Cloud boom, consultants pay the bill as AI demands its invoice
Cloud revenue is growing 20% through price hikes, not added capacity. Accenture tells staff to skip vacations to sell. Consultancies are on the edge of the…
English · Original discussion in Spanish · Published
Cloud boom, consultants pay the bill as AI demands its invoice
Accenture's sales campaign has produced a textbook scene: salespeople skipping vacations to close deals before the year ends. Someone has to pay for the artificial intelligence party, and everything points to the consultancies being the ones footing the bill.
Cloud raises prices and the customer pays
The big three cloud providers —Amazon, Microsoft and Google— grew revenue 20% in the last quarter. The figure looks like expansion, but there aren't 20% more installations: it's price hikes in a captive market. That's vendor lock-in, and it's the best billing machine there is.
Accenture's warning
The announcement that its salespeople should skip vacations to sell more points to a weak year-end. It's not that AI is eliminating jobs —a simplistic reading—: corporate budgets are trapped between cloud and software. Consultancies are the adjustment variable and will compete on price until their profitability is wrecked.
The math that doesn't add up
The final calculation is jarring: there's no room for AI to generate trillions in revenue leaving more than a trillion in profit to amortize investments and another trillion to justify valuations. The full breakdown, item by item, leads to an uncomfortable conclusion. When the tide goes out, only the branded engines and Chinese open source will remain. At the end of the invoice line: the consultancy.
Accenture's sales campaign has produced a textbook scene: salespeople skipping vacations to close deals before the year ends. Someone has to pay for the artificial intelligence party, and everything points to the consultancies being the ones footing the bill.
Cloud raises prices and the customer pays
The big three cloud providers —Amazon, Microsoft and Google— grew revenue 20% in the last quarter. The figure looks like expansion, but there aren't 20% more installations: it's price hikes in a captive market. That's vendor lock-in, and it's the best billing machine there is.
Accenture's warning
The announcement that its salespeople should skip vacations to sell more points to a weak year-end. It's not that AI is eliminating jobs —a simplistic reading—: corporate budgets are trapped between cloud and software. Consultancies are the adjustment variable and will compete on price until their profitability is wrecked.
The math that doesn't add up
The final calculation is jarring: there's no room for AI to generate trillions in revenue leaving more than a trillion in profit to amortize investments and another trillion to justify valuations. The full breakdown, item by item, leads to an uncomfortable conclusion. When the tide goes out, only the branded engines and Chinese open source will remain. At the end of the invoice line: the consultancy.
Also available in: Deutsch
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (20 replies).
More summaries
-
AI bubble bursts: Altman asks Trump for $50 billion
Sam Altman asks Trump for $50 billion for a 5% stake in OpenAI. The numbers don't add up, investors are fleeing and the AI bubble is showing cracks. An analysis of the…
-
Semiconductors: the bubble nobody wants to pop
The semiconductor sector has risen 22% in a month, but sky-high valuations and geopolitical risk are fueling fears of a violent correction.
-
Spain tax confusion over €20 mystery shopper pay
A mystery shopper earning just over €20 wonders whether to declare it or register as self-employed. The company calls it an external collaboration.
-
Local AI that threatens the hyperscalers: the scenario nobody wants to see
Falling chip prices and free AI threaten the hyperscalers. The local AI scenario nobody wants to see, analyzed with data and without…
-
Selling 18-carat gold: from €56 to €63 per gram
Shops in Valencia pay €56 to €58 per gram for 18-carat gold; a private buyer offers up to €63. Selling means dealing with the Spanish tax authority, Hacienda.
-
From a 3% deposit to a money market fund: the debate
A 3% deposit is maturing and the question is where to put the money. Money market funds and ultra-short bonds are gaining ground over Spanish Treasury bills and deposits.