Dive Brief:
- Wipro will spend $70.8 million for select customer contracts from California-headquartered technology consulting firm Alpha Net Group to expand its AI business, the India-based IT services provider disclosed in a Bank Secrecy Act filing with the U.S. Department of the Treasury Wednesday. The transaction is expected to close June 30.
- The acquisition will give the company “access to certain key clientele, the customer contracts, as well as the related workforce, which will augment Wipro’s existing AI-powered and consulting-led application services capabilities,” Wipro said in the filing.
- The contracts acquired by Wipro yielded nearly $100 million in revenue in the last three years, according to the documentation. In fiscal year 2025, Alpha Net Group reported $29.9 million from the customer cluster involved in the pending transaction.
Dive Insight:
Wipro is banking on AI consulting to reenergize its sluggish IT services business, which saw revenues decline 0.2% year over year to $2.65 billion in constant currency during the three months ended March 31. For fiscal year 2026, IT services revenue fell 1.6% to $10.5 billion, Wipro CEO and Managing Director Srini Pallia said during a Q4 2026 earnings call Thursday.
“Geopolitical and policy disruptions have become the new normal,” said Pallia. “Client priorities are shifting with spending decisions increasingly tied to outcomes. At Wipro, we continue to make decisive investments to navigate the AI-first world.”
Wipro’s situation reflects a broader and somewhat paradoxical industry trend. As global technology spending stays on track to surpass $6 trillion this year, with IT services leading the charge, the channel’s share of the spoils is shrinking. A recent Kaseya survey found that the number of businesses spending $25,000 or more on managed service providers annually fell to 41% last year, down from 75% in 2024.
AI is central to the narrative, posing an existential threat to the IT services business model while promising to unlock future revenue streams as customers tap consultants to help guide adoption. Either way, traditional roles are breaking down, according to Futurum Group VP and Practice Lead Alex Smith.
“The structural logic of the consulting industry operated on a simple leverage ratio for three decades,” Smith told Channel Dive via email. “A narrow apex of senior partners sold engagements. A wide base of junior analysts delivered them, billing thousands of hours on tasks that were fundamentally mechanical: data gathering, process mapping, report generation, requirements documentation. The margin lived in that base.”
Automation is eating into that base as agentic tools tackle workflows once delegated to entry-level consultants. “The junior bench is no longer an asset,” said Smith. “It is a cost structure that the most capable partners are looking to manage out.”
The Alpha Net contracts deepen a consulting bench Wipro built through multiple acquisitions, including the $1.45 billion acquisition of Capco in 2021.
“Capco is a tip of the spear for the consulting piece,” Pallia said Thursday, noting the unit had one of the highest revenues in several quarters.
While consulting is a linchpin of Wipro’s AI strategy, the company branched out earlier this month with the rollout of an AI platform unit to complement the services division. The unit will house several Wipro AI platforms that target lending, aviation, healthcare, telco and other industry verticals.
“As intelligence becomes industrialized and widely accessible, we are making a deliberate strategic pivot to stay ahead,” Pallia said. “This unit will operate with dedicated leadership, focused investments and a distinct operating model to accelerate enterprise-grade agentic AI solutions. This unit will also incubate new AI-led businesses through an invest-build-partner approach, in addition to collaborating with Wipro Ventures and our partner ecosystems.”
