Technology vendors have a problem. Their partners — specifically, their MSPs — aren’t meeting expectations. It’s not only about missing sales targets. Vendors believe MSPs aren’t adopting new technologies and capabilities quickly enough to keep pace with market demands.
The source of this frustration is clear. Vendors are racing to position themselves for the wave of artificial intelligence.
Why Vendors Are Pushing AI So Hard
Many vendors are rolling out new products and embedding AI into existing applications in hopes of capturing a share of the rapidly expanding AI market.
These investments are significant, and vendors need to accelerate sales to recover costs and prove to shareholders they’re on the right growth path. Everyone is looking at Amazon, Google, Meta, Microsoft, and Nvidia and wants to be seen as a next-generation technology leader.
While the global IT market is expected to grow between 7% and 10% this year, most of that growth is being directed toward AI applications, services, and infrastructure. Nearly every other category is stagnating by comparison. So, vendors want partners, especially MSPs, to pick up the AI ball and run with it.
MSPs Growth — Just Not How Vendors Expect
MSPs are growing, even if not the way vendors want them to. Channelnomics research indicated that the average solution provider anticipates generating up to 40% of its revenue from managed services this year, with growth projected between 10% and 14%. MSPs are also maintaining healthy renewal rates, something vendors acknowledged, preserving recurring-revenue streams from existing accounts. But from a vendor’s point of view, acquiring a low number of new customers while keeping up with renewals is just coasting. It’s collecting revenue without investing in growth.
That view is partly correct, and partly wrong. MSPs have pointed out that they already made the big investments vendors pushed for often three to seven years ago and are now reaping the returns. What vendors see as complacency is the payoff from prior risk-taking.
The Real Barriers to New Investments
So why not invest again in new products and customer acquisitions? Because both are risky, expensive, and complex. In 2025, the average solution provider is reinvesting 21% to 26% of its net income in business development and expansion. Many are hiring staff and adopting tools to automate and optimize operations. Previously, they invested while bootstrapping growth. Now, they’re maintaining and refining what works.
Larry Walsh
The reality is that MSPs are facing more than just financial constraints. Many are struggling with talent shortages in areas such as AI integration, data science, and advanced security services. Others see customer readiness gaps, as many end users aren’t yet asking for or willing to pay for emerging technologies. That makes it harder for MSPs to justify up-front costs.
Vendor Sprawl, Competing Priorities
In addition, partners are dealing with vendor overload. Multiple suppliers are pushing competing priorities, each promising to be the next big growth engine.
Adopting new vendors and products requires up-front spending on administration, infrastructure, training, and marketing. It can take a year or more to reach a break-even point. If the sales cycle doesn’t move fast enough, partners will opt for low-cost, proven revenue streams over untested opportunities with lengthy payback periods.
Vendors often overlook that MSPs and solution providers are independent businesses with their own priorities. They operate in diverse markets, serving accounts that don’t always align with a single vendor’s products or go-to-market strategy. One vendor’s worst-performing partner can be another vendor’s star.
Risk-sharing: The Key to Faster Adoption
If vendors want partners to move faster, adopt new products, and embrace AI-driven opportunities, they must move beyond performance demands and start sharing risk. Here’s how that may look:
- Introduce co-investment programs to subsidize early training, marketing campaigns, and/or proof-of-concept deployments.
- Offer risk-sharing incentives, such as rebates tied to adoption milestones, rather than just sales volume.
- Provide tiered enablement plans so partners can gradually ramp up their capabilities instead of absorbing full costs up front.
Just as important, MSP partners prefer to align closely with companies that make it easy to do business. MSPs should align with vendors that offer:
- Clear, predictable partner programs
- Strong technical and marketing support
- Competitive margins
- Minimal channel conflict with direct-sales teams
When MSPs prioritize one vendor over another, it often reflects the ease of partnership as much as the profitability of the products themselves.
Not Every Vendor/partner Relationship Is Strained
It’s worth noting that tension and disappointment between vendors and MSPs aren’t universal. Many MSPs are making great investments and strides in expanding their capabilities and capacities. They’re also contributing to the growth of their vendors. Context matters, and not every vendor-partner relationship is the same.
The underlying message, though, is universal. If vendors want to turn AI ambitions into real growth, they need to show the math: the required investment versus the potential return. But more than that, they need to design partner programs that strike a balance between risk and reward, reduce friction, and make adoption both financially and operationally feasible.
Turning AI Ambitions Into Shared Success
Vendors that treat partners as allies rather than extensions of their sales teams will find MSPs far more willing to embrace emerging technologies.
That’s how vendors will transform AI-driven opportunities from aspirational goals into shared successes — and bring partners along for the ride.
Larry Walsh is the CEO, chief analyst, and founder of Channelnomics. He’s an expert on the development and execution of channel programs, disruptive sales models, and growth strategies for companies worldwide.
Featured image: iStock
