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Mergers and Acquisitions Are Becoming IT’s Next Growth Play
IT services companies build software and tech for other businesses. For these companies, the fastest way to grow is now buying other companies. A merger is when two companies join into one. An acquisition is when one company buys another.
AI is changing the tech world fast. AI (artificial intelligence) is computer software that can learn and do tasks people used to do. So IT firms now buy companies that already have the right skills. This is faster than slowly training their own staff. Clients are also spending less. So the new rule is simple: “buy, don’t build.”
Why IT firms are buying, not building
Two things are causing this change. First, many big companies are cutting their “discretionary” tech spending. That means the nice-to-have projects they can put off for later.
Second, AI can now do jobs that once needed big teams of engineers. So IT firms win less new work the old way. Buying a company that already has hot skills and customers is the quicker path.
Accenture sets the pace
Accenture is a huge global consulting company. It helps other businesses with tech and advice. It shows this trend clearly. It raised its budget for buying companies in FY26 (its money year that ends in 2026) to about $9 billion. Earlier the target was just $5 billion.
The company says the deals it has already announced will add nearly 2% of its FY27 revenue. Revenue means the total money a company brings in. In plain words, Accenture is spending a lot of money to buy growth.
Look at what Accenture recently bought, and you can see where demand is going. It bought cybersecurity firms runZero, NetRise and Dragos. Cybersecurity means keeping computers and data safe from hackers. It also bought an applied-AI startup called Faculty, a network-intelligence company called Ookla, an industrial consulting firm called Industries eXcellence Group, a creator agency called Whalar, and a cloud-software specialist called Avanseus.
These cover cybersecurity, operational-technology security (protecting machines and factory systems), industrial AI, network intelligence, and the creator economy (people who make money from online videos and posts). Companies are expected to spend more in these areas as AI goes from small tests to big real-world use.
Indian IT follows, on a smaller scale
Indian IT companies are doing the same thing, but with smaller amounts of money. Infosys bought a healthcare-technology firm called Optimum Healthcare IT for $465 million. It also bought a technology-solutions provider called Stratus for $95 million earlier this year.
HCLTech has also been buying firms to add new skills. The goal is the same for all of them: get special skills quickly, instead of building them one new hire at a time.
Key facts at a glance
| Accenture FY26 acquisition budget | ~$9 billion (up from $5 billion) |
| Expected deal contribution to FY27 revenue | ~2% |
| Infosys – Optimum Healthcare IT | $465 million |
| Infosys – Stratus | $95 million |
| Hot areas being bought | Cybersecurity, industrial AI, network intelligence, creator economy |
The risks of buying growth
Buying companies is fast. But it is not safe and easy. Buying a company can cost a lot. If a firm pays too much, its profits can suffer for years.
Joining two firms is also hard. They may have different cultures, tools and pay levels. All of these must be mixed together. Many deals do not give the gains they promised on paper. This is because the two sides never truly become one team.
There is also a people side to this. Growth now comes from buying small AI and cybersecurity firms. It comes less from big outsourcing contracts. Outsourcing means hiring an outside company to do work for you. So IT firms may hire fewer beginner engineers and more experts. For India’s huge IT workforce, this means new skills in AI, security and data will matter more than ever to keep your job.
Why it matters (especially for India and founders)
India’s big IT companies employ millions of people. They earn most of their money from other countries. Growth now comes from buying firms, not from big new outsourcing contracts. This changes how they hire and where their profits come from. It also shows that owning rare AI and cybersecurity skills is now very valuable.
For founders, this is good news. A founder is a person who starts a company. If you build a sharp, special product, a big IT firm might want to buy you. This is even more true in AI security or industrial AI. So getting bought is now a real way to exit. An exit is when founders sell their company and cash out. It is not just an IPO. An IPO (the first time a company sells its shares to the public) is the other common way to exit. The downside: the same AI wave that creates these deals also creates new dangers. You can see this in the rise of prompt-injection attacks on enterprise AI. (A prompt-injection attack is when someone tricks an AI with hidden instructions to make it do the wrong thing.)
FAQ
What does “discretionary spending” mean?
It is spending that a company can choose to delay or skip. These are the optional projects. When money is tight, clients cut these first. This hurts the money that IT services firms earn.
Why buy a company instead of hiring people?
Buying gives you instant skills, products and customers. Hiring and training a team for a brand-new skill can take years. In a fast AI race, speed often wins. A ready-made team with proven clients is worth paying for.
What is “inorganic growth”?
Inorganic growth is growth that comes from buying other companies. It does not come from selling more of your own products or winning new contracts. The opposite is “organic growth”, which a firm builds on its own. The new trend in IT clearly leans toward the inorganic kind. Clients are slow to sign big new deals. And AI is changing demand so fast that buying skills is simply quicker than building them.
The takeaway
AI is changing what clients want. So IT firms are reaching for their cheque books. From Accenture’s $9 billion fund to Infosys’s careful buys, mergers and acquisitions are becoming the industry’s fastest way to grow. They are also a fresh way for smart startups to exit.
Source: Financial Express.
