OCT-DEC 2026
The Price of Intelligence
What happens to the rate card when the work gets cheap
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The Price of Intelligence
For decades, IT consulting was a people business dressed up as a technology business. The real product wasn't software, or strategy, or even transformation. It was mobilisation — hunting scarce skills, clearing legal and procurement hurdles, onboarding engineers across geographies. That took weeks, and the client paid for every hour of it.
The Same Work for 30% Less: Anatomy of the Client Ask
Clients are asking IT services providers for the same scope of work at 25% to 30% below previous rates, on the reasoning that AI has lowered the provider's cost of delivering it. The request is usually reasonable on its own terms. What determines the outcome is whether the provider arrives with an alternative commercial construct or only with a defence of the existing one.
Designing the Unit of Value: What Exactly Are You Selling Now?
The unit of value is the thing a client actually buys and the thing an invoice counts. In a time-and-materials contract it is a person-month. Once that unit stops making sense, choosing its replacement becomes the hardest commercial decision a services firm makes, because every other term in the contract is derived from it.
Gain-Share Without Giving Away the Firm
Gain-share pricing pays a provider a share of the value its work creates rather than a fee for the effort it expends. It is the most commercially attractive of the new structures and the one most capable of damaging a mid-sized firm, because the upside is capped by the deal while the downside is capped only by the balance sheet.
When the Contract Moves Faster Than the Cost Base
Outcome-based pricing makes revenue variable while a permanent delivery bench keeps cost fixed, and the gap between those two facts is where margin disappears. This is the structural problem underneath the entire pricing transition, and it is more consequential for a mid-sized firm than any individual contract term.
Who Owns the Number?
Once a services contract pays against a business metric, the provider becomes exposed to everything that moves that metric, including decisions made entirely inside the client organisation. Defining which part of the number the provider owns is not a legal formality; it is what separates a contract that can be delivered from one that cannot.
Pricing Changes What You Hire For
Hiring built for time-and-materials optimises for utilisation: fill seats, keep them billable, grow headcount with revenue. Hiring built for outcome-based delivery optimises for hitting a number. Those two objectives produce different team shapes, different seniority mixes and a different tolerance for capability the firm cannot deploy quickly, and the second one is considerably harder to run.
After the Reset: Indian IT Services on the Other Side of the Rate Card
Five predictions about Indian IT services by the end of 2028, each stated specifically enough to be graded later, and each paired with the evidence that would prove it wrong. Predictions without a falsifier are press releases, so this edition closes by attaching one to each.
