SiS Teconomy

Technology • AI • Digital Economy • M&A
CCO. 25 years building and scaling technology businesses.
News, analysis & occasionally contrarian views.

[SiS Teconomy @SirkoS]

25+ years in technology. And I am still surprised how often technology is not the deciding factor.

People + business model + capital + execution are.

AI is changing that equation again. And probably faster than most companies think.

I will share what I find interesting here. Tech, AI, digital business, IT services and M&A.

Sometimes news. Sometimes experience. Sometimes a contrarian view.

[SiS Teconomy @SirkoS]

My take in @iBusiness:
https://t.co/1S2qMCyEbj

[SiS Teconomy @SirkoS]

What will clients still pay IT service providers for in 2027?

Less pure implementation and coding capacity.

More Applied AI, domain expertise and the ability to turn existing platforms into measurable business outcomes.

[SiS Teconomy @SirkoS]

This little WPTG news caught my attention, because I know exactly what it means.

Their model actually looks quite familiar to me: a group of specialized IT companies covering consulting, software, enterprise platforms and managed services.

I spent quite a few years building a similar model at diva-e through Buy-and-Build.

One thing I learned: buying companies is difficult. But integrating them into one successful organization is at least as difficult.

We wanted to keep the entrepreneurial spirit, customer proximity and specialist capabilities of the individual companies. At the same time, customers increasingly expected us to act as one company across capabilities.

We thought people would work together because they liked each other.

And they did.

But they had little motivation to cross-sell. Why would they? It simply hadn't been part of their mindset before.

That's the constant tension in Buy-and-Build:

Integrate too little and you remain a collection of companies.

Integrate too much and you destroy part of what made them successful in the first place.

Maybe the real skill in IT services Buy-and-Build isn't integration.

It's knowing where integration actually creates value – and shifting people's mindset towards it.

https://t.co/5bDgLl4yDU

[SiS Teconomy @SirkoS]

@kaiskhimji We already see typos on prupose...

[SiS Teconomy @SirkoS]

With all the AI deployed at companies, it becomes more and more a critical infrastructure. Many small to midsize companies will not be able to maintain the proper infrastructure and resources to secure the AI backbone of their business, once they rely on it.
Beacon recognizes this and creates a central AI function and infrastructure as shared services for their portfolio companies. AI then becomes a portfolio-level value creation capability.
And it may be particularly interesting for PE.
The next generation of value creation within Buy-and-Build be more about deploying one AI operating model across many specialized businesses. Maybe that's already enough to lift.

https://t.co/nzIfHNaqr4

[SiS Teconomy @SirkoS]

Everybody is talking about AI transformation.
But putting AI on top of a bad business process doesn't transform anything.
Digitizing a shitty process gave us a digital shitty process.
Adding AI may just give us an AI-powered shitty process.
That's why I find HCLTech's new Pulse unit interesting. They explicitly bring AI + platforms + engineering + business process transformation together.
This is where I think the discussion needs to go.
Stop building another 50 AI MVPs.
Find 3–5 real lighthouse use cases where AI fundamentally changes a business process.
Build them as products, not pilots.
End-to-end. Integrated. Governed. Used by real customers or employees every day.
The hard question is no longer:
“Where can we use AI?”
It is:
“Which business process can we make fundamentally better because AI now exists?”

https://t.co/EUuWwgc5Lm

[SiS Teconomy @SirkoS]

@jasonlk Account Executives will Not be replaced nor reduced, if the Economics don’t need it. Call Centers will !

[SiS Teconomy @SirkoS]

Impressive for a product-led business with a massive inbound funnel. But I wonder how far this translates into complex Enterprise Sales.

Few customers, high ACV and complex buying centers need differentiation and trust. If everybody uses AI to research the same accounts and generate the same “personalized” outreach, we may all become more efficient – but also more interchangeable.

Maybe AI makes the human factor MORE important in Enterprise Sales, not less.

[Tomasz Tunguz @ttunguz]

Vercel took its inbound sales development team from 10 people to 1.25, increased productivity by 30% & it costs just a few thousand per year in tokens. https://t.co/FC0neW7rjZ

[SiS Teconomy @SirkoS]

Impressive for a product-led business with a massive inbound funnel. But I wonder how far this translates into complex Enterprise Sales.

Few customers, high ACV and complex buying centers need differentiation and trust. If everybody uses AI to research the same accounts and generate the same “personalized” outreach, we may all become more efficient – but also more interchangeable.

[SiS Teconomy @SirkoS]

Something looks strange here. KPMG is cutting another 200 jobs in UK Advisory. And this time even people working in AI + Data + Cyber are affected. AI is supposed to be THE consulting growth market. So why cut AI consultants?

Maybe because customers don’t actually want “AI consulting” but executing business strategy WITH AI.

