The technology advisor market is awash with opportunity, even as companies in the space try to quantify the exact size of their market.
A new study by technology advisory firm Bridgepointe Technologies estimates that TAs and tech services distributors are currently driving $30 billion in vendor billings annually. The firm’s number doubles the $15 billion price tag its competitor Avant Communications shared last month.
That’s a significant gap, but it reflects the nuances of an advisor channel that has historically flown under the radar and is predominantly composed of privately held companies.
TAs, also known as agents, operate in a broker model in which the supplier bills and manages the end user and pays a monthly commission to the selling partner. TAs typically sell using vendor contracts of TSDs, who support them with sales, marketing and legal resources.
Bridgepointe Chief Strategy Officer Scott Kinka said the company’s study walked backward from the supplier level, starting by assessing how many IT and telecom vendors are selling in a commission-based model. One could also calculate the number by counting the revenues of the TSDs, through which most TA revenue flows.
“The methodologies can produce different results,” Kinka told Channel Dive. “The reality of it is, it demonstrates that there's a significant opportunity ahead of the TSDs.”
California-based Bridgepointe functions as both a TSD and a TA, holding contracts with suppliers and selling to end users through 450 Bridgepointe-branded agents that the company calls IT strategists.
Opportunity ahead
The market studies from Avant and Bridgepointe both indicate “massive white space” for TAs and tech services distributors, Kinka said.
Bridgepointe shared its study at its annual Tech Summit to stress the market opportunity for its IT strategists.
Bridgepointe calculated the total addressable market at $316 billion. The number reflects IT spending in technology categories where TAs can earn commissions.
“In the categories where you have a path to monetization, there is $316 billion being spent per year,” Kinka said in his keynote speech at the Bridgepointe Tech Summit in Miami.
Divide that number by $30 billion, and the advisor channel is sitting at 10% market penetration, CEO and co-founder Scott Evars said.
Technology growth targets
Bridgepointe executives offered a roadmap for expanding the market from the estimated $30 billion to $60 billion.
In short, the advisor channel will grow through existing vendors expanding their channel footprint and new vendors adopting it as a route to market.
Kinka said customer spending in Bridgepointe’s core technology areas — which include data center colocation, networking, customer experience, unified communication and managed IT services — is set to grow at a 7% CAGR through 2029.
Bridgepointe is also counting on existing vendors, such as Digital Realty, AT&T and Zoom, shifting more of their sales to an indirect model.
Another way Bridgepointe is expanding its footprint is by targeting growth in the underpenetrated SaaS market. Kinka said TSDs are only selling 1% of enterprise software today.
Simply increasing from 1% to 2% of the $420 billion SaaS market will go a long way, Kinka said.
“We're not looking to change the world here. We don't need to. We just need to steadily and consistently chase what's next. That next wave is out there,” he said.
Larger and deeper client accounts
Bridgepointe executives encouraged IT strategists to move up-market into larger client accounts. Evars said Bridgepointe has won deals over large consulting firms and systems integrators in the last year. The company touts Marriott, Netflix, Dunkin Donuts and Toyota among its clients.
“We've earned the right to be in any customer across the United States,” Evars said.
Bridgepointe co-founder and chief revenue officer Brian Miller emphasized cross-selling, which has become a common theme in the TA channel. Many of Bridgepointe’s legacy customers originally purchased network or colocation services through the company. Those clients are prime targets for ancillary sales of CX, AI, managed IT and cybersecurity services.
And it’s much easier to sell to existing customers, Miller said.
“People don't pick up their phones…” Miller said. “It is tough, so when you do get an appointment, that's gold. But you can't be a snorkeler. You've got to dive deep, because there's so much wallet out there.”
