You must have read about the latest acquisitions in the IT services market. As large companies swallow up smaller companies (in some cases, the smaller one is trying to digest a large acquisition), or a slew of small companies consolidate, some trends emerge that should influence your services positioning:

• Acquisitions raise the barrier to entry: as large companies eat up smaller companies, they bring extended capabilities to offer clients endless services. Now smaller firms will find it difficult to work with clients, as they prefer to work with a few vendors
• Differentiation is critical: clients will still need specialist services, and building niche service capabilities is critical. One of our clients is in the enterprise content management space. Their client list is enviable, and PE firms are beating their doors down to help sell the business
• Sales strategies and positioning changes: your sales strategy and marketing positioning will now have to tackle new complexities–what is your core, how can you add value, and what difference can you bring to the table

It is a good time to sit back and think about what niche you could explore, and how to build expertise in it. Yes, revenues will waver and margins may topple, but you will be building a valuable business, instead of the commodity you are toiling in.

Cheers, and happy independence day weekend.

Karthik