Firms that sell hours, seats, and words rebuild around AI as clients cut spending on people

How the business works

Four kinds of firm sell people's time by the hour, the seat, or the word

The leaders on our list run four kinds of business that outsiders often lump together as "IT services" or "outsourcing." They share one feature: most of their revenue is a markup on people's time, sold by the hour, the agent seat, or the word, and AI makes each of those units cheaper.

Margins are gross profit as a share of revenue at the largest public company in each sub-sector; private firms don't publish theirs.

Resellers earn a thin markup and chase services

A value-added reseller buys hardware and software from makers like Microsoft, Cisco, and Dell, usually through a distributor, and resells it with its own design, setup, and support. SHI, founder-owned and run by Thai Lee, reports $16 billion in yearly sales and more than 7,000 staff. IT Channel Oxygen Insight, a public reseller, saw sales fall 5% in 2025 while its gross margin hit a record, because services earn more than boxes. Insight

Engineering, contact-center, and language firms sell people's time

Engineering firms such as DataArt and MathCo staff projects with engineers and analysts, many in Eastern Europe, Latin America, or India, and bill by the hour or by the project. Contact-center outsourcers price per agent or per hour. Translation companies route work through freelance linguists and price per word: 91% of language companies still do, by the count of Slator, a language-industry research firm. Slator The language business is the most fragmented of the four: the ten largest firms hold 9.9% of a $72.6 billion market, according to the research firm Nimdzi. Nimdzi

The economics in 2026

Clients spend record sums on AI infrastructure and less on the people these firms sell

The government's monthly jobs count shows the same turn. Employment at firms that design and run computer systems grew through the pandemic, peaked in March 2023, and has fallen since.

Three pressures sit under the numbers:

• Clients want AI's savings in the price. Indian IT firms' clients are asking for 25% to 30% lower prices for the same work, Reuters reported in August 2026. The Star (Reuters) Concentrix's CEO says the company is "aggressively disrupting our own traditional business." Concentrix
• Washington is changing who can do the work. The president extended a $100,000 fee on new H-1B visa petitions to September 2027, but courts have blocked its collection while the government appeals. Fragomen The Federal Communications Commission (FCC) has proposed capping the share of calls telecom companies send offshore. Federal Register
• Federal buyers are going direct. The General Services Administration (GSA) now negotiates government-wide deals with software makers through its OneGov program and asked resellers in January 2026 to justify their markups. FedScoop Wiley

What is changing

IT, outsourcing, and language firms are changing how the work gets done in five ways

The biggest shift is what these firms own. A firm that rents out people's time earns less when AI does more of the work. The leaders furthest along are building or buying the software that does the work, and changing their firms' shape to sell it.

From 2023 to 2026, the firms changing most are doing one or more of five things. The first three match the three groups of leaders on our list, and each cuts across all four kinds of firm.

The innovators

Eight leaders on our list are rebuilding firms that sell people's time

Eight IT, outsourcing, and language leaders are among The Originals. Most run firms their founders still control, and each has made a dated, costly change to how the work is done. The highest scorers are Phil Shawe of TransPerfect (7.0), Eugene Goland of DataArt (6.8), and Thai Lee of SHI (6.1).

Building their own AI

Eugene GolandOn the list · 6.8 of 10

Co-founder and CEO, DataArt · New York; software engineering firm founded in 1997 with more than 6,000 people in 20+ countries; outside investors, including FTV Capital, hold minority stakes

Eugene committed $100 million over three years to data and AI in June 2025, aiming to put AI tools in every employee's hands. In February 2026 he launched Artisyn, which DataArt calls its AI-enabled operating model for delivery. He also bought ACL Tech in Chile in 2025, adding more than 500 people. DataArt

“We're not just updating our offerings. We're reshaping how we deliver, how we grow, and how we support our people and our clients through the next phase of this industry.” source

Ask aboutWho keeps the gain when Artisyn makes a team faster: the client, through lower prices, or DataArt, as margin.

Sayandeb BanerjeeOn the list · 4.4 of 10

Co-founder and CEO, MathCo · Chicago; analytics and AI services firm founded in 2016, with most of its staff in India

Sayandeb moved MathCo to what it calls an AI-native model in September 2026, creating more than 2,000 specialized AI roles, including forward-deployed engineers who work inside client businesses. The new model builds on MathCo's own platform, NucliOS. MathCo

“Transforming into an AI-native organization is about fundamentally rethinking how businesses operate, solve problems, and create using AI.” source

Ask aboutWhen a forward-deployed engineer replaces a team of analysts, whether the client still pays for effort or for decisions.

