Bessemer Venture Partners’ Post

Hello friends! Today we are discussing about technology services industry Here's a simplified explanation of the current state and future opportunities in the technology services industry, especially relevant for India's technology sector: Overview The technology services industry has shifted its focus in 2023 towards efficiency and improving profit margins. Trends like growth in cloud computing, the rise of generative AI, and large-scale deals are evolving. This document will help understand the industry's current state, future trends, and strategies for staying competitive in the changing landscape of technology, customer needs, and market pressures. Key Highlights 1. Customer Segments and Spending:   - There are over 10 different types of customers, making up about 200 companies.   - These companies spend around $300 billion on technology and are increasing their tech spending by 10% each year. 2. High Growth Technology Services:   - Over 20 fast-growing service areas (like cloud computing, enterprise applications, cybersecurity, data analytics, AI, engineering and research & development (ER&D), and customer experience (CX)).   - These services are expected to offer a market opportunity worth over $350 billion. 3. Generative AI:   - By 2027, $150-200 billion in tech spending will be driven by re-imagined and new offerings powered by generative AI.   - New deals are increasingly considering productivity improvements from generative AI, but large-scale implementation is still slow. 4. Large Deals:   - Large deals are growing faster, with a significant increase in multi-service deals.   - However, competition for deal renewals is intense, and there is ongoing pressure on the profit margins of these large deals. 5. Partner Ecosystems:   - Managing partnerships is crucial as their role and contribution to revenue opportunities in services are growing. 6. Mergers and Acquisitions (M&A):   - M&A activity is expected to increase in 2024-25 after a notable decline in the past two years and an expected correction in company valuations. Summary To navigate the future, technology service providers in India need to focus on improving efficiency, leveraging new technologies like generative AI, managing partnerships effectively, and preparing for an increase in M&A activity. These strategies will help them stay competitive and take advantage of growth opportunities in the evolving tech landscape. #India #finance #Nasscom

AI hype is real and kicking! I spent last 2 weeks travelling and meeting enterprises. While there has been a lot more openness regarding software purchase in India, but the bar for successful repeat (retention) is quite high. Some of my learnings so far: 1) SAAS still sees resistance from CIOs (Especially when "only" workflow and good UX is on offer) 😅 2) Decision making cycle has increased (due to well thought Make v/s buy and many "buy" options) 🤔 3) Outcome or service based experiments are still preferred (ties well with above two points) 😑 To top it all, there seems to be a genuine case for redistributing manpower with AI in sight. One of the companies target to move 30% 😮 of their customer support to AI in this year. Still assessing the notes and trying to read between the lines. What is your assessment of #saas sales in India? How are #procuretech leaders looking at this?

The AI alliance Pune chapter will assemble entrepreneurs, ecosystem enablers, policy makers, industry leaders and #innovators to explore the transformative power of Artificial #Intelligence in Pune's key sectors - auto, SaaS, and enterprise software. Have you registered yet? Book your spot now @ https://lnkd.in/dy25CivE

India's business process outsourcing (BPO) industry is arguably one of the most notable success stories the country's had since the liberalization of the economy in the early 90s. While it employs only 0.4% of all jobs, the BPO sector is responsible for 6.5% of India’s GDP and 25% of its exports. Now it faces its sternest test: AI. In this week's Inside India newsletter, Ganesh Rao looks at how AI could reshape the Indian economy. While concerns persist, there are also several pockets of optimism. Sign up to read the newsletter: https://lnkd.in/gk5DDvEd https://lnkd.in/gReqUBJe

Between manufacturing and services, can AI show India a third way to grow?- QHN - https://lnkd.in/d_SjMXt4 By Andy Mukherjee Should India double down on software services, where it has proven prowess and strong outsourcing companies? Or […]

