Navigating The AI Revolution: Insights From Steve Burke for Channel Partners

Vendor margin cuts and AI disruption are reshaping partner trust. Here’s that the IT channel ecosystem needs from vendors before it’s too late.

When it comes to the IT channel, change is constant and consistent – but not always collaborative. In this second episode of The Channel Angle, I sat down with CRN Executive Editor Steve Burke and Technology Concepts Group CEO Avis Yates-Rivers to unpack what’s really happening between vendors and partners in this new era of AI and margin compression.

In two separate but similar conversations, one message rang loud and clear: vendors who want lasting loyalty must match innovation with clear intentions. Trust can no longer be assumed. It must be earned, and re-earned, especially with the pace of disruption is fast.

Here are five key takeaways every vendor needs to understand if they want to stay relevant in a channel-led future:

Abrupt Changes Are Breaking Trust

Vendors are shifting compensation models and cutting partner margins, sometimes overnight. These decisions don’t just alter spreadsheets and P&Ls; they shake the foundation of trust. Burke calls this out directly saying, “Trust is hard to gain, but can be destroyed very quickly.”

When Google slashed margins for its Gemini AI Workspace offering, partners were blindsided. As Yates-Rivers explained, “It really does put an undue burden on us in the channel…and that does begin to erode trust.” Particularly for smaller firms, a lack of clear communication or warning around major changes makes it harder to commit to long-term strategies. In some cases, it may force partners to walk away for better options.

Here’s the truth: partners have options. Brand loyalty might buy you time, but it won’t stop a partner from moving to a vendor who they see as a true collaborator.

Strategic Service Providers Are Driving the Market

Long gone are the days of simple product resell. Today’s channel ecosystem is led by strategic service providers designing full-stack, outcome-based solutions for their clients. They aren’t just delivering tools as a pass through, they are delivering business transformation.

Burke points out that “the partner brand is driving the products…with business outcome-based managed services.” This means vendors can no longer simply push product and expect results. They have to equip their partners with the tools, flexibility, and margin modes to build, sell, and scale integrated solutions.

Yates-Rivers is already doing that work. Her company recently launched cybersecurity-as-a-service, and procurement-as-a-service offerings, tying in AI and subscription models to provide more value to clients. According to the CEO, this shift is more than a trend, it’s the future.

Uneven Investment Creates Channel Friction

Not all vendors are showing up equally. Microsoft, with its CoPilot rollout, has doubled down on partner enablement, delivering air cover, incentives, and true co-selling opportunities. Burke credited this partner-first approach with “driving the AI revolution.”

In contrast, some vendors continue to prioritize direct to consumer sales, putting them in competition with their own channel partners. Yates-Rivers did not hold back: “There’s uneven investment. Some vendors are heavily investing in partner ecosystems and other prioritize direct to customer relationships.”

The inconsistency doesn’t just confuse the market, it weakens the vendor’s position in it. The lesson here is clear: if you want a channel to advocate for your product, don’t treat them like an afterthought.

AI Is The Opportunity AND The Divide

AI isn’t coming. It’s not on the horizon. It’s here. And it’s reshaping the channel faster than anything since, well, the internet. For partners who are ready, it’s a generational growth opportunity. For those who aren’t prepared? It’s a cliff.

Yates-Rivers and her team are all-in on AI. They’ve used generative AI to conduct market research, design go-to-market strategies and frame their newest solutions. As she put it: “We can move faster. If you’re not leveraging AI in the same ways, they you’re going to be behind the curve.”

Burke echoed that urgency, calling AI “a once in a lifetime opportunity; much bigger than anything we’ve ever seen with cloud or client-server computing.”

The message from both experts is clear: vendors who fail to support their partners in adopting AI through tools, training, and transparent strategy, will be left behind right alongside late AI adopters.

Partners Want A Seat at the Table – Not A Script After the Fact

Perhaps the most important takeaway is also the simplest: include your partners earlier. Vendors that make top-down decisions in isolation, handing them down as mandates, aren’t just inefficient. They’re eroding their own ecosystem.

Yates-Rivers laid out a vision for what’s possible: more advisory councils, shared investment in events, and proactive communication about what’s coming around the corner. “There are channel partners that have committed to helping vendors grown their businesses,” she said. “I’d like to see a better balance of trade there.”

At the end of the day, the best vendors do more than just provide technology. They provide foresight, treating partners as the strategic extension of their business – not as a line item to be optimized away.

The Bottom Line: Trust Is The Real Differentiator

The AI revolution is happening at warp speed. Margins are tight. Competition is fiercer than the Cowboy Carter Tour. But what will truly define vendor success in the next five years is not just innovation. It’s how well vendors invest in their channel relationships.

As stated in this episode, “It’s not just about the technical know-how. It takes strategy, clarity, and maintaining strong relationships.” The partners are ready. The question is: are the vendors prepared?

Listen and watch the full episode on YouTube. Share with your vendor team. Partners: tell us what you’re experiencing. We’d love to hear your comments.