Analyst(s): Alex Smith
Publication Date: July 3, 2025
Despite widespread optimism for AI, many channel partners are struggling to translate it into significant growth, with much of the current AI spending concentrated among hyperscalers and large government projects rather than traditional partners. The partner ecosystem is adapting through investments and business model shifts, similar to past technological changes. However, near-term obstacles such as funding scrutiny, M&A disruptions, and a difficult macroeconomic environment are impacting profitability and growth.
Key Points:
- Despite optimism among partners regarding AI, many are struggling to translate this into significant growth. Vendor C-level executives primarily value partners who generate net new opportunities, especially those attributed to AI, making it challenging for partners focused on traditional fulfillment or those not demonstrating AI-driven expansion.
- While NVIDIA exhibits unprecedented growth in the AI sector, much of this spending has been with hyperscalers and large government projects, offering limited opportunities for traditional partners.
- The partner ecosystem is investing in AI and adapting business models, much like they have during previous technological shifts (e.g., cloud, software). However, the near term presents challenges such as scrutiny on partner funding, disruption caused through M&A cycles, and a difficult macroeconomic environment, all of which impact partner profitability and growth.
Overview:
Channel resellers, distributors, and global systems integrators are grappling with growth challenges despite widespread optimism surrounding the transformative potential of artificial intelligence. While there has been unprecedented expansion in the AI sector, exemplified by companies such as NVIDIA, a large portion of this growth is concentrated with hyperscalers and major government initiatives. The opportunities have yet to move downstream to technology ecosystem partners in a major way.
A recent Futurum survey of partners revealed high confidence in AI’s potential, with a significant majority expecting it to be their fastest-growing product category. However, the current reality for many leading partners, including the largest distributors, global systems integrators (GSIs), and resellers, paints a different picture. Many are experiencing flat or even declining revenues, indicating a widespread struggle to convert AI optimism into tangible growth. This collective performance underscores the intense pressure on channel leaders to find new avenues for expansion.
Figure 1: Distributor, GSI, and Reseller Growth, Trailing Twelve Months*
Historically, the partner landscape has successfully navigated similar threats, such as the shift to cloud computing and SaaS. These transitions often led to consolidation and an evolution of business models, as well as the emergence of new, innovative partners with different approaches. This adaptability suggests that the current challenges, while significant, may be cyclical rather than systemic, with the strongest partners ultimately making the transition.
Several near-term obstacles are impacting profitability and overall growth. These include increased scrutiny on partner funding from vendors, disruptions caused by ongoing mergers and acquisitions within the industry, and a generally difficult macroeconomic climate.
Despite these headwinds, there are reasons for long-term optimism. The persistent demand for specialized technical skills, the increasing complexity of technology stacks, and the eventual commoditization of new technologies will continue to create a vital role for partners. The emergence of AI only accelerates these trends.
Resellers, distributors, and GSIs alike are all actively investing in AI capabilities, with some showcasing promising examples of how they are leveraging their existing expertise to capitalize on AI deployments. For instance, some partners are focusing on data center expertise to support AI rollouts, while others are developing “agentic” solutions to address the potential disruption AI poses to traditional professional services.
Channel leaders within vendors must proactively identify partners with strong growth potential beyond the usual suspects. This involves understanding their unique value propositions, capabilities, funding models, and leadership vision. It is also crucial to launch programs that effectively track and reward AI-related wins, aligning partner compensation with the metrics that matter most to their own C-level executives.
Conclusion
The AI-associated opportunities for ecosystem partners are clearly there, but the journey to realizing this potential is fraught with challenges. Many will not make the leap. Vendors’ ecosystem and channel leaders must be strategic and proactive in identifying and nurturing high-potential partners, aligning incentives with AI-driven growth, and fostering deeper collaboration with their internal AI teams.
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Author Information
Alex is Vice President & Practice Lead, Ecosystems, Channels, & Marketplaces at the Futurum Group. He is responsible for establishing and maintaining the Channels Research program as part of the overall Futurum GTM and Channels Practice. This includes overseeing the channel data rollout in the Futurum Intelligence Platform, primary research activities such as research boards and surveys, delivering thought-leading research reports, and advising clients on their indirect go-to-market strategies. Alex also supports the overall operations of the Futurum Research Business Unit, including P&L segmentation, sales and marketing alignment, and budget planning.
Prior to joining Futurum, Alex was VP of Channels & Enterprise Research at Canalys where he led a multi-million dollar research organization with more than 20 analysts. He played an integral role in helping the Canalys research organization migrate into Omdia after having been acquired in 2023. He is an accomplished research leader, as well as an expert in indirect go-to-market strategies. He has delivered numerous keynotes at partner-facing conferences.
Alex is based in Portland, Oregon, but has lived in numerous places, including California, Canada, Saudi Arabia, Thailand, and the UK. He has a Bachelor in Commerce and Finance Major from Dalhousie University, Halifax Canada.
