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AI Will Expand Opportunities for Indian IT Firms but Mandates Business Model Shift: Snowflake India MD

Artificial intelligence is set to expand the overall addressable market for Indian IT services firms, but it will simultaneously compel the sector to overhaul its traditional pricing and staffing models, according to Vijayant Rai, Managing Director of India at Snowflake. Speaking in an interview with CNBC-TV18, Rai explained that enterprise clients are moving past early experimentation and are now demanding demonstrable business outcomes and clear return on investment from technology spending.

What Happened

Vijayant Rai stated that while the traditional Indian IT services framework has historically relied on billable hours, human scale, and headcount deployment, the rise of enterprise AI is altering client expectations. Instead of simply contracting more personnel for technology implementations, enterprises are seeking vendors who can unlock value from existing technology environments and disparate data stores.

Rai noted that this evolution will not shrink the IT services landscape. Instead, the market is expanding as traditional enterprises seek help navigating data engineering, AI architecture, and systems integration. He likened this coming transition to the software-as-a-service (SaaS) industry’s historical pivot from seat-based subscriptions to consumption-oriented pricing models based on compute and storage.

Key Highlights

  • Shift to Outcome-Based Models: Enterprise clients are increasingly prioritizing return on investment and business results over the number of billed hours or deployed engineers.
  • Expansion of Enterprise Workloads: Rather than reducing demand, AI requires specialized skills to prepare, clean, and organize legacy data spread across various enterprise systems of record.
  • Skill Evolution Over Pure Headcount: While technical tools such as Snowflake’s Cortex Code automate parts of data engineering, Rai emphasized that technology professionals remain essential for navigating complex enterprise systems and domain-specific requirements.
  • Snowflake’s Enterprise Traction: Snowflake reported having approximately 14,000 customers globally, with around 13,600 using AI features, up from a few thousand in the previous year.
  • Platform Collaboration: In India, Snowflake operates on cloud platforms such as AWS and Azure, positioning itself as an agentic control plane designed to work alongside IT system integrators rather than compete with them directly.

Why This Matters

The insights highlight a fundamental transition point for India’s IT services sector. For decades, the industry’s primary growth driver was its capacity to scale massive technical workforces. Because AI tools automate software development steps and lower entry barriers for dashboard creation and prototyping, revenue models based purely on labor volume face natural constraints.

However, enterprise adoption requires integrating AI with business context and complex legacy platforms. Indian IT companies possess substantial institutional familiarity with these enterprise environments, positioning them to capture higher-value opportunities in AI architecture, semantic modeling, and data engineering if they adjust their service delivery and pricing frameworks.

What to Watch Next

As AI deployment scales, enterprise focus is moving toward consolidating fragmented AI initiatives into unified production environments. In India, adoption speeds vary: startups and digital-native businesses are progressing rapidly, while traditional enterprises are moving from pilots to production at varying paces. Observers will be monitoring how system integrators restructure their billing models to align with consumption- and outcome-based pricing frameworks.

Frequently Asked Questions

Will AI reduce the total market size for Indian IT companies?

According to Snowflake India MD Vijayant Rai, AI is expanding the market rather than shrinking it, driven by rising enterprise workloads and the complex task of preparing legacy enterprise data for AI deployment.

How are customer expectations changing regarding IT spending?

Enterprises are increasingly moving beyond initial experimental pilots and demanding measurable business outcomes and direct return on investment, shifting focus away from the volume of personnel assigned to projects.

Are automated coding and AI tools making technology workers redundant?

Rai stated that automated tools lower entry barriers but do not eliminate the need for technical professionals. Designing data pipelines, connecting systems of record, and applying domain context to enterprise systems still require specialized expertise.

Source: CNBC-TV18