D. RajaOn the list · 3.7 of 10

Co-founder and Chairman, CEI · Pittsburgh; IT services firm founded in 1992 as Computer Enterprises, Inc.; Sunil Senan has been its CEO since April 2026

Raja repositioned CEI from traditional IT services to building and running AI systems in March 2026, moving it to the cei.ai name and hiring new sales and marketing chiefs. Nine days later he handed the CEO job to Sunil Senan, who had led data, analytics, and AI at Infosys. CEI

“Incremental change was never going to be sufficient for our clients or for us.” source

Ask aboutWhich decisions he kept as chairman, and what would tell him the AI-first bet hasn't worked.

Owning products instead of renting out people

Thai LeeOn the list · 6.1 of 10

President and CEO, SHI International · Somerset, New Jersey; founder-owned IT reseller with $16 billion in 2025 revenue and more than 7,000 people; she has led it since 1989

Thai is moving SHI from reselling licenses to delivering AI programs. She launched Stratascale, a consulting unit for the largest accounts, in late 2020, bought the Indian managed-services firm Locuz in 2024, opened AI & Cyber Labs in New Jersey in April 2025, and invested in the AI engineering firm NStarX in October 2025. IT Channel Oxygen

“The introduction of SHI's AI & Cyber Labs will empower many organizations to bring both clarity and speed to their AI efforts, helping them identify use cases with strong ROI and the best way to achieve the shortest time to value,” source

Ask aboutHow SHI is changing what its sellers are paid for, so they sell lab and AI work as well as the next renewal.

Anil SharmaOn the list · 5.2 of 10

CEO, 22nd Century Technologies · McLean, Virginia; federal IT services firm with more than 6,000 people; he says it has grown from $6 million to $600 million in revenue

Anil is turning a firm that billed for people into one that also owns products. He bought QED, a public-safety software maker used by 340 agencies, in 2023, added the treasury-software specialist TreasurySoft in 2024, and in January 2026 bought BT Group's US federal arm, now the subsidiary 22nd Century Networks. Washington Technology

“This acquisition is a strategic pivot towards building and growing a product-centric organization that complements our existing services,” source

Ask aboutThree years after QED, what share of profit comes from software the firm owns rather than billable people.

Splitting and reshaping the firm

Phil ShaweOn the list · 7.0 of 10

President and Co-CEO, TransPerfect · New York; co-founded in 1992 and owned by him since a 2018 buyout; the largest language company by revenue, $1.32 billion in 2025

Phil is moving TransPerfect beyond translation. In 2025 he made ten acquisitions, including Technicolor's games unit, MPC's and The Mill's French studios, and the language-AI company Unbabel. Language services fell below half of revenue for the first time. Slator He says he would rather cannibalize the firm's own translation work with AI than let a rival do it. Slator

“Technicolor is a renowned brand and this division has an impressive track record of producing stunning creative work.” source

Ask aboutWhich business he had to shrink fastest as AI took on more translation work, and where those people went.

Paul CarrOn the list · 5.5 of 10

CEO, Welo Global · New York; localization company, formerly Welocalize, with more than 2,000 clients and a network of linguists

Paul reorganized Welocalize around client segments, each run by a general manager with its own delivery, product, and technology teams. In April 2026 he relaunched it as Welo Global, the parent of five brands including Welo Data and Welo Life Sciences. In December 2025 he agreed to build the firm's agentic AI platform, Opal, into the translation software maker Phrase. Marketing Dive

“A single brand built around localization no longer reflects our business or our direction.” source

Ask aboutWhat he took away from the central delivery team to give each general manager real control, and what that cost in efficiency.

Anthony MarloweOn the list · 4.9 of 10

Founder and CEO, MCI · Manalapan, Florida; contact-center outsourcer founded in 2003 with more than 4,000 people; he controls it through his own investment company

Anthony split MCI in two in November 2025: a human outsourcing business, MCI BPO, and an AI-native division, AiCX.com, that sells AI agents and small language models. He hired a former Federal Emergency Management Agency executive, Mark Misczak, as president to run the split. Before that he grew by buying contact centers others had closed, rehiring their staff. MCI

“AI stealth mode is over; wish us luck,” source

Ask aboutHow he keeps AiCX and MCI BPO from fighting over the same client, and who decides when a human seat gets replaced.

Four leaders outside the list are making similar moves

Each of these four leaders has made a change worth asking about.

The wider field

Public giants and AI start-ups set the prices these firms compete against

A few large firms and fast-growing software companies shape what the leaders above can charge. They set the going price for engineers, agents, and words.

Large firms

• Concentrix The largest US-listed contact-center outsourcer; revenue fell in Q3 2026 and it wrote down $1.05 billion of goodwill.
• Globant A public engineering firm whose headcount fell from 30,084 to 27,411 in a year as it sells AI subscriptions.
• RWS The largest public translation company; revenue fell 4% in its 2025 year and staff fell from 8,059 to 7,649.
• Propio An interpreting company backed by private equity that bought its rival CyraCom in 2025.

