Executive Viewpoints | Business Model Battles

28 Dec 2019
by Marvin Newell

The market’s need for true transformation is driving a competitive war that pits legacy business models against the innovators.

Forty years ago, juggernauts such as Accenture, CSC, HP/EDS, and IBM dominated the global services industry. Over time, they gave way to India-centric firms such as Cognizant, Infosys, and TCS. Now those Wall Street darlings find themselves pushed from the technology headlines by upstarts such as Blue Prism and IPsoft. Few predicted that IBM would report negative growth for the 17th consecutive quarter in April 2016. HP absorbed EDS and then, after moves to scale down the services business still fell short of expectations, split the company. It is now spinning the core services unit out and merging with CSC (who just completed splitting off its federal government business as it struggles to sustain profitable performance). The upstart-to-leading labor arbitrage-based firms (mostly India-centric) now face attack from automation solutions that threaten their core value levers. The landscape is anything but static.

Meanwhile, customers thirst for more flexible, agile service solutions, embracing pricing constructions that align their spending with consumption and often accelerate value capture by orders of magnitude.

 

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