Creating a digital product catalog for micro and small enterprises (MSEs) comes with its own set of challenges, often due to limited resources and capabilities. Here are some challenges specific to MSEs. ✅ Limited Resources: MSEs typically have limited budgets, manpower, and technological infrastructure to create and maintain a comprehensive product catalog. Solution: Opt for AI-enabled catalog tools, leverage online platforms and marketplaces, and consider open-source content management systems. Explore simple digital tools that require minimal training and support regional language with voice-to-text enable features. ✅ Limited Technical Expertise: MSEs lack in-house technical expertise for developing and managing digital catalogs. Solution: Use user-friendly platforms and tools that don't require advanced technical skills. ✅ Data Management Challenges: Maintaining accurate and consistent product information can be challenging, especially when dealing with limited data management capabilities. Solution: Simplify data entry by using standardized templates or voice-to-text enable features. Regularly update information manually or explore automated solutions as the business grows. Prioritize essential product details to minimize data management complexity. ✅ Limited Access to Professional Photography: MSEs may face difficulties in obtaining high-quality images for their products due to budget constraints. Solution: AI-enabled Image creation or using smartphones with good cameras to take pictures and using AI to create variants. AI image enhancers will utilize natural light and simple backgrounds to capture appealing product images. ✅ Customer Engagement and Support: Providing effective customer support and engagement with limited staff can be challenging. Solution: Use chatbots or automated responses to handle common inquiries. Bharavi a Socio-Technological Innovation Platform overcomes all these challenges and gives trust and confidence to SMEs joining the digital e-commerce revolution backed by Open Network For Digital Commerce (ONDC) which presents an unprecedented opportunity to achieve business goals and propel to new heights. Inviting SME’s to be part of nation-building initiatives. Join ONDC network and Go Digital !!! For more details about Bharavi and ONDC, please contact us Faraz Ramish  |  Ayusman Pradhan | Grossky Software Services Open Network For Digital Commerce (ONDC) Google Cloud Nandita Sharma Nitin Mishra T Koshy Dr. Omkar Rai Manoj Kumar Mishra  Protean eGov Technologies OCCIA OASME IPICOL Odisha Department for Promotion of Industry and Internal Trade Startup Odisha Sweden-India Business Council (SIBC) Ministry of Micro, Small and Medium Enterprises, Government of India Ministry of Micro, Small and Medium Enterprises BHASHINI Amitabh Nag

Unpack the Pune AI scene this month! The AI alliance Pune chapter will assemble entrepreneurs, ecosystem enablers, policy makers, industry leaders and innovators to explore the transformative power of Artificial Intelligence in Pune's key sectors - auto, SaaS, and enterprise software. Have you registered yet? Join us for an insightful journey into AI's transformative impact on Pune, on 27th March at 3:00PM. Register now to be part of the AI revolution! Know more @ https://lnkd.in/dwRyeCku Chandra R. Srikanth #AIAlliance

The #GenAI #paradox: Why Indian IT firms ban it while preparing to sell it For #IT #services firms, the priority is #building #use #cases that convince their #clients to #adopt the technology. The likes of #IT giants know that a freely available technology such as #GenAI won’t do much for their relative competitiveness or margins unless they build and sell “#transformative #solutions, which use #GenAI". #AI has existed for a few decades. But the reason why #GenAI is considered to be such a major leap forward is that it has #greatly #democratised #AI for the #general #public and #businesses. Applications that were #limited to #large #companies with years’ worth of #stored #data can now be accessed by even #smaller and #newer companies. #Gupshup - the US-based messaging platform founded in India attributes the expected AI-driven $194-billion bonanza in #global #e-commerce sales this holiday season to #GenAI and #LLMs, which empower #marketers and #retailers to “gain a #better #understanding of their #customers”. A #logistics major, is creating a #GenAI-powered executive assistant for its #CEO. It’s an assistant that can answer how the #company’s #products are performing vis-à-vis its #competitors. An #electricity #service #provider that wants a tool to #automate #customer #inquiry #responses, particularly during #peak #load #periods. As integrators, #IT companies are aware that different clients are at different stages of tech readiness. It is not enough for the technology to be just a #CIO or #CTO’s mandate. For instance, the primary areas in which #HCL is building its projects include #chatbots, #summarisation, #email generation, and #translation. The #customers don’t come up with #use cases for #GenAI. Rather, we have to come up with these solutions for them. Companies must understand #GenAI as a #business tool rather than just a #technological one. It’s like the difference between #cloud and #analytics. #Cloud is purely a #technical solution that allows companies to store large amounts of data. While #cloud #transformation can be done by technology, #analytics requires an understanding of #business and the specific domain. #Data #privacy, after all, is a #key #concern when considering the #use of #GenAI-based #solutions. Companies are tackling these issues differently by exploring a method called retrieval augmented generation (#RAG) to address data privacy and hallucination concerns. #AWS launched #Amazon #Bedrock for custom AI applications, while #Microsoft’s partnership with #OpenAI grants access to #GPT-4 and more through #Azure. #GenAI assists in candidate screening through tailored assessment tests and evaluations based on their work experience. It also streamlines the onboarding of candidates. The #human-#inputted #context will remain the #key #ingredient of #GenAI’s #adoption. #GenAI: shifting from #experimentation to #scalable solutions and taking the tech from the #boardroom to the #operational core.