Hyperscalers' mass, AI role dominate partner ecosystems

AI influences partner preferences

The rise of generative AI also influences alliance trends, encouraging IT service providers to link up with a hyperscaler's technology partners in that field. For example, AWS channel partners pursing GenAI might work with Anthropic, the subject of a $4 billion investment by Amazon, Swan noted. A Microsoft partner, on the other hand, will lean toward OpenAI. Microsoft in 2023 announced a planned multibillion-dollar investment in OpenAI that expanded on earlier ones, with published reports saying it has committed a total of up to $13 billion.

"They have their own solar systems," Swan said, referring to AWS, Google, Microsoft and the GenAI startups in their orbit.

Tercera divides its top 30 listing into three tiers. The first tier, dubbed "market anchors," includes AWS, Google and Microsoft -- along with large ISVs such as Salesforce and ServiceNow. The second tier, "market movers," features publicly traded vendors with evolving partner ecosystems. The third tier, "market challengers," consists of privately held vendors with a partner-centric orientation. Anthropic and OpenAI occupy this tier, for example.

A 2024 generative AI survey from TechTarget and its Enterprise Strategy Group division reinforces the leading cloud vendors' pivotal ecosystem role. The survey polled 610 GenAI decision-makers, influencers and users on which vendors had the best ecosystems for supporting their GenAI initiatives. Microsoft topped the ecosystem list, with 54% of the respondents citing it. Microsoft's strategic partner, OpenAI, was the second most popular ecosystem with a 35% share of respondents. Google and AWS rounded out the top four, with 30% and 24% response rates, respectively.

The global survey polled respondents across a range of industries, including business services and IT.

Microsoft partners see growth in AI

An IDC survey of Microsoft's partner base also points to the importance of AI within ecosystems. Eighty-one percent of the more than 600 partners polled worldwide said Microsoft's AI offerings would increase their Microsoft-related revenue. On average, partners expect to see their Microsoft AI revenue grow 39% in 2024, according to the Microsoft-commissioned survey published last week.

While the survey doesn't specify how AI influences services revenue, Microsoft's interviews with partners indicate that AI "opens up  additional opportunities" in areas such as governance and security, a Microsoft spokesperson said.

Partners' AI growth prospects, meanwhile, contribute to the expansion of Microsoft's partner population, which the spokesperson said grew nearly 20% from 2023 to 2024. That growth can be "attributed in large part to the Microsoft AI Cloud Partner Program and the opportunity that AI presents," he said.

The partner program, launched in 2023, aims to help channel companies build offerings on Microsoft's AI platform.

Hyperscalers fund cloud opportunities

Partners, however, are drawn to the large cloud providers for reasons other than AI. In one partner boon, hyperscalers are funding customers' cloud migrations and enlisting IT services firms to facilitate adoption, Tercera CEO Chris Barbin said. The cloud vendors pay service partners directly to migrate customers' data or build cloud applications, he said. The migration investment boosts partner revenue while setting up hyperscalers to drive cloud consumption as they land more customers.

The vendor-funded migration projects won't last forever, but they offer partners near-term opportunities that can run into the hundreds of thousands, if not millions, of dollars, Barbin noted.

"Right now, there's an opportunity for services firms to capitalize on the large war chests the hyperscalers have to build momentum," he said.

John Moore is a writer for TechTarget Editorial covering the CIO role, economic trends and the IT services industry.