Did I miss something?

https://t.co/HFI0TcGzEj

[SiS Teconomy @SirkoS]

An interesting acquisition by Wavestone – in the world of AI Coding and AI Application, the business of the customer becomes even more. Important, not the coding skill will be the differentiator anymore:

industry expertise
senior customer relationships
business transformation
execution know-how
--> Not another coding factory.
This is where I believe IT services M&A will increasingly go. Salesforce, SAP and Adobe are implemented. AI makes the technical implementation more productive.
So the scarce asset becomes understanding the customer’s business and actually executing its strategy.

Technology remains the foundation. Business transformation becomes the product.

https://t.co/ur2TSsCXrV

[SiS Teconomy @SirkoS]

This is the IT services transformation in one announcement.

PwC is restructuring its India delivery model around a 40,000-person JV and what it calls “AI-enabled managed services 2.0”.

For 20+ years, the services playbook was relatively simple:

move work offshore - add more people - reduce blended cost - protect margin

Since months we are discussing that AI will attack exactly that model.

Moving a low-level task from London or Frankfurt to India matters much less if an AI agent can do 70% of it anyway.

And this is not only about development.

Same for Ticket triage, routing, L1/L2 support, monitoring, incident resolution, knowledge management and testing - This is actually be the bigger change, obviously foreseeable as well.

Development is project business. Application Management is often long-term, low-level, recurring revenue, where humans were just a temporarily solution.

Now AI takes a significant part of that workload, it attacks the economics of the traditional offshore model from both sides: Build AND Run.

The pyramid changes:

-> less commodity production
-> more domain knowledge
-> more business process understanding
-> more AI-enabled managed services

Is this something India can deliver?

https://t.co/509Z67Ocif

[SiS Teconomy @SirkoS]

SaaS apocalypse was a construct from people who have no clue about enterprise software and its complexity.
Most large enterprises are not going to rebuild their CRM, ERP or service backbone with vibe coding. What a crazy thought that was!
Happy that it now swings back to normal. Salesforce, ServiceNow, SAP and Workday are recovering as AI gets embedded into the platforms rather than replacing them.
They become the doorkeepers of Applied AI.

AI ? - will eat software from the edges!

We just replaced our contract management software with SharePoint + Copilot. And we will do the same with our proposal management.

[SiS Teconomy @SirkoS]

Artefact acquiring German strategy consultancy Nunatak is another interesting signal for where IT services are heading.

If AI takes over more and more of the coding, the value of consulting and domain knowledge will increase. Not that this is completely new, but I just wanted to use the acquisition to point this out again.

At a recent meeting with a DAX customer, it became quickly clear that understanding the technology will not be enough. You need to understand the customer’s business and their most pressing issues – and answer with guidance, clarity and creative ideas.

For years, IT services companies have just thrown more technical delivery capacity at the problem.

Now, platforms like Adobe, SAP and Salesforce are more or less implemented or cloud migrated. It is increasingly about executing business strategies.

The value will sit in understanding what should be built, how it fits into the business and, especially, how the organization needs to change.

The consultant may become more important again. The coding factory less so.

https://t.co/e8ysCnsQqh

[SiS Teconomy @SirkoS]

Google Cloud + Accenture are building a unit with up to 1,000 forward deployed engineers working directly with customers.
Which is what IT services firms have done for 30 years – until Covid came and everybody wanted to work remotely and arranged their lives accordingly.
Now the pendulum swings back. But in a different way.
Much more focused on customer value.
AI will certainly remove a lot of low-level delivery work. But enterprise adoption creates another type of services demand:
less coding factory
more process understanding
more integration
more change management
The IT services pyramid may shrink, but it will become much more impactful and efficient.
For me, an interesting counterpoint to the “AI kills IT services” narrative.
IT services companies need to start building FDE teams of their own – not only for AI implementation.

https://t.co/lDYzwR8Bkp

[SiS Teconomy @SirkoS]

European companies need an EU-AI champion not just for political reasons, but for Europes way of dealing with souvereignity and data security. For large B2B or B2C companies, and especially in regulated industries, this matters. Deployment + integration into existing infrastructure will help adopting AI in Europe. Sovereignty alone is not a business model, but sovereignty + enterprise relevance might be. Thanks Mistral for pushing !

[SiS Teconomy @SirkoS]

European companies need an EU-AI champion not just for political reasons, but for Europes way of dealing with souvereignity and data security. For large B2B or B2C companies, and especially in regulated industries, this matters. Data control + Deployment flexibility + integration into existing infrastructure.

[SiS Teconomy @SirkoS]

European companies need an EU-AI champion not just for political reasons, but for Europes way of dealing with souvereignity and data security.
Companies can customize the models and run them on their own infrastructure. For large B2B or B2C companies (like Miele), and especially in regulated industries, this matters.
Data control + Deployment flexibility + integration into existing infrastructure
Sovereignty alone is not a business model, but sovereignty + enterprise relevance might be.

[SiS Teconomy @SirkoS]

@jasonlk Just came from customer meeting yesterday, implementing a multi-level-marketing digital platform with in-person field sales. Agentic solutions need to create convenience killer features - and it does!