The Evolution and Future of Technology Distribution Partners in the Cloud Era

Source: CIO Magazine

Historically, technology partners thrived as local experts managing territorial complexities, earning high margins for integrating services beyond simple distribution. The shift to cloud computing introduced the commoditization of distribution, allowing software giants to directly access customers globally. This disrupted traditional partners financially by fragmenting revenue streams and compressing margins to as low as 5-20%, while transferring risks like customer acquisition and bad debt to partners.

Despite the cloud’s macroeconomic benefits and efficiency, the microeconomic model for partners became unsustainable, necessitating reinvention. The proposed Model 3.0 suggests modularizing partner roles by function—separating demand generation, adoption services, and transactional infrastructure into specialized players. This approach aligns specialists with tasks they perform best rather than expecting a single partner to excel in all areas.

This structural evolution encourages collaboration and specialization within partner ecosystems, redefining value capture away from generalist intermediaries to function-focused experts. Hyperscalers and ISVs are advised to adopt this framework by identifying core competencies and cultivating partnerships to handle non-core functions, aiming to enhance profitability and sustainability in the cloud-driven market.

👉 Pročitaj original: CIO Magazine