Lessons for Indian IT services firms as Accenture, IBM lead GenAI charge

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Subscribe to enjoy similar stories. International Business Machines Corp. is staging a remarkable turnaround as it positions itself for the future, signing up an increasing number of clients for its generative artificial intelligence services tied to its consulting business.

While the Big Blue’s book of business—bookings and actual sales—related to GenAI stood at more than $2 billion as of July, Accenture Plc. last week reported $3 billion in GenAI bookings in 2023-24, according to the companies. A common trait of both the Arvind Krishna-led IBM and the Dublin-headquartered Accenture, the world’s largest software services company, is the strong growth in their consulting business—a pace India’s software services companies are unable to match yet.

“IBM and Accenture were bringing clients into proof of concepts at the (World Economic Forum) at Davos and as part of the sales process much earlier in the game. Some of it was related to consulting, others was just more investment in marketing dollars and POCs," said Ray Wang, founder and chief executive of US-based Constellation Research Inc. “I wouldn’t say all the Indian IT services firms have missed out (on GenAI).

(But) I do agree that having strong consulting helps," he added. To be sure, India’s biggest information technology services companies Tata Consultancy Services Ltd, Infosys Ltd, and HCL Technologies Ltd do not report revenue from their consulting or AI practices. These homegrown IT companies have been grappling with lower client spending on IT services over the past few years, while clients globally are spending more on AI-related consulting.