Vendor Dynamics To Reshape APAC Channel Expectations for 2025

The Australian channel is anticipating a more positive 2025 after a year marked by delayed decisions and extended sales cycles, but the big successes will be found by those channel organisations that can adjust to the changing expectations that major vendors have of their partners.

“Most of the folks I’ve spoken to have said business has been tight in 2024, with deals taking longer to close and facing more hurdles,” Moheb Moses, the co-founder and director of consultancy at Channel Dynamics, said. “But what’s more significant is how vendors are redefining what they want from their channel partners.”

Platforms bring changes to vendor-partner channel relationships

The shift towards platform-based delivery is driving this change, with major vendors increasingly handling direct product delivery while looking to partners for specific value-adds around services and the skills they can bring to the end customer. Moses points to Salesforce’s model as an indicator of the kind of relationship most vendors will have with their partners.

“Salesforce partners make virtually no margin on the product, yet Salesforce has one of the most loyal channel communities,” Moses noted. “Partners aren’t concerned about an extra two or three points on software when their services attachment is delivering margins between 25 to 40 percent.”

This vendor-driven transformation is creating new challenges around partner recognition and rewards. “One of the biggest challenges for vendors is how to track, manage and reward the influencers, especially when they don’t even appear on partner reports,” Moses explained. “The complexity of who actually influenced a sale versus who fulfilled it is becoming increasingly difficult to untangle.”

AI and refresh cycles bringing change in 2025

Looking ahead to 2025, Moses sees artificial intelligence as a potential technological catalyst for change, particularly with Microsoft’s AI integration in Windows 11 driving hardware requirements. However, he notes that traditional refresh cycles are evolving due to cloud platforms.

“The pressure to upgrade hardware every few years has diminished,” Moses said. “As long as a device can run a browser, it can access cloud platforms with the latest features. The AI element could change this dynamic.”

Vendors are also pushing partners to be the ones that expand their market reach rather than just service existing customers. “The message from vendors is clear – they don’t want partners who just ‘click the ticket.’ They want partners who can either uncover new markets or provide services that make their platforms more valuable.”

This shift is evident in how major vendors are approaching the mid-market. “Vendors are saying that as their platforms become simpler and more subscription-based, they expect their channel to target previously untapped segments,” Moses said. “It’s the same message we saw from Adobe when they moved to subscription pricing – they expected partners to reach smaller customers who previously couldn’t afford their solutions.”

Partner programs also likely to reflect changing buying behavior

For 2025, Moses anticipates this will drive further evolution in how vendors structure their partner programs. “The channel no longer looks like a vertical line – it’s more like a spider web with marketplaces, consultants, MSPs, agents, and cloud providers all interconnected. Vendors need to adapt their programs to this reality, and partners need to make sure they both fit in and stand out in this new reality.”

This, Moses said, is what is underpinning much of the M&A activity at the moment: “The businesses being acquired are the ones that provide a pathway to additional services. Partners aren’t looking to acquire companies because they have agency agreements with IBM or Cisco – who cares about that? They’re acquiring them because of the capabilities they bring in servicing,” he said.

“Because that’s what the vendors want. The vendors don’t care that you’ve got their product. They want someone who can create sales, not just fulfill them.”

The APAC IT channel has plenty to look forward to next year. Read more about why growth, not innovation, is a key opportunity for channel partners.