Technology & Outsourcing 2025

The rate of change in the technology and outsourcing industry continues to increase after a period of relative stability. New and disruptive technologies have come and gone (or gone somewhat dormant) within the past 12 months, while others have demonstrated more staying power. The global outsourcing industry continues to remain strong in light of these new and somewhat disruptive technologies, and outsourcing providers have incorporated many of these technologies into their service offerings. This ability to constantly evolve along with the broader technology market demonstrates the flexibility and resilience of the outsourcing industry as a whole.

New Technologies

Artificial intelligence

Artificial intelligence (AI) seems to have finally taken hold in the IT services industry. ChatGPT, GitHub, Bard and other generative AI solutions are end user-friendly and widely available, which seems to have led to greater adoption of AI technologies in the broader market. Moving from a mere buzzword tossed around by service providers who had not yet integrated the technology into their solutions to potentially a driver of new solutions geared towards increased efficiency, it seems as if AI in the IT services space is here to stay. Time will tell whether these AI-integrated solutions are “real”, in terms of tangible benefits to customers, but the pitches seem to have substance behind them (something that was lacking 12 months ago) and certain of the individual and somewhat isolated use cases have been fairly remarkable.

Cryptocurrency

Despite the challenges of 2024, the cryptocurrency market has survived and, in many cases, thrived. Valuations have increased since the most recent crash in 2024, with Bitcoin nearly doubling its value from its 2024 low; 2025 may be looked back upon as the year that the fittest of the cryptocurrencies survived. Given this renewed strength of the crypto market, there could be a resurgence of blockchain and cryptocurrency software application developers, advisers and managed service providers.

Non-fungible tokens

Non-fungible tokens (NFTs) are essentially digital certificates of asset ownership and are primarily represented by digital images that were bought and sold as if they were more tangible assets. At the height of the NFT craze, a single NFT sold for more than USD20 million at Sotheby’s. In 2024, the NFT market was operating essentially on life support, with very few analysts expecting a resurgence. However, miracles do happen and, due to a shift in the usage of NFTs from art to utility, there has been somewhat of a surprising resurgence. NFTs are now more prevalent in the form of digital diplomas, event tickets, loyalty credentials and supply chain tokens. The total market is expected to grow to USD34 billion in 2025 according to some estimates.

Metaverse

The metaverse promised to become a new digital world hosted somewhere in the ether, which analysts predicted would ultimately comprise a market worth several billions of dollars. Service providers immediately formed metaverse working groups and marketed managed services for customers’ needs in the metaverse. Meanwhile, metaverse consulting groups began advertising their services and social media management services evolved to encompass management of one’s social media presence in the metaverse. Aside from a handful of applications, the metaverse, as a digital version of the current world, simply never took off and very few customers engaged service providers for these purposes. However, similar to NFTs, the metaverse repurposed itself in a manner that appears to be geared more towards utility than simply providing a duplicate digital world. For example, teachers may train for active shooters or similar threats in the metaverse, and police may train for interactions involving those with mental health issues or with fentanyl users requiring immediate emergency care.

Implementation and adoption of these new technologies require practitioners to remain current on familiar concepts of the law (eg, IP, data protection and privacy, and employment law) yet also be prepared to apply these concepts in a very new way. Unfortunately, some level of patience is also required by practitioners, given that many of these issues are currently subject to litigation, including litigation that could prohibit (or materially limit) the use of these technologies as currently contemplated.

Stability of Cloud and As-a-Service Solutions

Unlike many of these more disruptive technologies, cloud and as-a-service solutions have been widely adopted. Customers across the globe have purchased some mix of these solutions with varying levels of complexity and, for the most part, have managed to appropriately navigate the data privacy, cybersecurity, export and tax issues initially presented by these technologies without borders.

Agreements governing these products have also seemingly stabilised. The largest providers (ie, the original providers of the actual cloud infrastructure behind most cloud and as-a-service offerings) continue to command the most deference to their terms and conditions, while mid-to-small providers often view their agreements as far more negotiable. Key sticking points have not changed throughout the years, as companies and providers alike continue to focus on limits of liability, indemnification, termination, compliance audits, data security and privacy, and permitted uses.

Outsourcing and New Technologies

While service providers continue to offer all of the more traditional outsourcing services (eg, data centre, application development and maintenance, call centres, support desk), these offerings are increasingly complemented by certain of the newer technologies described earlier. Service provider solutions in the outsourcing space, in particular, more often include some combination of AI and RPA. In many instances, the two go hand-in-hand, as traditional AI and automation depend in large part upon repetition in order to increase efficiency. Additionally, providers are introducing generative AI products and solutions that are specific to the service being offered and/or the customer receiving the service. As of the date of publication of this guide, however, providers mostly use AI as a back-office service in an effort to improve their own offerings, while customer-facing solutions are still relatively rare as part of a larger outsourcing deal.

As a result, many outsourcing providers who were traditionally more focused on towers or full-time equivalents are now on the frontline introducing their customers to newer technologies. This shift is also evident in the introduction by providers of “bundled offerings”. Bundled offerings are generally comprised of products or services offered by independent third-party providers through a customer’s outsourcing provider. These are not traditional subcontractor arrangements. Rather, the bundled offering includes two providers who ‒ in theory ‒ remain independent of one another, with the customer’s outsourcing provider serving more in the role of a managed services provider. Practitioners need to be wary of these models, as any number of providers have not resolved certain privity of contract and liability issues associated with this approach.

The above-mentioned approaches may represent an attempt by outsourcing providers to claw back against a very clear trend in the industry during the past several years, which is the breaking up of “mega” outsourcing contracts into several one-off agreements for individual services and products. Alternatively, outsourcing providers may be co-mingling managed services and outsourced services to a greater extent and simply hoping to become a one-stop shop for their customers.

Whether or not a “blip”, build operate transfer (BOT)/global capability centres (GCC) models are also on the rise. BOT/GCC models are not new and became relatively disfavoured over the last two decades. However, because these models enable customers to maintain more control over the servicing staff, customers are also in a better position to guide the technologies used and adopted by the servicing staff (as opposed to being beholden to the sometimes less nimble tools used by outsourcing providers).

Regardless of the reason, the introduction of new products, new services and new/revisited models demands that practitioners pay closer attention to the governing agreements. While many of the legal topics have not changed throughout the years, the approach to these topics certainly has and often calls for multiple approaches to address the same topic ‒ each dependent upon the technology provided.