As concerns rise over how generative artificial intelligence could disrupt traditional outsourcing models, mid-tier IT services companies are sharpening their focus on AI-led transformation deals. Over the past few weeks, firms such as Coforge, LTIMindtree and Zensar Technologies have announced a series of large, multi-year contracts, signalling that demand for complex digital and AI-driven work is increasingly extending beyond the largest IT services players.
From Legacy to AI-Native
Pune-based Zensar Technologies said on February 13 that it had secured a $210 million deal with a large financial services company for a period of 5.5 years. The engagement goes beyond conventional legacy modernisation and is aimed at helping the client evolve into an AI-native enterprise. “This partnership is a landmark as it is not just about technology transformation, but about enabling enterprises to reimagine their operating models using AI,” CEO and MD Manish Tandon said, adding that the work combines technical and professional services with domain expertise in financial services.
LTIMindtree, which recently re-branded itself as LTM, announced on February 23 that it had won a $100 million contract from a European medical technology platform focused on hearing solutions. The seven-year deal involves developing and maintaining the client’s hearing instrument brands and private labels, including wearables and a mobile application, through LTM’s digital transformation and innovation platform iNXT.
Separately, the company has also secured a seven-year engagement with the Central Board of Direct Taxes to deploy AI infrastructure to modernise tax analytics, in partnership with Nvidia. While the contract value, at about Rs 3,000 crore or roughly $33 million, is significantly smaller, it underscores the growing role of AI systems in large public-sector digital programmes.
Coforge, meanwhile, has announced multiple deals in quick succession. On February 25, the company disclosed a $158 million contract with a UK-based client for five years starting April. “AI-led conversations focused on driving innovation, improving governance and resiliency are helping drive a material increase in both the number and the median size of large deals across Europe,” said John Speight, president of Coforge and Europe business leader.
A day later, Coforge said it had entered into a strategic partnership with US-based VHC Health, under which it will support end-to-end transformation across infrastructure, cloud, digital workplace and cybersecurity. While the deal value was not disclosed, CEO and Executive Director Sudhir Singh said the engagement reflects how clients are moving beyond pilots. “Providers are now seeking measurable improvements in clinician experience, operational resilience and security, with AI embedded into core digital foundations,” he said.
Speed Over Scale
Traditionally, contracts of this scale have been dominated by large IT services firms. However, mid-sized players such as Coforge, Persistent Systems and Mphasis have, over the past few years, carved out specialised positions that are helping them compete more directly. “These were earlier outliers, but we will now see more competition between midcap and large-cap IT firms for large contracts,” said Pareekh Jain, CEO of EIIRTrend, noting that longer-tenure deals are increasingly central to revenue visibility.
Industry executives also point to agility as a key differentiator in AI transformation work. “It’s not about scale of delivery, but speed to value,” said Ashwin Venkatesan, executive research leader for IT services at HFS Research. He added that enterprises are likely to prefer deals in the $70 million to $100 million range, structured around phased modernisation and productivity gains, rather than mega contracts. That shift, he said, plays to the strengths of midcap IT firms navigating the AI transition.