COLUMN: When It Comes To AI, Don’t Forget The Channel

CRN’s Jen Follett says the challenge in the rush to capitalize on such artificial intelligence is that vendors moving quickly to bring products and services to market often give short shrift to actually building the channel-necessary to propel those offerings into the marketplace.

It’s no secret whenever there is a massive technology shift, vendors will move as quickly as possible to capture the opportunity.

That is certainly the case with AI, which has seemingly had the IT market in a tizzy since the introduction last fall of Microsoft-backed-ChatGPT. That launch helped catapult AI—generative AI in particular—in to the lexicon of conversations taking place from living rooms to boardrooms across the globe.

All the cool kids are doing it.

It’s a market ripe with promise, with the potential to become an inflection point that delivers a massive opportunity sized somewhere in the trillions of dollars by 2030, depending on which research report you read.

ServiceNow CEO Bill McDermott, for example, believes GenAI could-boost global gross domestic product by nearly $7 trillion. “Our platform experts who have worked with the greatest brands in technology believe this moment is as transformative—if not even more so—than the internet or even the iPhone,” he told financial analysts in July.

The challenge in the rush to capitalize on such a big opportunity is that vendors moving quickly to bring products and services to market often give short shrift to actually building the channel-necessary to propel those offerings into the marketplace.

We saw it with cloud computing when vendors raced to stuff the word “cloud” into every press release they could before their offerings—never mind their go-to-market plans—were fully developed. And we’re seeing it today with AI.

Even some of the most respected channel companies right now are falling into that trap. There is a large swath of GenAI products and technologies being brought to market with no channel plan to back them up. That means little to no investment in strategic elements such as channel training, sales compensation and incentives.

CEOs of several CRN Solution Provider 500 companies are already experiencing cases of channel conflict where they have brought an AI opportunity to a trusted vendor only to see it try to do a direct sales end-around to win the deal on its own.

Whenever there is a big technology turning point like AI, shortsighted vendors have a tendency to try to bring those offerings to market direct to customers. They take this path because they discount the ability of solution providers to sell, support and service a disruptive technology.

Then there are the vendors that recognize the value of teaming with the channel but try to do it with just a microcosm of their partner base, often a handful of their largest partners. These vendors underestimate the importance of driving share growth as a first-mover.

Inevitably, vendors learn the undeniable channel truth that customers rely on their trusted solution provider advisers to help them navigate any big new technology shift. As we saw with cloud computing, a technology disruption as big as AI brings the mandate that there is simply no way to scale a business without the support of a strong channel partner network.

In CRN’s Artificial Intelligence Special Section, we spotlight some of the solution providers that are already positioning themselves for AI success, such as Avanade, No. 33 on the CRN 2023 Solution Provider 500, which has rolled out a GenAI solution for an oil and gas customer to diagnose and repair problems with refinery pipelines, potentially saving not only time but lives.

Avanade and many other solution providers like it are primed to jump on AI opportunities, bringing their own brand of knowhow and deep customer knowledge to bear.

Recruiting these types of partners to seize such a big market is no small matter. It requires a channel investment and a sustained commitment to partners both new and old. A wave of fresh partners will inevitably join the fray even as legacy partners turn on a dime to capture the opportunity.

There are lots of channel lessons we have seen here at CRN during our coverage over much of the last half-century of these big technology shifts. It would be wise for vendors to remember that those who forget the past are doomed to repeat it.