AI is already shaping the not-so-distant future of technology services firms. In our recent blog, Technology Services Firms Can’t Afford to Get AI Wrong, we highlighted why AI is so disruptive in the services realm, and how firms can approach this new territory based on what we’re seeing in the field. Today we’re supplementing that with some primary research on where service firms are in their AI journey.
We fielded this research earlier this summer as part of our Tercera 30 initiative. The Tercera 30 profiles the top entrenched and emerging cloud software ecosystems around which to build a growing professional services business. For this year’s report (out in early September) we conducted an online survey of 50+ senior executives from services firms that play within the Tercera 30 ecosystems we called out in last year’s report. Within this survey, we asked a number of questions about how these firms are leveraging AI today, and which software vendors they believe are best poised to lead in AI over the next few years.
Here’s what we learned:
1. The fastest growing technology services firms believe AI is critical to their business strategy.
We asked firm leaders to rate the criticality of AI to their business strategy on a scale of zero to 10, with zero representing not critical at all and 10 representing THE most critical factor. The majority of respondents (54%) indicate that AI is a key factor in moving their businesses ahead, giving the technology an importance rating of seven or higher. But perhaps most interesting, among the fastest growing companies in the survey, the proportion of respondents that view AI as at least somewhat critical climbs to 73%. Overall, 16% of respondents assigned AI a top priority rating of 9 or 10.
2. Firms are equally using AI to improve their own productivity and to assist clients, but it’s still early.
Like any disruptive technology, technology services firms need to get comfortable using AI internally before they can advise clients on how to use it. So, we were pleased to see that is where most of them are focusing their attention right now: 43% of respondents say they are leveraging AI to create efficiencies and scale by putting it to work for tasks such as creating marketing content and, to a lesser degree, writing code. A handful of companies are also using AI to support DevOps or sales activity.
Nearly as many respondents (41%) are already helping clients incorporate AI into products, services, and operations. Much of this work is focused on improving customer service and reducing costs. While some firms are focused on providing AI consulting, planning and roadmaps, others are developing thought leadership to build demand for future AI services.
However, what might be most telling is how many people skipped this question: more than 30% didn’t provide a response.
3. OpenAI dominates AI right now, but hyperscalers are expected to take the lead.
AI played an important theme throughout our 2023 Tercera 30 analysis. Every single software company on our list had AI announcements or plans in their roadmap, with some completely repositioning their companies around AI. A few of the new names on this year’s list are entirely focused on AI. (Spoiler alert: OpenAI made the cut).
Among our survey respondents, OpenAI not surprisingly topped the list when asked which software companies are leading the charge in AI today – outranking all of the hyperscalers.
However, what’s more interesting is how that’s expected to play out in the next five years. When asked which companies will lead in AI in 2028, the top three hyperscalers pull ahead of OpenAI, with Google at the top of the list and Microsoft a close second. We don’t believe there will be one winner in this space, but it’s clear the hyperscalers are going to play a central role here.
Perceived Current and Future AI Leaders
The software vendors who hold the data will benefit the most from the push for AI.
Without a doubt, a lot is going to change in the AI space over the next months and years, and there will be clear winners and losers. From our perspective, the software companies who are richest in data — and the services partners who work alongside them – are those best positioned in this space.
Software companies in other categories, such as low-code development and Robotic Process Automation (RPA), as well as more functionally-oriented areas like RevTech and document management, are going to have to reinvent themselves and find ways to capitalize on the trend. From the data we collected in our Tercera 30 analysis, some are doing this better than others.
As the story continues to unfold, we will be watching all these ecosystems with an eye toward where and how technology services partners can best advance the agenda. Stay tuned for more insights to come.