MUMBAI, NOVEMBER 2026 — YCP has released a new white paper, “The New IT Services Model,” exploring what makes an IT services business harder to replicate as AI changes the economics of the sector.
For two decades, IT services grew on a simple equation of winning work, adding people, and growing revenue. AI is now reducing the effort required to deliver many technology outcomes. Clients are shifting toward outcome-based contracts, and large, long-duration programs are becoming less common. Strategic and financial buyers remain active, but they are increasingly selective about the assets they will pay a premium for.
The white paper argues that scale is no longer sufficient on its own, and that investors need to underwrite the evidence behind a business’s differentiation rather than the claim. It sets out six areas where differentiation can be tested: proprietary IP, vertical depth, ecosystem strength, commercial model, talent, and management. It also explains how the same findings can carry different value for a financial sponsor and a strategic acquirer.
The report draws on recent IT services M&A data, YCP’s transaction and diligence experience, and two recent transactions in which vertical depth and ecosystem strength translated into enterprise value. The median IT services transaction priced at 8.8x EBITDA in the fourth quarter of 2025, while platforms with strong AI, cloud, and recurring-revenue characteristics approach 15x. As that gap widens, so does the cost of misreading differentiation.
“In a management presentation, almost every IT services business will claim proprietary IP, vertical depth, and strategic partnerships. The question for investors is whether the data supports the claim. A partner badge tells you a relationship exists. The pipeline tells you whether it matters,” says Swagata Das Chowdhury, Partner at YCP India.
The white paper is intended for private equity investors, strategic acquirers, and IT services leaders seeking to understand where durable value is being built as the sector’s model changes.
Read and download the full white paper here.
