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The Indian IT services firm is betting that AI-driven productivity gains will reshape how clients negotiate contracts, even as traditional service pricing faces structural deflation.
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Hexaware Technologies CEO R. Srikrishna has laid out a surprisingly candid math problem for the IT services industry: AI can boost productivity by roughly 40%, but clients will only capture about 25-30% of that in lower pricing. The rest, presumably, stays with the firms smart enough to deploy the technology first.
The core argument is straightforward. When AI tools accelerate routine IT work by 40%, clients naturally want to renegotiate their contracts downward. But the reduction they can realistically extract lands in the 25-30% range, not the full 40%. The gap between productivity gains and pricing concessions is where IT services firms plan to protect their margins.
