In the Indian IT industry, the days of billing by headcount and hours are numbered
AI is making people-heavy operations less necessary. Indian IT firms must shift from billing for headcount and hours to pricing technology margins, outcomes, and capabilities that expand what clients can do.
By Vishnu Rajkumar · Marginalia
note · LinkedIn
In the Indian IT industry, the days of billing by headcount and hours are numbered. AI is collapsing the need for people-heavy operations, replacing manual troubleshooting, remediation, and management with systems that run lighter and smarter. On top of this, technology-first design means infrastructure itself demands less maintenance.
This creates a new cost equation. Human labor is no longer the anchor but technology is. The pricing model of the future should reflect this shift. Instead of selling bodies and hours, firms must build in technology margin; the value added by proprietary AI, automation, and platform intelligence that sits on top of raw token cost. The deep tech builds deep LLM capabilities, the value added providers charge a margin on the 'enhancement' done to the tokens. The customers pay for outcomes like never before.
Clients shouldn’t just be paying for “savings.” They should be paying for 10x capability unlocks; things that simply couldn’t be done before. That’s the new moat; not cheaper labor, but technology that expands what’s possible. The industry must start pricing on that basis. In a fragmented, AI-native world, only firms that anchor value in their technology margins and not their payrolls will hold ground. More in comment...