IT Services providers have long been the thread that weaves new technology into the fabric of companies large and small. Last decade, that meant the (very) long road to the cloud. AI is up next. Accenture’s huge $5 billion in GenAI bookings for Q1 2025 indicates the magnitude of new projects that we expect to soon filter down to the SMB and midmarket - and these companies will need IT Services to deliver them.
AI will of course also disrupt the IT Services space itself - it is highly fragmented and ripe for transformation, and is natural territory for “service-as-a-software”.
We believe AI agents will soon automate full workstreams beyond just enabling them. (We covered this approach in depth in our previous AI Agents piece here). Nvidia co-founder and CEO, Jensen Huang, recently talked about IT becoming the “HR for AI agents”. We agree: as a role for both in-house IT and third-party providers alike.
The opportunity ahead is enormous. We estimate that Europe alone spends €200 billion directly on IT Services, and providers also indirectly influence even more customer spend through distributing and implementing software.
To create our Horizons market map, we spoke with IT Services providers, end-customers, and players in the current software and reseller ecosystem to find out what the innovators and buyers on the ground expect to see happen as AI advances.
A new wave of more sophisticated tooling and AI will unlock radically more profitable operating models. This includes preventing a deluge of tickets, automating security operations, and building custom apps like CRM or ERP integrations. Examples of leading innovators include Primo and Deeploi, who are are rebuilding the full employee IT journey; Way, which is clarifying, triaging, and autonomously resolving IT issues; Qevlar, whose AI SOC analyst reduces the time to remediate alerts dramatically; and Cogna, which helps users discover and define opportunities for software, then deliver them.
We believe IT Services providers will act as a force multiplier for AI and its disruption of all services industries, and start-ups can act as an incredible channel to distribute through providers to end-customers.
The team spoke to IT Services providers, end-customers, and their current software and reseller ecosystem to find out what the innovators and buyers on the ground expect to see happen as AI advances — and the emerging map of European software that will enable this opportunity too. Read their insights into the AI x IT Services opportunity in Europe here.
If you are a founder in this space, we have wider lessons from our research and portfolio company insights. Please do reach out, and we’ll be happy to share more