By Preetam Kumar, Co-founder, Psiog
An entire generation of Indian IT Service Providers undertook the quintessential odyssey, from humble shores and origins to global stature and opulence, earning their spurs navigating the strait of Fortune 500! Back in 2010, NASSCOM’s Annual Strategic Review Report pegged the Indian offshoring industry’s export revenues at around $50B, with the USA contributing nearly 61%. Holding pole position for over 15 years now, the US share remains strong as ever at 62%, even as export revenues have since more than doubled at around $112B, per their 2025 Annual Report. These figures are a surrogate for the Fortune 500’s influence on the Indian IT services industry, given their storied successes with technology-centric outsourcing and offshoring programs.
The period also witnessed an explosion of tech services providers, estimated to be over several thousands, aspiring to replicate the scale and success of India’s Tier 1/2 (service providers with annual revenues > $1B) and mid-tier (annual revenues $100m – $1B) clusters. These elite players, however, remain constantly embroiled in zero-sum combats to wrest coveted Fortune clientele from each other, leaving little to no avenues for lesser mortals to catch a break, much less a breakthrough!
The path to rethinking growth for the IT services industry begins with acumen, appetite and adaptability to look beyond conventional target markets including Fortune 500/1000, Internet Retailers 500 and Forbes 2000. Industry leader Accenture has done just that, with the announcement of Accenture Edge in June 2026. Edge is a business unit formed exclusively to focus on the needs of the “mid-market” segment, characterised by Accenture as companies with annual revenues between $300m and $3B, representing an attractive “$240B market that’s growing fast.”
HCL from the India Tier 1 appears to have followed suit with reports of “Neo.AI”, a business unit set up to “focus exclusively on firms with annual revenues between $1B – 5B.” The interest and urgency around mid-market is not new. This discerning segment represents the final frontier for technology services outsourcing and offshoring. A world where transformation horizons are shorter, tech-spends/budgets operating at a fraction of enterprise thresholds and above all, skepticism around the efficacy of the industry’s famed Global Delivery Model – rather overwhelming and much more widespread than in any other market segment one has encountered.
Additional variables of material significance include a) impact of C-level relationships as opposed to cadence of procurement initiatives; b) influence of CFO/Business Leader(s) involving funding/ prioritisation/autonomy of satellite initiatives vs ideology of CIO/CTO driving centralized IT ecosystem imperatives/ necessities/guardrails and c) implications around program sustenance, arising from lack of user support/adoption.
Industry commentary and degment analysts, all of whom provide contextually relevant commentary on mid-market, represent a comprehensive yet considered canvas, defining this intriguing universe with annual revenues as the basis.
An under-served segment for the longest time, mid-market’s principal entry barrier has been inordinately long sales cycles, which either peter into abeyance or culminate in a scale of business that quite simply does not justify the pursuits and investments. Add the nuances of custom configuring an impactful, sustainable engagement model, and the gravity/magnitude of the challenges across this segment unfolds swiftly! Having encountered these scenarios with predictable regularity over the past several years, it becomes easy to comprehend why there are widespread instances of failed outsourcing/offshoring programs across the mid-market, with a larger contingent of companies content to stay with first-generation outsourcing/offshoring models. That said, the largest sub-segment within the mid-market, companies who have yet to embrace mainstream, multi-generational outsourcing/offshoring global engagement models, hold the key to changing the overall segment narrative.
The elite clusters’ renewed optimism and focus to (re)engage mid-market has been galvanised by the disruptive impact of AI’s rapid infusion into traditional service offerings, even as these clusters excitedly accelerate development and delivery of their productised avatars. Promising tangible, near-term outcomes built on the premise of identifying and orchestrating finite scope. Backed by prudent and predictable pricing, straddling an integrated approach to data, applications, security and infrastructure. This has the ingredients of a winning formula, one that could go on to capture both mind and market share across mid-size enterprises. By the same token, the bespoke services approach for tech-transformation engagements in the mid-market has built a formidable reputation delivering sustained, consistent results, synthesizing just the right blend of customisation and calibration through an engagement lifecycle. Evolving from disparate pilots in siloed settings, requiring purposeful interface with composite groups of stakeholders in a journey that warrants handholding and restraint. Such an experience can only be orchestrated by a cross-competent team with fungible capabilities drawn from solution architects, business-technology analysts, full-stack service delivery specialists and next-gen quality assurance. All within a price point, palatable for mid-market yet commercially viable for a boutique leveraging shared services models.
Mid-market, the opportunity to be served! AI, the asset to be leveraged!!
Time will tell whether the elite clusters breach outsourcing-offshoring’s final frontier or mid-market continues to remain a safe haven for the boutiques! Either way, the winner will be growth for the IT services industry.