The Neovay view
AI native shift – Why service firms must transform or become obsolete
By Neovay / February 17, 2026
AI Is Not an Experiment. It’s the Business Model Shift.
Over the last year, AI has moved from hype to inevitability. Yet despite boardroom conversations, pilot programs, and investor slides, very few tech-services firms have fundamentally changed how they operate. The real risk isn’t that AI is overhyped — it’s that leadership teams are underestimating how quickly AI-native business models will reshape the industry.
Awareness is no longer the issue. Inertia is.
The Signals Are Already Clear
Shareholders are asking harder questions. In 2025, over 80% of public tech companies fielded AI-related questions on earnings calls. AI is now a credibility test for leadership.
Talent is voting with its feet. India alone saw 90 new GCCs launch in 2025, adding ~450,000 roles focused on AI, data, and engineering, mostof it drawn from services firms. At the same time, senior leaders are leaving to build AI-native ventures.
Procurement pressure is rising. Renewals are coming at 20–30% lower price points. Clients are asking a simple question: If AI improves productivity, why should we pay the same? Firms that fail to structurally protect margins will see them compress.
Competition has changed. The next competitor may not be another SI, it but a 40-person start-up with a sharper AI-native offering. “Services-as-a-Software” is levelling the playing field, where IP, speed, and outcomes matter more than scale.
Meanwhile, market leaders are making balance-sheet commitments and not running experiments.
What’s Really Holding Firms Back?
Across the industry, the blockers are predictable:
Risk aversion: Leaders hesitate to disrupt a model that still “works,” fearing a missed quarter. The result? Small, safe bets that don’t change trajectory.
Bureaucracy: AI rewards speed and iteration. Most firms reward consensus and delay. By the time initiatives are approved, the market has moved on.
Shallow fluency at the top: Delegating AI to the CTO creates incremental strategies. Without first-hand immersion, leadership underestimates how AI collapses cost curves and enables new revenue models.
This inertia shows up in outdated org structures, superficial board narratives, headcount-led sales motions, time-and-material pricing, and “AI-infused” offerings that don’t truly rewire delivery.