as “services as software,” where automation and agentic AI lessen reliance on large workforces.
“We’re witnessing the same tasks being accomplished with significantly fewer people,” he remarked, providing an example of a large contract where a requirement for 700 personnel was replaced by a delivery model using just 300. This shift is anticipated to flatten conventional workforce hierarchies, with companies hiring more entry-level staff while downsizing mid-tier positions.
Beyond operational models, Fersht pointed out a deeper structural challenge for Indian IT — what he referred to as the “CIO trap.” Historically, firms have developed strong ties with technology leaders, but decisions regarding AI-led transformations are increasingly being made at the CEO, CFO, and board levels.
“It’s more than a bottleneck… this represents one of the most significant changes the Indian industry must face,” he cautioned, warning that companies risk being relegated to execution roles if they do not strengthen their engagement with the C-suite. He noted that global consulting firms like Accenture, Capgemini, and Deloitte are better positioned due to their deeper consulting expertise.
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Yet, Ives contended that while automation poses challenges, it will not eliminate the necessity for IT services. He anticipates demand to grow in areas such as cybersecurity, compliance, and hybrid cloud deployment, where firms lack internal expertise. “There will be job cuts, but AI… will create more jobs than it removes,” he asserted.
Both experts concurred that the upcoming phase of growth will hinge on how quickly Indian IT companies adapt their business models, ascend the value chain, and align AI adoption with business outcomes rather than simply technology implementation.
