2024 Top 10 Channel Partner Predictions

2024 will focus on metrics, not manuals, resulting in the rise of customer-centric channel strategies. The year will also center around data, not dials, and the imperative of winning in the new era of AI, partner collaboration, and ecosystem commerce. The partners will be compelled to move from silos to symphony by orchestrating the ecosystem to meet customer demands for AI and as-a-service. The Techaisle channel survey shows that the partner community members are searching for a roadmap to success. That roadmap will vary across partner models, as will the opportunities and requirements for suppliers. This shift will be driven by the rise of AI and ROI, which have made prioritizing metrics that align with business outcomes essential. Once again, vendor disintermediation will be real. The reseller channel will be under pressure as it explores different business models, product mixes, and strenuous demands for new skills and service capabilities. Techaisle partner predictions rely on extensive research with over 5000 partners leveraging a panel of over 300K partners. Here are the top 2024 top 10 channel partner predictions.

1. AI: Double-Edged Sword for Channel Partners - Reshaping Value and Facing Disruption

AI is expected to have a profound impact on traditional channel business models. It will change how businesses operate at all levels, fundamentally altering IT economics and service delivery capabilities. This will shift the discussion channel partners have with IT buyers as AI defines new ways businesses can use technology to create and deliver faster business response times, greater process efficiency, and new product/service offerings. This makes AI relevant to non-technical managers, expanding the buying group that channel partners need to address. Gradual change will not adequately respond to AI-driven market trends. Vendor partners may disintermediate the channel and develop AI-powered sales tools and self-service platforms to establish their leadership position. Channel leaders must embrace a “sense and respond” approach that allows them to identify developments that will have a tangible impact on their businesses while avoiding overcommitment to avenues that may seem technically impressive but are misaligned with financial or operational goals.

2. From Vendor Dependency to Buyer Value: The Channel's Pivot in the AI Era

In the era of AI, the buyer’s needs will become more acute, and the channel will play an essential role in supporting businesses in IT acquisition. However, the services/functions that have justified vendor payments to the channel have less direct value, which has strained the vendor/channel relationship. Vendors have looked for additional reasons to provide funding to partners, but these approaches often result in a plan that ends with the channel partner becoming a vendor agent. The channel’s most significant opportunity will be meeting buyer needs, requiring the channel partner to plot a path attuned to buyers rather than vendors. By addressing buyer requirements, the channel will take ownership of a plan consistent with meeting buyer needs, and vendors should help partners build these capabilities. Channel executives must migrate away from suppliers looking to monetize current account access rather than building long-term engagement and relevance.

3. From Products to Outcomes: The Rise of Shared-Risk Engagements in the Channel

As the buyer community increasingly demands outcome-focused project definitions, procurement departments will adopt shared-risk approaches to optimize the impact and value of systems that deliver new business functionality. In response, many channel partners will deliver via as-a-service (aaS) contracts, taking broad responsibility for specific technologies while establishing clear lines demarcating out-of-scope functions. These aaS/hybrid approaches to outcome-focused, shared-risk engagements will unlock significant growth potential – particularly in enabling the channel to build strategic relationships with procurement. However, they will strain the channel’s already-stretched resources, requiring new skills in negotiation, solution scoping, contracting, delivery, success measurement, and supplier management.

4. The Age of Specialization: Deep Skills, Not Paper Chases, Will Win the Modern Market

Beyond the “badge,” competencies and specializations will take center stage in the evolving buyer journey. Buyers value a wide range of proof points, including competencies (and demonstrable success in meeting similar customer needs), specializations (such as depth in domains crucial to buyer success), partner tiers, and certifications. The emphasis on these proof points shifts during the buying process – but many vendor programs focus on certifications as the primary means of establishing pathways that align vendor attributes and resources with partner business objectives. While the use of ‘just in case’ certifications has served the vendor community well and has benefited partners, partner competencies and specializations will be more powerful drivers of partner success. Rapid technological changes and buyer insistence on proven real-world capabilities will require partners to have specialized knowledge and skills aligned with the customer’s needs.

5. Rethinking the Funnel: Targeting Before Buyers Decide in a Diverse Purchase Journey

Buyers who work in teams typically don’t have meaningful contact with a supplier until they are far into their buyer journey and the purchase process. Channel partners must reach a large and diverse buyer population, and prospects who engage proactively with a partner will represent a small subset of the potential market. Channel partners relying on traditional lead generation campaigns will realize these funnels apply to a diminishing proportion of the market. Many buyers will disqualify suppliers before drafting a list of potential vendors. As a result, partners will find innovative ways to attract customer interest early in the decision process. To maximize the addressable market, channel partners will embrace customer education and digital marketing, align themselves with cloud hyperscalers, focus on solution accelerators, account-based marketing, and developer evangelism to gain entry to accounts that have not yet self-identified as prospects.