Companies selling the tools

• Sierra Sells AI customer-service agents and charges only when a problem is resolved; reached $100 million in annual revenue in under two years.
• Decagon AI customer-service agents; raised $131 million at a $1.5 billion valuation in June 2025.
• Cognition Makes Devin, an AI software engineer; raised $400 million at a $10.2 billion valuation in September 2025.
• DeepL Machine translation used by many corporate buyers; launched an AI agent in September 2025.

How clients find a firm

Advisers, software makers, and purchasing programs stand between these firms and their clients

In these businesses the client rarely finds a firm on its own. Large buyers hire sourcing advisers to run the contest; software makers decide which resellers get the best prices; and public buyers buy through contracts that charge the seller a fee on every sale. The map shows who pays whom.

Software makers decide who earns the most

Microsoft said in 2019 that almost all of its commercial cloud revenue, about 95%, was sold through partners. GeekWire Since October 2025, a partner needs $1 million a year in cloud sales to bill Microsoft directly, which pushes smaller ones to buy through distributors such as Pax8, TD SYNNEX, and Ingram Micro. TechPartner News Amazon Web Services cut its marketplace fee on consulting deals to 0.5% in June 2026, so clients can pay a services firm out of money they've already committed to AWS. CRN Australia

Purchasing programs charge the seller, not the buyer

Public buyers save time by buying from contracts someone else has already competed. The seller pays a fee on every sale, built into the price:

Advisers and staffing programs squeeze the price

Big outsourcing contracts are often run by sourcing advisers such as ISG and Everest Group, paid by the buyer. Provider executives have long said they prefer deals without an adviser, because advisers push prices down and standardize terms. Horses for Sources Companies that hire many IT contractors buy them through a managed service provider and its software, and the supplier often pays a fee of about 2% on every billed hour. Beeline

Four leaders run the main channels

Scott Chasin and Patrick Zammit run two of the distributors between software makers and resellers. Michael Connors and Jimit Arora run the two sourcing advisers most often hired when large clients pick an outsourcer.

Scott Chasin

CEO, Pax8 · Denver; privately held cloud marketplace that sells Microsoft and other software to more than 47,000 IT partners serving small businesses

Scott runs the distributor most small IT firms now buy Microsoft cloud through, especially since Microsoft raised the bar for billing it directly in October 2025. In 2026 Pax8 started selling AI agents through its marketplace and calls its partners "Managed Intelligence Providers."

“With SMBs spending $777 billion on IT services every year, the opportunity ahead for our community is massive.” source

Ask aboutWhich kinds of IT firms are winning with AI agents on Pax8, and which are losing customers to them.

Patrick Zammit

CEO, TD SYNNEX · Public distributor of hardware and software to resellers; CEO since September 2024 after leading its European business

Patrick runs one of the two largest distributors between makers and resellers, at a gross margin of about 7%. Its fastest growth comes from building servers for the largest cloud companies.

“Hardware is becoming a very interesting category again and could be poised for very interesting growth,” source

Ask aboutHow much of a reseller's margin he expects to come from AI hardware over the next two years.

Michael P. Connors

Chairman and CEO, ISG (Information Services Group) · Public sourcing adviser that founded the ISG Index of outsourcing contracts; he founded ISG in 2006

Michael leads the adviser many large companies hire to pick and manage outsourcers. In early 2026 ISG signed the largest contract in its history, up to $17 million to manage $300 million of one client's technology spending across 200 vendors. ISG

Ask aboutWhether ISG earns more now from running contests between outsourcers or from managing them after the deal.

Jimit Arora

CEO, Everest Group · Dallas; privately held research and sourcing adviser; CEO since February 2025, after 20 years at the firm

Jimit leads the firm whose rankings of outsourcers many buyers use to draw up a shortlist. In August 2026 he told Reuters how clients were pressing Indian IT firms on price.

“It's a desperate market for the service providers. The odds are very much in favour of clients.” source

Ask aboutWhat a mid-size, founder-owned firm has to show to make an Everest shortlist against the giants.

Trade-offs

Six trade-offs divide the IT, outsourcing, and language leaders you'll meet

Most leaders on our list have picked a side on several of these. In our reading, asking which side they picked, and why, gets to their strategy faster than asking about trends.

Before a first conversation

These leaders want to talk about pricing, people, and what they own

Leaders across all four businesses face the same question from clients: if AI does part of the work, why pay the old price? Jimit Arora told Reuters in August 2026: "It's a desperate market for the service providers. The odds are very much in favour of clients." The Star (Reuters) The leaders on our list talk about three things: what to own instead of hours, how to price it, and how to train people when AI does the junior work.

