The top revenue generator for channel firms across the EMEA region is business and technical services, but an increasing number of IT service providers (ITSPs) are starting to work out how to turn AI services and solutions into a business opportunity.
According to the results of the GTIA State of the Channel 2025, the key revenue drivers still include cloud services, cybersecurity and data, but AI is the stand-out rising star.
In total, 55% of ITSP respondents from the UK & Ireland, DACH and Benelux regions, said AI would be a significant revenue driver in 2025 compared to 37% in 2024, with 55% revealing they intended to sell AI in some form.
Complexity: A Double-Edged Sword for Channel Firms
Speaking about the results at ChannelCon EMEA in London, Carolyn April, vice president of market research and intelligence at GTIA, said the increased complexity with these types of technologies is a double-edged sword for the channel.
“We have been on a slow iterative march away from cloud reselling or the VAR model to tech services and business services, but the fact that the technology landscape has grown exponentially more complex is a duopoly,” she said. “It is creating a lot of opportunity for channel companies because customers need the experts to sell, but it is putting a lot of pressure on companies to stay up to speed at all times.”
In turn, this complexity is impacting channel firms when it comes to recruitment, April explained.
“All of this [complexity] is continuing to put pressure on hiring, talent and finding the right skills. Workforce issues are becoming an endemic issue for many channel companies,” she said. “The more complex the world becomes, the more in demand your services are, but you have to get up-to-speed too.”
Stability vs. Transformation: Where Does Your Firm Stand?
Co-presenting the research, Tracy Pound, founder and managing director of Maximity Ltd, said the research confirmed that the channel was in a healthy state.
“The channel is largely very stable, and it is evolving. People are in one of two camps, they are either holding steady or changing rapidly,” she explained. “It is not wrong to sit in one or other of those buckets, but it does beg the question: Where are you? Are you at a point in your business where stability counts more than change does? Or are you at a point where you want to rapidly change and you want to be ahead of that curve? It is not wrong to be in either one of those camps.”
In more good news, harmony between vendors and their channel partners has increased this year with 87% of respondents revealing they are satisfied with their partnerships compared to 76% a year ago.
With four in 10 respondents revealing that cybersecurity is a core part of their overall business, and a top three revenue driver, Pound said the industry needs to beware of increasing scrutiny from external sources.
“We are facing increasing governance and scrutiny on how we protect our clients. We have to set the way we work. We have to self-regulate. The more we take responsibility for things like cybersecurity, the less external scrutiny there will be on what we do. Particularly when you look at governments and how they set compliance standards,” she said. “They don’t necessarily have the best understanding of our industry, and they don’t always focus it in the right way, then we are left with trying to pick up the pieces. We absolutely need to up our stakes on this.”
Looking Ahead: Betting on AI, Cybersecurity and Cloud
But the overwhelming message from the State of the Channel research was a positive one with a lot of exciting technology developments creating opportunity for ITSPs.
“AI adoption is going to be big,” April said. “We're still going to struggle with workforce skills and talent and trying to find the right people, but put your money on cybersecurity, data, cloud services and AI, that's where it's going to be hot. Complexity is your friend if you take advantage of it, and keep maintaining those good vendor relationships, because if you work together that's when everybody succeeds.”
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