Navigating a shifting SMB channel partner paradigm

Strategic partnerships have long been key determinants of business success. In channel terms, however, focus typically centers on the advantages for technology vendors looking to get their products in the hands of more customers by forging ties with third-party resellers and distributors.

It’s not hard to understand what has influenced this one-sided perspective, with technology giants such as Microsoft commissioning entire reports to showcase the rewards other vendors can reap by joining their wide-ranging networks – including higher revenue from services to the tune of $8.45 for every $1 driven by Microsoft’s own suite.

But the narrative is shifting. Through 2025, we can expect to see an increasing number of companies looking to take on extra capabilities, especially small-to-medium players that need assistance to keep up with the continuing explosion of AI.

Grappling to get a workable grip on AI

As economic conditions regain stability, SMB attention is turning back towards growth. Most SMBs are aware that their expansion will depend on enhancing the value they provide – with one in five hoping to amplify new business next year through diversified products and services – and, for many, doing so means increasing AI adoption.

Fast-moving incorporation of AI into cross-sector processes from customer support to logistics is making it an essential competitive advantage. As a result, small business leaders have come to consider AI as crucial to future operational success and started to boost current investment. The challenge, however, is that they are struggling to convert soaring enthusiasm into effective action.

Recent studies reveal only 25% of UK firms are actively using AI, while 36% admit their AI projects so far have failed. One obvious reason for this imperfect progress is restricted finances. Given that typical tech budgets equate to around 5% of revenue, SMBs simply have less to spend on building bespoke, sophisticated tools than big tech moguls. But further problems stem from continued skills shortages, as highlighted by the fact 30% of company chiefs say they don’t have the in-house knowledge required to execute their AI plans.

What do partnerships bring to the table?

The main upside of forming channel partnerships is obtaining a larger toolkit without expensive research and development. This makes cost less of a barrier for SMB leaders who want to embrace emerging tools but feel their tech teams aren’t adequately prepared.

Additionally, integrating pre-made tech enables SMBs to offer solutions that help them scale in line with evolving market needs, fill gaps left unaddressed by competitors, and cater to broader customers. Plus, with instant expansion allowing them to remain focused on their core products or services, they can ensure growth won’t compromise quality. For instance, a managed service platform that delivers healthcare software might team up with an AI-based IT vendor to offer augmented conversational support and intelligent security monitoring for its clients.

At the skills level, onboarding established solutions brings specialist knowledge that fuels benefits on multiple fronts. First, leveraging tools already supported by experienced data scientists, analysts, and machine learning engineers means SMBs can outsource day-to-day delivery and optimization, reducing the difficulties posed by a lack of internal AI proficiency.

Secondly, on tap access to professional expertise will give workers the opportunity to improve their individual abilities and understanding, better equipping them to navigate long-term tech transformation and minimizing recruitment issues for SMBs struggling to hire AI-savvy talent.

Selecting a suitable collaborator

Harnessing the positive potential above does require picking partners carefully. With global AI organisations totaling over 84,000 at last count, there is a danger that businesses overwhelmed by the ever-increasing volume of choice may be lured into selecting partners by the promise of buzzy features, rather than their capacity to generate real results.

Minimizing this risk will call for robust intentionality when defining the criteria for prospective contenders. For example, alongside ensuring vendors can walk the walk – i.e. providing fully functioning tech that delivers what it claims and hits business goals, and not just an enticing roadmap – companies must invest time in identifying their ideal customer profile and carefully evaluate whether solutions are a good match for specific needs, before penning agreements.

To cultivate mutual ongoing value, it’s also important to remember that effective channel partner relationships are meant to be symbiotic. Maintaining consistently transparent communication will enable productive collaboration rooted in shared trust, starting with encouraging open conversations around tech expectations, and running through to updates about both changing company requirements and how vendors are adjusting their tools to meet them.

As an increasing number of firms embrace channel unions to maximize their revenue and reach, the industry is entering a new partnership paradigm. Over the coming 12 months, ever-climbing interest in AI will fuel greater steps from SMBs to find partners that can bridge tech and talent gaps, while fulfiling the demands of digital-first customers. But to ensure new ventures power lasting gains, companies will also need to prioritize the right partner balance: a blend of unique and cutting-edge innovation mixed with practical and tangible usability.