AI Evolution: Channel Partners Rise to Meet Growing Demand Amidst Industry Shifts

by Lisa McGarvey
7 minutes read

The landscape of artificial intelligence (AI) and machine learning (ML) solutions within the technology channel is rapidly evolving, with vendors increasingly recognizing the channel’s pivotal role in the distribution and implementation of AI technologies. CRN’s recent article, Most Vendors Want To Sell AI Through The Channel, emphasizes the seismic shift the technology industry has undergone since the emergence of publicly accessible AI tools, like ChatGPT. 

In the blink of an eye, AI and ML have transitioned from niche concepts to everyday lingo. People are diving headfirst into the realm of generative AI tools, leveraging ML to craft original content and visuals that seamlessly fit into their lives. According to McKinsey’s The State of AI in 2023 report, 79 percent of individuals have had a taste of generative AI either at work or in their personal spheres, with 22 percent already weaving it into their daily professional activities.

This explosion of interest has prompted businesses to accelerate the adoption of cutting-edge technologies. While the momentum is undeniable, there’s still ground to cover. As the industry sprints toward innovation, they’re encountering a few speed bumps in the form of cost and data management challenges. 

TD SYNNEX’s Direction of Technology Report unveils that a significant chunk – 31 percent to be precise – are stuck in the pilot or proof-of-concept phase. Only a modest 28 percent have managed to scale their AI endeavors to an enterprise level. It’s a race against time and competition.

Leading AI Endeavors In The Channel

AI is transforming various industries and sectors, offering new opportunities for innovation, efficiency, and competitive advantage. CRN calls out that “research shows that 33 percent of vendors have an AI offering partners can monetize. Seventeen percent are working with AI technology leaders to create offerings partners can monetize. And 28 percent are developing AI products to sell through the channel.”

This data reflects a strategic shift toward leveraging the channel’s reach and capabilities to drive AI adoption and innovation. However, AI adoption also poses significant challenges for vendors, such as technical complexity, high costs, talent shortage, and ethical concerns. Therefore, many vendors are looking for ways to buy AI solutions that can address their specific needs and goals, while minimizing the risks and barriers. One of the most effective ways to do so is through the channel, leveraging the network of intermediaries that sell, distribute, and support products and services from vendors to end customers. 

Insights from the TD SYNNEX Direction of Technology Report further corroborate the growing interest and investment in AI solutions within the channel. The report highlights a significant increase in partners offering AI/ML solutions, growing from 4 percent in 2022 to 29 percent in 2023, representing a staggering 625 percent increase within a year. Partners’ plans to invest in AI/ML are also on the rise, with 34 percent of partners planning to offer AI and ML solutions by 2025, compared to 14 percent in 2022. These findings underscore the growing momentum behind AI adoption within the channel and the increasing recognition of AI as a strategic imperative for businesses looking to stay competitive in a rapidly evolving digital landscape.

Moreover, security and cloud solutions continue to lead partner portfolios, with security emerging as the top-selling technology and cloud solutions dominating partner offerings. This reflects the interconnected nature of AI, security, and cloud technologies in driving business transformation and innovation. These findings underscore the increasing alignment between vendors and channel partners in harnessing AI technologies to address evolving customer needs.

Resellers Are Looking to the Channel for AI Solutions

Enterprises are finding many ways to harness the power of AI to boost innovation and transform their business, and as a result many end users become interested in “what can it do for me”.  However, the Direction of Technology Report highlights the foundational requirements for AI adoption, emphasizing the importance of data analytics, storage, and security in enabling the full potential of AI technologies. 

Industry research suggests that 10 to 15 percent of companies will be using generative AI solutions in a production environment by end of 2024, up from three to five percent in 2023. Furthermore, Forrester suggests that partner-led sales in Al will grow to around 40 percent of the market by 2024, and IDC predicts that channel sales of Al solutions will grow at a faster rate than direct sales in the coming years. 

As a solutions aggregator and distributor, we see that partners are increasingly focused on delivering the building blocks necessary for customers to leverage high-growth technologies like AI effectively. TD SYNNEX also sees a growing need from resellers for the channel to provide enhanced AI solutions, and we have launched programs like Destination AI to strategically aggregate these services to help partners gain a competitive edge and stay ahead of the curve. 

To unlock the boundless possibilities of AI and ML solutions, resellers are searching for robust support right from the start. This is about empowering teams with the tools, skills, and knowledge necessary to harness the true potential of these game-changing technologies. 

The Future of AI Solutions in the Channel

We expect these trends to continue, and likely accelerate as the models and channel ecosystem for AI evolves to meet changing market dynamics and technological advancements. We also anticipate the need for deeper collaboration and partnerships with channel partners leveraging aggregators to closely align with different types of ecosystem partners to provide comprehensive AI solutions and help augment skill sets. 

With the focus on AI and multi-vendor solutions, we see an increase in AI services, and as AI adoption matures, channel partners may increasingly focus on providing consulting and professional services to help organizations assess, implement, and optimize AI solutions. This could include the need for new type of skill sets including AI strategy consulting, data science services, model development, and ongoing support and maintenance. 

Distribution should look to help lower barriers to entry for smaller businesses and enable organizations to scale their AI initiatives more flexibly through subscription and consumption-based pricing models. And with the growth of transactions via marketplaces, AI marketplaces and platforms will be used to facilitate the discovery, procurement, and deployment of AI solutions, offering a curated selection of AI products and services from various vendors, along with tools and resources to help organizations evaluate and implement AI technologies.  

As AI continues to mature and become more accessible, the channel will play an increasingly pivotal role in democratizing AI technologies and enabling businesses of all sizes to harness the transformative power of AI. By leveraging the channel’s reach and capabilities, vendors can accelerate AI adoption, drive innovation, and unlock new opportunities for growth in the rapidly evolving digital landscape.

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