Investigating the explosion of the channel ecosystem

We have seen an explosion of partnerships in the channel in the last few years. It’s the subject of new research by channel analyst firm Canalys, which says partner-sourced or partner-assisted trade is now worth trillions of dollars globally.

“There are millions of partners as every company is becoming a tech company. “They’re flooding in from every single direction,” says Canalys chief analyst, Jay McBain.

But it’s not just the partner types that are relevant any longer –it’s the roles that they play, too, says McBain. That encompasses every stage of the journey of “getting the customer to the dance.”

He says the different stages start with the land, “where partners are either sourcing, selling or assisting through marketplaces or direct, getting the customer up on the dance floor.

“And then as 76% of companies become subscription and consumption businesses, every 30 days afterwards: the implementations the integrations, the compliance, the security, the governance, the data, the automation – all the things that happen that keep you a customer for life. Keep that customer dancing, all night long.”

The channel ecosystem landscape

The research also explores the explosion of the channel ecosystem landscape. It has found 223 companies across 11 specific functionality areas, with more than $3.1 billion raised last year by companies to innovate in new partnership types and roles. The hundreds of software companies represented in the landscape are providing automation and advanced digital capabilities to help companies design, develop, execute and manage a broad partner and alliance ecosystem.

The latest Canalys forecasts show that this channel software market will reach $8.9 billion in revenue by 2027.

Here are some channel ecosystem stats:

  • The average company is 17 years old. 17% of companies are less than five years old.
  • Two thirds of companies hail from the US. The UK is next with 18 companies, then Canada with 13, then France and Germany with eight each.
  • Top regions in the US are California with 53 companies, Massachusetts with 15, and New York and Texas, both with 11.
  • 26,459 employees are focused on building, selling and marketing channel ecosystem software.

Says McBain: “This is a really exciting, fast developing space, the innovation around automation, the channel data lake as it fills up and the ability to help all parts of the organisation, marketing, sales, customer success, the product teams, the operations teams, the finance teams, everyone in the organization – all boats rise in this data lake.”

Check out the research here.

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