Technology companies are at a pivotal moment, and the landscape is evolving faster than ever. Driven by advancements in cloud computing, artificial intelligence, and automation—these shifts are changing how businesses operate and redefining customer expectations. Instead of one-time purchases, customers now demand ongoing service, expertise, and value.

To stay competitive and profitable, technology services providers must undergo three fundamental transformations: offer, revenue, and delivery. Each shift presents challenges, and while history shows that about 80% of transformation efforts fail, failure isn’t inevitable. Your company can accelerate its evolution and build a sustainable, future-ready business following a proven framework.

This blog provides a roadmap for success based on insights from The State of Technology Services 2025 report. The future of technology services is being shaped now. Are you ready to lead the transformation? Let’s dive in.

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The Rise of Services in the Technology Industry

The technology industry has fundamentally shifted, redefining how companies generate revenue. A decade ago, products dominated the market, making up nearly two-thirds of industry revenue. Today, the script is flipped—with services now accounting for the majority two-thirds of revenue.

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This transformation isn’t just a trend—it’s a clear signal that services are becoming the backbone of the technology sector. Data from the TSIA Technology and Services 50 Index illustrates this evolution, showing companies moving away from product-driven business models toward services-led growth.

What’s Driving This Shift?

TSIA’s research reveals that the most significant revenue growth is coming from three key areas:

• Managed services: Helping customers maintain, optimize, and operate technology investments.
• Professional services: Providing expertise and implementation support for complex technology solutions.
• XaaS (Anything-as-a-Service): Subscription-based models that deliver continuous value, including SaaS (Software-as-a-Service).

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With services now being the dominant revenue driver, one thing is clear: technology companies must embrace a services-first mindset to stay competitive. But this transition isn’t just about expanding service offerings—it requires mastering three critical transformations: offer, revenue, and delivery transformation. The question isn’t whether companies need to evolve—it’s whether they’re ready to execute the shifts and refinements necessary to thrive in a services-led future.

Mastering Transformation: The Three Pillars of Success in Technology Services

The shift toward a services-first economy means technology companies must evolve—or risk falling behind. Transformation, however, goes beyond recognizing the need for change; it’s about executing the right strategies to ensure sustainable growth.

To succeed, companies must master three essential transformations:

• Getting the offer right: Designing services that truly deliver value.
• Selling value-based services: Moving beyond features and selling outcomes.
• Scaling digital delivery operations: Using AI and automation to improve efficiency and profitability.

These transformations are critical for building a competitive, services-led business model. Let’s break them down.

Transformation 1: Designing Offers That Deliver Real Value

Customers want outcomes, not features. Yet many companies still design their services around internal capabilities rather than customer needs. A value-driven approach is the key to profitable, scalable service offerings.

According to TSIA research, the most effective technology services providers treat offer design like product management, ensuring that every service is built around value realization rather than just functionality.

A successful service-led go-to-market strategy requires:

• Technology and services alignment: Defining the complete solution, including technology and services, to achieve the intended outcome.
• Go-to-market strategy: Ensuring sales and partner enablement are built into the offer’s design.
• Scalable service delivery: Creating a digital-first delivery model that ensures profitability and customer satisfaction.
• Consumption and value monitoring: Establishing precise methods for tracking how customers use and benefit from the service.
• Customer success playbook: Equipping success teams with a standardized approach for driving adoption, expansion, and renewal.
• End-to-end business operations: Defining every operational element needed to support the service throughout its lifecycle.

When these elements work together, they form a high-value offer that meets customer needs and drives recurring revenue and long-term loyalty.

Related: From Cost-Plus to Value-Based

Transformation 2: Selling Value, Not Features

Traditional sales approaches are no longer practical. Selling features and functionality may address what customers think they want, but they don’t always align with what they need to achieve business success.

A massive 92% of senior sales leaders agree that companies must shift to an outcome-driven customer engagement model to win in today's market. This means:

• Establishing the service strategy: Understanding the customer’s challenges, desired outcomes, and operational gaps.
• Designing the right solution: Prescribing the best service package based on business needs and financial preferences.
• Ensuring a seamless transition: Implementing the service with structured onboarding, customer success activation, and education.
• Optimizing service operations: Moving from reactive support to an entirely operated, proactive model.
• Driving continuous improvement: Using customer feedback and analytics to improve service over time.

This prescriptive approach ensures customers buy solutions that advance their businesses—not just what they initially think they need. It also helps technology providers create stickier, more profitable customer relationships.

Related: Elements of Value in Technology Service Offers

Transformation 3: Scaling Digital Delivery With AI and Automation

Service delivery is at the heart of customer experience. But manual, resource-intensive operations can’t keep up with growing customer demands. The future belongs to companies that embrace AI-driven, automated service delivery. Unfortunately, many organizations lack the foundational architecture needed to make this shift.

TSIA outlines a progressive path to digital operations with the Digital Operations Evolution Framework, with key stages including:

• Resource-intensive operations: Relying heavily on human effort, making scaling difficult.
• Basic automation: Using event filtering and correlation to improve efficiency.
• Service-oriented architectures: Establishing foundational orchestration to streamline operations.
• Automated discovery and mapping: Enhancing visibility and control over technology environments.
• Robotic process automation (RPA): Automating routine tasks for greater agility.
• Data-driven decision making: Leveraging analytics to optimize performance.
• Predictive intervention: Using AI to anticipate and resolve issues before they impact operations.
• Cognitive service orchestration: The ultimate goal is self-healing, AI-driven service operations that maximize efficiency and customer satisfaction.

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Companies that successfully transition to cognitive service orchestration gain a competitive edge by:

• Reducing operational costs while improving service uptime.
• Delivering proactive, personalized customer experiences.
• Maximizing profitability through scalable, AI-driven service models.

The shift to automated, intelligent service delivery is no longer optional—it’s essential for staying relevant in the evolving technology landscape. Technology companies that master these three transformations—offer design, value-based selling, and scalable delivery—will lead the industry's future.

The question remains: Is your organization prepared to make the shift? By following a proven framework and leveraging data-driven insights, you can navigate this transformation successfully and unlock long-term revenue growth in a services-first world.

The Future of Technology Services: Are You Ready?

The technology services industry has undergone a dramatic shift that demands a new approach to growth and profitability. Companies that adapt and master these three transformations will lead the way:

• Getting the offer right: Designing service-led solutions that align with customer outcomes.
• Selling value-based services: Moving beyond feature selling to a prescriptive, outcome-driven sales approach.
• Scaling digital delivery operations: Leveraging AI and automation to improve efficiency, reduce costs, and enhance customer experiences.

Technology service providers that take action now will gain a competitive edge, drive sustained revenue growth, and build stronger customer relationships. Are you ready to lead the transformation?

Related: Getting the Offer Right with Generative AI

Your Key Takeaways

• The industry is now services-led: Customers expect ongoing value rather than one-time product purchases.
• Value engineering is critical: Your offers must help customers achieve fundamental business objectives—not just deliver features.
• Selling services requires a new approach: Success depends on outcome-based selling, not traditional product-based sales tactics.‍
• AI-powered service delivery is non-negotiable: Companies that fail to automate and optimize operations will struggle to scale profitably.