Analyst(s): Alex Smith
Publication Date: March 26, 2025
2024 witnessed a flurry of channel M&A activity, including moves by major players such as AHEAD, CDW, World Wide Technology (WWT), and SoftwareOne. Futurum Research assessed these activities to identify key trends driving channel consolidation. Here are the key takeaways from the Futurum Research report.
Key Points:
- Given their overall dominance in the IT ecosystem, channel partners are focusing on strengthening Microsoft and AWS capabilities.
- Meanwhile, the rapid growth of major SaaS platforms such as ServiceNow is prompting partners to acquire specialized expertise.
- Channel partners will mirror key vendor strategies, using acquisitions as a quick way to obtain the core skills and customers needed to stay relevant.
Overview:
The global M&A activity has cooled since its 2021 peak, yet the technology channel continues to witness strategic consolidations. While channel partners typically don’t engage in the high-value transactions seen among vendors, the pressure to adapt to evolving technology stacks coupled with margin pressures has spurred significant activity in 2024. Notable acquisitions such as CDW’s purchase of Mission Cloud, SoftwareOne’s acquisition of Crayon, and WWT’s acquisition of Softchoice underscore this trend. As the industry shifts toward cloud, AI, and services, vendors should anticipate further evolution in their partner ecosystems driven by M&A.
Figure 1: Wave of Channel M&A Activity in 2024 in USD
Two primary motivations drive these acquisitions: cost efficiencies through consolidation and the acquisition of new capabilities for revenue growth. In the channel, this translates to partners either consolidating product businesses for scale and margin protection or acquiring specialized partners to enhance their skills in specific technology areas. Recent acquisitions highlight three key drivers shaping channel M&A.
First, partners are increasingly aligning with hyperscalers, particularly Microsoft and AWS, which are now considered highly strategic vendors. Acquisitions such as CDW-Mission Cloud, SoftwareOne-Crayon, and WWT-Softchoice reflect this trend. CDW, for instance, is building the Digital Velocity Group to enhance its cloud capabilities across multiple hyperscalers, including AWS and Google Cloud. Meanwhile, Microsoft-centric acquisitions such as SoftwareOne-Crayon are driven by the need for scale to maintain margins within the evolving Microsoft partner ecosystem.
Second, partners are actively seeking to capitalize on emerging SaaS platforms, with ServiceNow being a prime target. Acquisitions such as Ahead-CDI, Insight Enterprises-Infocenter, and Presidio-Contender Solutions demonstrate this focus. ServiceNow’s rapid growth and partner-centric approach have made it a lucrative area for investment, with partners aiming to enhance their ServiceNow capabilities to capitalize on its expanding market presence. Programmatic changes from ServiceNow, such as increased thresholds for Elite partners, are further driving consolidation in this space.
Third, partners are mirroring the strategies of their key vendors. Presidio’s acquisition of Splunk partner Kinney Group, following Cisco’s acquisition of Splunk, exemplifies this trend. Partners are heavily reliant on specific vendors, such as Presidio’s relationship with Cisco, and they align their M&A strategies to stay in sync with their strategic vendors’ direction. This ensures they remain relevant and capable of delivering solutions aligned with vendor roadmaps.
Conclusion
The 2024 channel M&A activity highlights a clear pivot toward cloud, software, and services. Large, historically hardware-focused partners are rapidly adapting to these changes through strategic acquisitions. These moves aim to enhance capabilities and ensure continued relevance in a transforming technological landscape. As partners rebrand and reposition themselves as ‘Solutions Integrators’, they demonstrate their ability to reinvent themselves. The question is whether these established players will maintain relevance in the emerging Agentic AI era, echoing their past transitions from client-server to cloud-SaaS.
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Author Information
Alex is Vice President & Practice Lead, Channels & Go-to-Market 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.
