2025 Channel Census early results: M&A, managed services and AI investments fuel 2025 growth

Final chance to take the 2025 channel census survey now.

The early results are in! More than 1200 solution providers across Europe and North America have shared their top growth plans, strategic technologies and business challenges for 2025.

In our 12th annual Channel Census preliminary results, you told us that investments in managed services expansion, merger and acquisition activity and AI are your big investment bets expected to drive 2025 growth.

For the last decade, solution provider business models have continued to evolve to take advantage of customers’ digital transformation needs, including cloud infrastructure, expanding cybersecurity and now AI solutions.

Underpinning this shift has been the strong demand for outsourced IT managed services, a primary business model now embraced by nearly 30 per cent of this year’s Channel Census respondents and growing from less than 10 per cent of solution providers in 2008.

And, as customers make their own choices about IT spending, staffing and management, your roles have expanded – with the average solution provider monetising IT solutions in three or four different ways.

Solution provider-led services have seen strong growth in revenue and profitability for the last decade, with managed services now representing more than one-third of revenues.

With as-a-service subscription and consumption offers now representing two-thirds of overall channel revenues, delivery of managed services becomes much more strategic.

On 1 January, 2025, the vast majority of solution providers started the year with 70 per cent of their annual revenues already secured through pre-existing managed IT services contracts.

Looking ahead to growth opportunities in 2025, this year’s census respondents are quite bullish on the economy and the prospect of rebounded growth.

With Gartner’s prediction of over 9 per cent year-over-year growth for the new year, nearly two-thirds of solution providers expect strong to significant revenue growth in 2025, fueled by their investments first in AI, then security and then in business intelligence/analytics.

Census respondents also indicated that expansion of relationships with COOs or operational leaders and VPs of customer experience or success were expected to be strategic sales strategies in the new year.

Over the last several years, channel merger and acquisition activity has also played a major role on the IT channel landscape.

Having peaked during the pandemic, M&A activity is still a growth and transformation strategy for nearly ¼ of this year’s Channel Census respondents, with 22 per cent making an acquisition, 12 per cent selling to another solution provider, and 13 per cent merging with another solution provider in 2025.

What are the top skills solution providers and private equity firms are seeking?

Hybrid cloud sales and services capabilities top the list, followed by a mature MSP practice and vertical market specific solutions and services.

Whether it’s through a build or buy strategy, solution providers tell us that attracting these skills consistently drive higher margins, customer insights, and predictable revenues in their business.

Among their most important growth and profitability dependencies for the average solution provider are strong and trusted supplier relationships.

And, today’s IT vendors are increasingly dependent on their channel partners’ ability to own the overall customer lifecycle and help customers realize top value from their IT investments.

In this year’s census, you told us that the most positive thing in your 2024 vendor relationships that you hope to take into the new year was the ability to drive your own services around vendors’ technology.

This teaming allows vendors to seed products into new customers and scale the pre-sales efforts of important new technologies, like AI.

However, supplier relationship challenges also remain in two areas -- with the complexity of ever-changing subscription and as-a-service pricing models and with the rate of change of partner-facing staff.

So, leading suppliers will be challenged in 2025 to try to reduce complexity and rate of change in licensing and pricing models, while keeping their field staff responsible for partner growth as stable as possible. The result if they’re successful? Increased partner trust, collaboration and continued investment.

Want more information on 2025 channel strategies from your peers?

Take a moment to fill out our 2025 Channel Census survey before it closes on 17 January.

Final results will be shared with all participants in a live recorded analysis from our research team in early March. Don’t miss the opportunity today!