TD SYNNEX released its Third Annual Direction of Technology Report on Oct. 9, and it highlights channel partners placing a heavy emphasis on accelerating investments in AI and GenAI technologies.
The report is the product of surveying over 1,000 technology resellers, systems integrators, and managed service providers (MSPs) from over 60 countries. In addition to respondents sharing that they are accelerating AI investments, nearly half say they plan to offer AI-driven solutions within the next two years.
According to the report, channel partners are trying to find a balance between AI innovation and other core technologies to ensure they’re not putting all their eggs in one basket and meet unique client needs. Further, security remains critical to respondents and “remains the top offering for partners, underscoring the need to balance innovation with risk mitigation,” the report states.
“For the third straight year, the Direction of Technology report provides a clear picture both of the current state of the technology market and areas where businesses say they plan to invest the most,” CEO of TD SYNNEX Patrick Zammit said in a press release. “This year, we’re seeing much more detail on how partners are embracing the power of AI and cloud technologies while making technology more adaptable to the needs of their customers. At the same time, they are balancing the need for robust security and regulatory compliance across all industries.”
What is influencing the IT market?
Among the key global trends emphasized in the report that have influenced the IT market in 2024 include:
- An importance on certifications and specialization in the tech marketplace, especially in the areas of cybersecurity and data privacy. According to the report, 58 percent of respondents say cybersecurity and data privacy certifications or specialization is key to success, and 45 percent saying AI certifications and specialization is as well.
- In the next two years, 44 percent of channel partners plan to offer AI under mounting pressure to make the case for high-growth technologies. The channel ecosystem is also investing in core technologies like security and hardware to ensure that the new technologies work with the foundational ones.
- In 2024, financial success in the channel has been driven by products at the intersection of security and innovation. Respondents said that security was the top profit generator in the ecosystem and networking, endpoint devices, AI, and hyperscale infrastructure are also top revenue drivers.
- Channel partners drove nearly three-quarters of IT spend (73.2 percent) in 2024. Collaboration will be critical for leaders to embrace in the channel as competition rises and technology transforms.
- The regulatory landscape is shifting at a global scale as climate change, human rights, and corporate governance impact the industry. Respondents identified environmental, social, and governance (ESG) standards as one of the top two challenges for the channel in the next two years. Partners will be planning to offer technology solutions that help customers move toward a more sustainable and equitable society going forward.
When it comes to selecting a distribution partner, simple technology and transactional solutions are what respondents want the most. According to the report, 61 percent of respondents identified simplified, specialized tech solutions, 55 percent identified ease of transacting business, and 48 percent said business enablement. These priorities underscore flexible financing options as important to the channel ecosystem, as well as services and solutions to help companies simplify their business execution and advance tech solutions to end users.
Other key needs that respondents want from distribution partners include:
- Geographic reach (46 percent)
- Breadth of portfolio (36 percent)
- Self-service platform (32 percent)
- Relationships with people there (23 percent)
The impact of AI on the channel
As expected, AI continues to have a major influence on the channel as the technology continues to spur innovation across the IT ecosystem.
The report found that respondents are ready for the surge in AI offerings with 44 percent planning to offer AI in the next two years, which is an increase of 214 percent since 2022.
The increase in AI investment is traced directly to customers driving demand for AI. Customers are eager to see how new tech can improve their business and 84 percent of respondents in 2024 have received requests for GenAI proofs of concept. Additionally, 65 percent of respondents reported that their customers are requesting AI proofs of concept at least some of the time. These proofs are to allow companies to demonstrate the viability of AI-related ideas in development, exploring their potential to drive value for both individuals and the broader market.
Additionally, one in three respondents say they receive GenAI proofs of concepts frequently or in every deal.
As AI starts to drive business, respondents were asked how many AI deals they closed within the last year and how many they expect to close in 2025. In the last year, 77 percent reported closing deals involving AI. Only 23 percent of respondents said that they closed no deals involving AI, but only 6 percent expect this same kind of outcome next year, signaling the growing demand.
Increased competition and IT transformation present challenges
The rapid growth in the IT ecosystem has also been met with unprecedented challenges to business. Over half of the respondents to the survey (52 percent) said that their business is currently impacted by increased competition and margin pressure, along with 48 percent citing the need for ongoing technical education and digital transformation.
Other IT challenges presented to respondents in the report include:
- Rapid technological change and adoption (47 percent)
- Ongoing product and solution sales training (47 percent)
- Adapting to external factors, such as supply chain and interest rates (45 percent)
The future of the IT market
Despite escalating social and economic instability, the report says that respondents experienced more revenue growth and fewer declines. According to research from the IT Global Opportunity report, there was a 6.2 percent increase in worldwide IT spending in 2024, reaching $4.9 trillion.
Driven by AI deployment and data protection, TD SYNNEX says that “tech leaders should be encouraged about the road ahead, where interest in high-growth technologies is expanding.”
When looking at what’s next for their business, 50 percent of respondents identified organic growth and 42 percent identified engaging with the channel as their top two growth strategies in the years to come. While the future of IT market growth appears to be driven by collaboration in the ecosystem, some respondents also indicated that they aim to acquire organizations (31 percent), find a buyer (24 percent), or merge with other organizations (23 percent).
There will be many challenges and opportunities going forward. TD SYNNEX site these steps as a way for companies to prepare for what’s next and to stay ahead of the curve:
- Lead with ingenuity and flexibility
- Drive innovation with a strong foundation
- Leverage essential solutions for a complex world
- Prioritize collaboration, coordination, and consolidation
- Meet regulatory and mitigation risk
With these steps, TD SYNNEX says, companies will be ready to adapt and thrive in the shifting digital landscape.
“By focusing on these key trends, companies will not only be ready to adapt, but to thrive,” said Jill Kermes, Corporate Vice President, Global Corporate Communications and Citizenship at TD SYNNEX. “Looking ahead, technology leaders must stay focused on how to best optimize and grow their business, as well as how they can deliver solutions that best support the people who will use them.”
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