IT resellers are investing heavily in AI. But they're struggling to turn those investments into substantial revenue, even as North American partners pull ahead of their global counterparts in developing AI capabilities.
Tech distributor TD Synnex surveyed 1,500 channel partners for its fifth annual Direction of Technology report, released last week.
Worldwide, two-thirds of respondents said they were accelerating investments in AI, yet only 21% had generated more than a quarter of their revenue from the technology. TD Synnex said the 45-percentage-point gap was the largest among the technologies studied.
“What’s particularly interesting this year is how the definition of value is shifting," said Jill Kermes, corporate VP of global corporate communications and citizenship at TD Synnex. "The research goes beyond identifying which technologies are gaining momentum to examine what separates investment from meaningful business results.”
North American resellers appear better positioned to capitalize on AI opportunities, with more than one-third identifying as AI experts. That compares to less than a third of partners globally who see themselves the same way. More than half of of North American respondents report being AI ready, meaning they're actively investing in AI capabilities, compared to 44% worldwide. Just 12% of North American partners remain AI aware, a designation indicating they have yet to invest, compared with 22% of partners globally.
North American resellers also said they're having more commercially focused customer conversations. More than half said customers initiate AI discussions to address specific business problems. That compares with 44% globally.
Pilots struggle to reach production
Just 13% of surveyed resellers said a majority of their customers’ AI pilots or proofs of concept convert into scaled deployments. Security, legal and governance concerns were the most common impediments, followed by unclear business cases or return on investment and a lack of internal skills to manage AI after deployment.
David Chao, director of AI and the DX Center of Empowerment at TD Synnex, told Channel Dive that partners need to rethink how they identify and deliver AI opportunities.
”AI is not an ‘out-of-the-box'’ solution that can solve every business problem,” Chao said. “Resellers should help customers identify the specific business processes they want to improve, document how those processes work today and then reimagine them based on what AI can realistically accomplish.”
He cautioned against relying on AI enthusiasm to close deals.
“The focus should be on tangible business outcomes and determining which processes AI can enhance, transform or eliminate,” Chao said.
Service opportunities
Customer obstacles are opportunities for resellers. Although 42% of survey respondents cited security, legal and governance concerns as deployment roadblocks, only 22% currently monetize governance services. Chao expects that to change.
“As partners expand their skill sets or collaborate with other firms to broaden their capabilities, we will see significant profit centers emerge in areas such as governance, integration and AI management,” he said.
Cultivating an profitable AI practice requires expertise in multiple technologies.
"It is no longer enough to specialize in one technology with limited knowledge of how it intersects with others," Chao said, pointing to network security partners who may lack the AI security and data governance expertise.
“We're seeing partners evolve their businesses to meet this broader mandate and address the full range of technologies AI touches," he added.
Nearly three-quarters of North American respondents expect managed services to grow as a share of their business over the next year.
The stakes extend beyond AI. Even though more than three-quarters of respondents reported revenue growth and 67% reported improved margins, 44% identified pricing pressure and margin compression as key challenges to scaling their businesses.
While partners contend with pricing pressure, established customer relationships could give them an advantage when competing for AI business. Nearly half of respondents said existing relationships and trust provide the main reasons they win competitive AI deals.
"Trust has always mattered in this business," said Patrick Zammit, CEO of TD Synnex.
Internal adoption
TD Synnex found that partners with mature internal AI programs have stronger reseller performance. Firms with AI embedded in their operations reported higher revenue growth and margins, greater AI revenue contributions and more success moving customer projects into production than their peers.
Chao described one partner that leveraged internal use cases to shift from traditional hardware-focused value-added resellas to outcome-based managed solutions and consulting. The partner developed a chatbot for its website, joined TD Synnex's AI Accelerator program and built a strategic, repeatable business model.
"They've since successfully evolved into an outcome-based managed solutions provider and AI consultancy, with four repeatable AI solution plays and AI solutions representing 20% of their annual revenue," Chao said.
