According to Canalys (part of Omdia), hardware will drop to just 13% of the partner profitability mix in 2025, says Jay McBain, Chief Analyst – Channels, Partnerships & Ecosystems – Canalys
McBain says, “Our recent 2025 global partner survey by Canalys (part of Omdia) shows some significant shifts in our partner’s business models and their value delivery to the customer.
Check out this total mix for year ending 2024:
Last year, we heard loud and clear last year that the channel was moving into profit-rich services in record numbers. Services such as consulting, design, implementation, integration, managed services, and yes, software development are the targets for growth in 2025 as the average partner now participates in 3.2 business models:
Surprising to us was the sizable drop in hardware as a percentage of the portfolio – representing only 16% of revenue and 13% of profitability.
As an example, we see managed services approach $2 of opportunity for every $1 dollar of hardware.
Remember, the hardware number hasn’t changed distribution models – the direct/indirect mix has stayed consistent and the rise of digital marketplaces are for software and cloud infrastructure (at this point in time).
The hardware opportunity is also not small – there is $1 trillion of IT hardware being shipped in 2025 alongside $1 trillion in software. The key is that over $3 trillion of services will “multiply” the product opportunity (and grow faster than both hardware and software products):
If you are a vendor and still have a “VAR/Reseller” classification in your partner program, it might be time to reconsider!
