2024 has been a year of profound transformation. Major elections, political unrest, wars, civil uprisings, and ongoing supply chain disruptions have created global turbulence. Despite these challenges, a silent technological revolution is driving fundamental shifts in human behavior, community interactions, societal structures, and government services. This revolution carries the potential to redefine economies and reshape how governments and enterprises function.

India, amidst this global upheaval, has emerged as a beacon of resilience. Outperforming every large economy, it leverages its status as a hub for leading IT service providers and offshore development centers. Simultaneously, India’s thriving startup ecosystem is pioneering innovations in AI for defense, drones, satellites, data analytics, and cybersecurity. As these advancements take root, 2025 is set to become the year of AI maturation and solidification.

Forrester has identified the following four predictions for India in 2025 that will impact enterprises, service providers, and software vendors.

  • Most enterprises fixated on AI ROI will scale back prematurely.

Forrester research highlights a growing challenge in AI investments. About 24% of AI decision-makers require an ROI of 51–75%, and 8% expect 76–100% ROI to consider their AI initiatives successful. Meeting these expectations remains elusive, however, due to high up-front costs, intangible benefits, rapidly evolving technologies, and privacy or regulatory challenges. In 2025, enterprises will shift their focus from ambitious, organizationwide AI implementations to targeted, practical use cases. These include customer service support, intelligent chatbots, automated report generation, and contract analysis. To adapt, organizations will increasingly rely on partners for proven use cases, prebuilt templates, and AI toolkits. They will also prioritize building internal capabilities by upskilling employees or recruiting talent in AI, data science, and analytics to ensure sustainable progress.

  • Implementation challenges will stall more than 50% of agentic and AI agent efforts.

Forrester defines agentic AI as advanced AI systems, powered by foundation models, that demonstrate a high degree of autonomy, intentionality, and adaptive behavior, extending beyond the capabilities of traditional and deterministic AI agents. These systems can plan, make complex decisions, and adapt to changing environments, thereby driving toward the highest levels of autonomy in complex process execution. Agentic AI leverages the capabilities of large language models by using primitive reasoning loops to accomplish a task from end to end in ways that weren’t possible with simple prompt strategies. Based on computer scientist Andrew Ng’s work, agentic AI is characterized by four design patterns, to which we’ve added two of our own: reflection, memory, planning, tool use, multiagent collaboration, and autonomy.

We are still in the early stages of development of agentic AI technologies and platforms. It’s an evolutionary phase that will take time, but there is lot of noise in the market on it, which is confusing enterprises. Enterprises still need to get their basic act together, including having a proper data strategy and governance in place, working with the overall business in understating the business cases that can be solved using agentic AI, and working with partners and software vendors to work on building templates and toolkits for easy adoption of agentic AI solutions.

  • The top 10% of USD $1 billion-and-above IT service providers will start delivering 30% of their core services through AI-enabled platform services.

A Forrester survey underscores why enterprises engage service providers: 33% value their expertise in emerging technologies, while 32% appreciate prebuilt accelerators and software. Service providers will capitalize on this demand by deploying AI-enabled platform services (APSes) to streamline operations and enhance service delivery. These platforms automate essential subprojects such as legacy system assessments, code review and migration, workflow optimization, and data modeling. By reducing manual effort, APSes boost efficiency, ensure higher quality, and cut costs. This transformation enables service providers to offer fixed-price models that focus on measurable outcomes like cost reduction, revenue growth, and market expansion — shifting away from traditional billing practices tied to full-time-equivalents or change requests.

  • Service-as-software will push 20% of midsized services vendors out of business.

Forrester’s Software Surveys from 2023 revealed that 9% of companies spend three times their application costs on services, while 20% spend twice as much. Enterprises will increasingly seek to reduce these expenses by adopting service-as-software (SaaS-like) solutions. Service-as-software integrates customizable AI-powered building blocks into prepackaged solutions, minimizing the need for extensive implementation or customization. These solutions can be deployed like traditional software, hosted either on-premises or in the cloud and configured to meet specific organizational needs. Larger service providers will dominate this market, offering expansive service-as-software portfolios or leveraging marketplaces to scale their offerings. Conversely, midsized service vendors face an existential challenge. They must either specialize in niche processes or verticals or expand their breadth of services as software. Without a clear strategy, many will struggle to remain competitive, potentially leading to a 20% reduction in this segment.

Start Planning Today For What’s Coming Tomorrow

To learn more about our predictions for the coming year, Forrester clients can access our Predictions reports. Use the following research to guide you on your path to success in 2025.

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