Research: Most Vendors Want To Sell AI Through The Channel

Of the surveyed vendors, 33 percent said they have AI offerings partners can monetize.

Although artificial intelligence is still in its earliest days in the channel, most vendors already have an AI offering partners can monetize or are developing one – an early sign of the channel’s importance in the emerging technology’s success.

That’s according to new research from CRN parent The Channel Company, presented Monday during TCC’s XChange March 2024 conference by Kristy Davis, global vice president of AI, innovation and insights at TCC.

The research shows that 33 percent of vendors have an AI offering partners can monetize. Seventeen percent are working with AI technology leaders to create offerings partners can monetize. And 28 percent are developing AI products to sell through the channel.

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AI And The Channel

Since the emergence of ChatGPT, more than 300 new vendors have entered the space, Davis told the crowd. And 74 percent of software-as-a-service platforms built in GenAI integrations, with early AI use not limited to the largest enterprises.

“There was a lot of activity around that midmarket – 100 users to 1,000,” Davis said. “On the internal side everybody's going to have to focus here. Every business is going to have to achieve operational effectiveness and drive costs out, but also increase for scale. … We see a lot of activity right now in that space. Every business, I don't care what size you are, that's where that's going to lie.”

Still, for solution providers looking to differentiate themselves through AI, adoption of AI for internal use and for external use as a revenue-generator with customers is only just beginning.

The share of solution providers who have integrated AI into workflows jumped from October – 11 months after the launch of ChatGPT – to 12 percent in the TCC survey from February.

“Even though everybody has concerns … this isn't going away,” Davis said. “I think it's more about how do we get ourselves around this and kind of move forward. … It's going to change data science. It's going to change data analytics. And those data pipelines are going to be really, really important for everybody to focus on as we go and do this.”

Twenty-three percent of surveyed solution providers haven’t gone to market with GenAI products. And 77 percent don’t offer a commercial product with GenAI. Some solution providers remain cautious – the share saying they will never integrate AI into their workloads rose from 4 percent to 8 percent from October to February, according to TCC research.

Jason Romer, chief operating officer of Fair Lawn, N.J.-based solution provider Titanium – whose partners include Microsoft, Cisco and 8x8 – shared the stage with Davis and told the audience that his company has leveraged AI internally for automation to cut out the potential for human error.

“Now it's a heavy focus on the automation side of it because we obviously want to realize all of the benefits that come from that,” Romer said. “And then pairing that with an AI frontend, like a copilot, and then obviously ultimately trying to get that into the hands of our clients.”

Romer said his company has used products from Pia to build more automation. Titanium – which has about 10 employees – generally runs about 300 nodes per engineer. His hope is to reach 550 nodes.

His company has targeted level-one engineering work such as user onboarding and password resets to automate away dozens of hours of work a week. Other parts of the business including operations and professional services are asking what AI can do for them. He envisions a copilot interface taking care of low-level billing reconciliation and other use cases.

“We've knocked out maybe about 50 percent of our L1 stuff so far,” he said. “We're shooting for 100.”

Also on stage was Matt Yorke, the recently hired CEO of The Channel Company, who told the audience that his firm has been running some “considered, defined tests” around AI, with about 10 beta users. The company is monitoring AI’s effects on data access, storage costs and other areas.

“I would tell everybody in this room – do not go charging in and trying to push GenAI onto the entire organization because it's actually very risky,” Yorke said. “You need to have very small tests with defined KPIs, see how those go and then you kind of move out.”

The Channel Company, like other experimenters in AI, have used parts of its existing budget to run AI tests this year. “Any company is going to do the same because you can't afford to sit on the sidelines and say, ‘Well, let's wait for the next budget cycle and then see where we go,’” he said. “You lose what they call strategic experience, right? Every day you're doing something, you're actually gaining strategic learning. And you're just getting better and better. And, of course, the models themselves are actually improving. And you don't want to lose that time to market.”

Yorke said he is interested in where AI can augment a workforce, “to take a skillset where you're strong, and it's going to make you a superhuman. And it's going to take a skill set where you're relatively weak, and it's going to make you a really strong player.”

The future looks bright for the technology with about $151 billion in GenAI spending expected by 2027 and a “massive” PC and hardware refresh cycle expected in the second half of 2024. AI-powered PC and devices should dominate the market a 60 percent share by 2027, he said.

Cassie Jeppson, Lenovo’s partner director of North America programs, operations and strategy, echoed Yorke’s enthusiasm around PC refresh in her own talk Sunday.

“There is a different opportunity,” Jeppson said on stage. “AI is that opportunity.”

Other results from the survey of solution providers include: