A more cautious outlook on the demand environment for the IT services sector in 2025 was conveyed by Piper Sandler on Monday.

Analysts said during the company's 19th India IT Services tour that the fast evolving landscape brought about by automation, artificial intelligence, and new business models is anticipated to put pressure on corporate growth rates. This prediction comes as market leader Accenture, which has a considerable market value of $191 billion, posted a mild 4.1% increase in sales over the previous 12 months.

The tour included discussions with former Infosys executives, representatives from private firms like Photon, and top executives from a range of organizations, including Globant, EPAM, and Mphasis. Additionally, advisors from Zinnov and Deloitte were contacted, offering a thorough understanding of the potential and problems facing the sector.

The IT services industry is struggling with a changing regulatory and tariff landscape, according to analysts, which might cause cautious investment and postponed decision-making. This tendency is not exclusive to the US; Piper Sandler noted that policy-related economic uncertainty was driving a greater degree of caution in foreign markets including Argentina, India, and France.

The company determined who may benefit and who might face difficulties as a result of AI's influence on the sector. Businesses that specialize in engineering and digital transformation, including Accenture, Globant, and EPAM, are thought to gain from AI projects and utilize AI to enhance customer value. Additionally well-positioned are mid-tier organizations with strong client relationships and specialized knowledge, as well as firms like Accenture that incorporate powerful AI capabilities into their consulting activities.