Six mistakes mark an outsider

• Calling a reseller a "box pusher." The large resellers earn their margin on services and managed contracts; Insight's gross margin hit a record in 2025 as its sales fell. Insight
• Saying translation is dead. In Slator's 2025 review, 74% of corporate buyers reported stable or rising demand, though the work is moving to machine translation with human review, interpreting, and AI data. Slator
• Assuming outsourcing means offshore. Outsourcers hold about 15% of US contact-center agent jobs, and US site openings continue. ContactBabel via NICE Site Selection
• Predicting that AI will replace their agents next year. Site Selection reports that "the most visible near-term impact is agent augmentation, not agent replacement." Site Selection What they're rebuilding makes a better opening.
• Assuming record AI spending means IT services are booming. The boom is in infrastructure; in the Americas, managed services fell 6% in Q3 2026. ISG via Business Wire
• Stating the H-1B fee as settled. It's in active litigation and changes month to month.

Ten questions get these leaders talking about the work

1. ISG's numbers show managed services shrinking while AI infrastructure doubles. Which of your service lines look like the first, and which like the second?
2. When a client asks for AI's savings to be passed through, how do you decide what to give back and what to keep?
3. Which contracts have you moved off hourly, per-seat, or per-word pricing, and what did you learn about pricing the risk?
4. What does your staffing pyramid look like now compared with three years ago?
5. How are new hires learning the work that juniors used to learn on the job?
6. What does your own AI platform do that a client couldn't get by buying a license from Microsoft or OpenAI?
7. If you split the AI business from the people business, which one would you run yourself?
8. How has the H-1B fee fight changed your plans for where to hire?
9. What do you measure now that you didn't measure two years ago?
10. What do you wish your largest client understood about how you make money?

Where they gather

Seven events bring these leaders together before June 2027

Resellers gather at Microsoft's and Amazon's partner events and at channel shows; contact-center leaders at Customer Contact Week (CCW); localization leaders at LocWorld.

Glossary

26 terms come up in the first ten minutes

ACV

Annual contract value: the yearly value of a contract; ISG tracks the outsourcing market this way.

ADM

Application development and maintenance: the classic outsourced software work.

AHT

Average handle time: how long a contact-center agent spends on one customer, including wrap-up.

Bench

Billable staff not assigned to a client project at the moment.

BPO

Business process outsourcing: running a client's customer service or back-office work.

Containment

The share of customer contacts handled fully by self-service or AI, with no human.

Deal registration

A reseller logs a sales opportunity with the maker to get protected pricing on that deal.

Distributor

The wholesaler between makers and resellers, such as TD SYNNEX, Ingram Micro, or Pax8.

FCR

First contact resolution: the share of issues solved on the first call or chat.

Fixed price

One agreed price for a defined scope, so the firm keeps the savings, or takes the loss.

Forward-deployed engineer

An engineer who works inside the client's business to build and run AI systems there.

GCC

Global capability center: a company's own offshore center doing work it might otherwise outsource.

H-1B

The US visa for skilled foreign workers that IT staffing and services firms use heavily.

LSP

Language service provider: a translation and localization company.

Managed services

The firm runs a function, such as IT infrastructure or security, under a multi-year contract.

MDF

Market development funds: money a maker gives resellers for marketing.

MSP

Managed service provider: a firm that runs clients' IT for a monthly fee. In staffing, also a firm that manages a client's contractors.

MT and MTPE

Machine translation, and machine translation post-editing, where a person corrects the machine's draft.

Nearshore

Delivery from a nearby time zone; for US clients, usually Latin America.

Outcome-based pricing

Fees tied to a measured result, such as tickets resolved, rather than hours worked.

Per-word rate

The standard price unit in translation.

Pyramid

Many juniors under a few seniors: the classic staffing shape of a services firm.

Seat

One contact-center agent position, the traditional unit of contact-center pricing.

T&M

Time and materials: the client pays for hours worked at agreed rates, plus expenses.

Utilization

The share of available hours billed to clients; the main margin lever in a people business.

VAR

Value-added reseller: a firm that resells makers' hardware and software with its own services.

Read more

Three pieces explain AI's pressure on pricing, contact centers, and translation

• AI reshapes India's IT services sector as clients demand more for less (Reuters, via The Star) Why clients want AI's savings in the price, and how outcome-based contracts are spreading.
• Contact Centers and BPO: A Global Industry Navigating Slower Growth and Rapid Change (Site Selection) Where contact-center jobs are moving, onshore and abroad, and what AI is changing first.
• Nimdzi 100, 2026 edition The ranking of the largest language companies, with what AI is doing to their prices.