6. From Mass to Somewhat Bespoke: Tailoring Solutions in a Fluid Customer Landscape

As business models evolve and product margins shrink, channel partners will adapt to changing customer bases, buying and selling models, and solution compositions. Successful channel partners will focus on solutions that connect multiple products, bolstering single-digit resale margins with much healthier profits tied to planning, integration, and support. There is some risk to this approach, though: pick too standard or limited a configuration, and competition will drive down service margins; adopt too open a strategy, and the cost of researching, deploying, and supporting a mass of one-off implementations will eat away margins from inside the channel business. To strike a viable balance, channel partners will abandon monolithic systems and establish expertise in modular stacks that address target functionality via APIs while adopting a more flexible business approach emphasizing customizable solutions that can evolve with a fluid set of customer needs. To make this work, channel members will develop new skills and service capabilities and adjust their marketing, selling, and partner relationship configurations accordingly.

7. MDFs on the Decline: Customer-Centric Incentives Shake Up Vendor Playbook

Changes in customer buying types and selling models will prompt a re-think of incentives strategy within the vendor community that relies on the channel to engage and support buy-side organizations. A higher percentage of channel partners than in previous years will demand customer lifecycle funds, outcome-based funds, and solution development funds, disrupting the incentive schema for vendor partners. These incentives directly tie into the new types of relationships that buyers demand from their IT suppliers. While rebates and front-end discounts will remain important, tried-and-true (or “steak and bourbon”?) uses of MDFs will continue to decline in importance. Vendors must move beyond the "MDF Mimosa" to meet modern buyer needs.

8. FinOps Mania: Cloud Cost Optimization - the New Gold Rush for Consulting

Cloud cost optimization and economics (FinOps) are expected to be customers' most sought-after cloud consulting services. This will challenge partners (and their vendors) to provide transparency into cloud costs and ensure that customers receive the best available terms and conditions. To deliver value to the customer, partners and suppliers will define the current state of workloads and forecast the future. They will add value by developing and deploying processes that support cost optimization, compliance, and risk management.

9. Rewiring Partnerships: Navigating the Shift from Channel Push to Ecosystem Pull

As noted in the first prediction, customers will opt for hybrid environments aligned with their evolving needs instead of turnkey systems. This shift necessitates an accelerated frequency of ecosystem participation. Multi-party collaboration will become a critical strategic competency, not an opportunistic response to a non-standard solution requirement. Pursuing this ecosystem business approach will require changes in go-to-market strategies – evolved partner management practices, better-defined roles for complementary skills, and an ability to integrate around data (which the buyer views as core to a business solution) rather than physical system components (which are the basis of channel sales, delivery, and value crystallization). These escalating requirements will expose the vulnerabilities of channel partners in meeting customer expectations. Ecosystem alliances will become non-optional and essential in the partner survival kit, requiring shared investment in a buyer-centric channel ecosystem.

10. Marketplaces & Partners: Allies in the Quest for Agility, Control, and Buyer Empowerment

Marketplaces will not kill the channel; instead, channel partners will be a vital link in the buyer's journey. Buyers will have access to a curated codebase that provides some expectation of security and interoperability. Cloud marketplaces will help IT staff manage the ingestion of new software capabilities, and the effective use of cloud marketplaces will contribute to agility and cost control. Both partners and marketplace operators will build and manage relationships, plug into sales and marketing programs, drive investment in the implementation and support for end-users, and fund all of this on a fraction of the monthly fee associated with each service sold. Marketplaces will contribute to channel evolution, not extinction, opening doors to agility and control.

11. Beyond Tech Specs: Channel Partners Embrace Buyer-Driven Value Creation

Technology is a strategically important input to most businesses and a major expense category. In this context, the vendor’s perspective on value addition will be less relevant than the buyer’s view of whether and how their suppliers create value for their businesses. Channel partners will make migration to customer value creation an immediate priority. Business users will opt for metrics and SLAs rooted in business outcomes; successful suppliers will support this approach. Channel partners will ensure that their sales and marketing resources and customer commitments (SLAs) align with business outcomes rather than technical thresholds.

Read the 2024 Top 10 SMB and Midmarket Predictions