AI rewrites the economics of Amazon's cloud-consulting business (www.businessinsider.com)

Amazon's ProServe cloud-consulting arm is undergoing a significant transformation, driven by the rising impact of AI on the consulting industry. Major clients are pressing for reduced fees as AI tools automate many tasks traditionally handled by human consultants, leading to an expectation for lower costs in return for faster, more efficient service. In response, ProServe plans to shift 75% of its projects to a fixed-price model, emphasizing outcome-based pricing rather than the traditional billable-hour approach. This shift reflects a broader trend across the consulting sector, where firms like Accenture and Deloitte are also pivoting to leverage AI for enhanced productivity and competitive pricing. To support this shift, Amazon is establishing an "Agentic AI" team to manage AI agents—termed as a "digital workforce"— that can autonomously carry out tasks with minimal human intervention. This innovative approach positions AWS as a leader in integrating AI agents into consulting services, which could significantly boost productivity and reduce costs. By adopting an AI-first consulting model, ProServe aims to deliver greater value and measurable results, thereby supporting AWS's growth targets. This strategic pivot not only seeks to enhance customer satisfaction but also aims to drive significant revenue growth for AWS, positioning it for sustained success in the competitive cloud market.