Generative AI to Fuel Vast Partner Growth

Canalys found generative AI will fuel partner growth, while unified communications, infrastructure and more will impact IT spend.

So says a new report by analysts at Canalys, now owned by Informa Tech, the parent company of Channel Futures.

In its report, forecasters at Canalys highlight something that is not entirely flabbergasting — generative artificial intelligence (AI) will present ample prospects for the partner community, thus considerably impacting the channel.

That opportunity equates to almost $159 billion in anticipated sales revenue, which Canalys says will affect the channel ecosystem by 2028. What’s even more telling is that channel IT spend will reach nearly $5 billion by year’s end, defining 70% of IT spending in 2023.

The generative AI report further found that while global systems integrators and independent software vendors are (best placed) to tap into enhanced revenue, all channel partners can improve their productivity and offerings if they adopt generative AI for internal purposes.

How can channel partners capitalize on this opportunity? By offering AI services, developing AI software, offering advanced data services, reselling, co-selling, and upselling AI products with services around them, Canalys found.

Firms such as 8×8 and GoTo have added sentiment analysis and other forms of AI to their offerings in recent months, with Zoom doing as much as of late, rebranding its AI-fueled assistant formerly known as Zoom IQ, while adding several sought-after features that cater to the post and in-meeting experience.

Unified Communications, Cybersecurity, Infrastructure to Move IT Spend

Acting as somewhat of a holy trinity, this trio will significantly drive what Canalys anticipates will be the 3.5% increase in IT spending, or almost $5 trillion, by the end of 2023. Canalys also unearthed that unified communications represents a growth rate of 2.6%, or some $43 billion in growth, while cybersecurity is $79 billion, with a growth rate of more than 11%.

Infrastructure came in at $417 billion, with software ranked at $833 billion and a growth rate of 5.5%.

IT services overall are a $1.5 trillion business, with telecommunications services amounting to a little more than $1.4 trillion.

Global Cloud Market Growth Appears Sluggish

Slowing down to a 16% growth rate, according to Canalys, the cloud adoption market appears to be stalling, albeit not by much. Canalys reports that worldwide, while cloud infrastructure services spending increased 16%, to $72.4 billion, in the second quarter of 2023, that growth rate represents a  3% decline from the previous quarter.

“As the market feels the effect of spending pressures, though slower growth is also a consequence of the market’s greater size,” Canalys penned.

Forecasters at Canalys further comment that the top three cloud service providers – Amazon Web Services (AWS) (30%), Microsoft Azure (26%), and Google Cloud (9%) – captured 65% of the cloud spending market. Other companies represented 35% of worldwide cloud infrastructure services spent in the second quarter of 2023.

The big hyperscalers grew by 20%, but still declined if you compare it to 22% growth in the previous quarter. AWS and Microsoft saw “deceleration in growth,” while Google Cloud’s growth rate stayed steady if likened to the firm’s prior quarter, which saw some 31% growth.