From Cloud to AI: How Tech Vendors Profit While Businesses Hunt for the Real Gold

Not just now, but since the gold rush era, one thing has been consistently true: selling shovels has almost always been more profitable than digging for gold.

As long as there is a fantasy created around riches, and dreams associated with wealth, there will always be more diggers than discoverers.

The IT and technology industry has been playing this game since its beginning.

What started simply as a cost arbitrage—hiring an engineer halfway across the world instead of paying a high salary to someone on the mainland—quickly turned into an industry of shovel sellers.

You could hire engineers with every imaginable tech skill at a fraction of the price. But what you did with them, how you made them productive, and whether they produced “gold” for your business—that responsibility was entirely yours.

In other words: they sold you the shovel; you still had to find the gold.

Slowly businesses matured. Instead of just hiring resources, they began bidding out entire projects. But this too became another version of the shovel-selling industry.

Waterfall projects with endless delays, budget overruns, teams that kept growing, and outcomes that kept slipping. At some point, many businesses realized they had lost complete control of their projects. 

The industry slowly came full circle.

Customers started to understand technology better. They wanted to take back more control. They wanted to hire their own people again. They learned how to use these resources more effectively. Creating vendor competition also pushed down prices and forced transparency.

But then came cloud computing.

And just like that, the pendulum swung right back to the vendors.

Selling technology became almost effortless. The business cases looked incredible on paper. Capex shifted to Opex. Decisions moved from committing millions upfront to committing pennies with no long-term obligations. It was the perfect pitch.

Yet the fundamental question remained: where is the gold?
And once again, the onus of finding it stayed with the businesses.

Today, we are living through the same story—this time with AI and agents.

The hype is unbelievable. Every day feels like a new gold rush. There are golden shovels everywhere: tools, models, platforms, copilots, agents—pick whatever name you want. Everyone is selling something that promises transformation.

But what you actually get out of them is the million-dollar question.

And still… no one wants to be left behind.