The channel partner community is seeing a lot of interest. Private equity is looking under the hood. For Trusted Advisors growth is a challenge, so TSB’s have been either loaning them cash or investing in them.
Last week, AppDirect acquired a partner, CCI, that was owned by a PE firm. The only news about it was a transaction note from the bankers. The bankers were involved in ARG getting investment. Recently, they authored a paper about the channel being ripe for more investment – because it is asset-light and recurring revenue.
Telarus just had their annual event, where they launched their annual report about trends in the space. (And launched a bunch of employees off the payroll right after the event!)
Both reports have similar themes, like CyberSecurity is a growth market for partners. AI is here to save us.
“As the advisor channel continues to embrace new categories of technology spend and platforms continue investing in data, security, and AI-enabled tools, the businesses that combine scale, independence, and technology differentiation will continue to command significant interest from both strategic acquirers and financial sponsors.”
Private equity has already snapped up most of the top agencies. Upstack, Bluewave, Bridgepointe, Amplix, Intelisys, AppDirect, ARG and a few others have been in the M&A game in the trusted advisor space since April, 2021. About $400 million dollars has been invested in agencies.
Upstack has almost 40 transactions. Amplix is on its 15th deal since the TA accepted funding from Gemspring Capital, a private equity group, in late 2022. The firm has 275 employees now! Bridgepointe got another investment in April 2026.
Upstack had a RIF recently and managing partners are buying champagne as they are told an exit will occur in the next 12 months. If someone could explain where the exit is, I would be delighted.
I can understand Scansource and AppDirect buying agencies to get closer to the customer, neither TSB has a deep understanding of the channel.
“Telarus has an expanding range of technology to put in front of customers. The harder task, according to CEO Adam Edwards, is developing enough advisors who can sell it effectively.” I don’t see the channel growing, but both Avant and Telarus say they recruit partners. Edwards said Telarus is bringing on approximately 1,700 new partners a year. How many actually sell a deal, we don’t know.
The TSBs were originally TA focused, then the shift went to recruiting VARs – even the channel events embraced this move. Now the focus is MSPs. TAs accounted for 76% of TSDs’ gross billings in 2024, but value-added resellers and managed service providers accounted for 12% and 7%, respectively. Moreover, the smaller VAR subset often drives the most revenue per deal, making them strategic yet elusive targets for TSD sales teams. [source]
There are legitimate reasons why the VARs and MSPs are hard nut to crack and it goes back to the business model. But that’s a story for another day.
“Dimas said Telarus has dedicated resources to helping newly signed advisors understand the next action to take, the training available and the people who can support a deal. She also described AI education that has moved beyond terminology toward discovery questions, customer conversations and practical sales support.”
To really bring partners along there has to be structured training. MBA classes have done a poor job of teaching sales. Have the TSBs developed an LMS system or a training platform that is effectively developing newbies? Or are they relying on AI?
At CVX Expo, we provide great content for partners to add knowledge and sales tips – and I know how much effort and diligence goes into creating that content. I have trained over 1000 channel managers, partners and sales reps. I don’t think AI videos are going to replace a half day with me or Dale Carnegie.
At one point, the TSBs were adding a ton of vendors/suppliers. Data showed that upwards of 85% of deals were with the top 15 suppliers – AT&T, Verizon, Charter, Comcast, Lumen, Cox, Frontier, Uniti/WIND, Altice/Optimum, Zayo, Brightspeed, Breezeline, Fidum, Zoom, RingCentral.
“That returns the strategy to Edwards’ central concern. Adding suppliers expands the portfolio, but a broader portfolio does not automatically create a broader advisory practice. Partners need customer access, confidence, time and delivery support to turn available services into revenue.” In other words, most of the suppliers didn’t see a deal, so it was wasted effort to onboard and manage these relationships.
The Telarus Trends report derives much of its data from its top partners. It makes me wonder what the 80% of partners will be dealing with. Partners already see the musical chairs and other changes at the TSBs. AppDirect has been hiring partner managers in Latin America!
There is a fundamental foundation to the channel that most people want to paint over, but it is why we are at this crossroads. Historically, the channel was built to supply demand that vendors – Cisco, Microsoft and the ILECs – created in the SMB market. The channel has traditionally been about pushing product on SMB. The tech has always been the product: UCaaS, POTS, PRI, broadband, 5G and integrated T1.
This sales force was motivated by transactional sales and getting ink and getting paid. That is a match for small business.
There are 2 very distinct markets: enterprise and SMB. PE, suppliers and TSBs want more of the Enterprise pie. That’s great, but no one wants to hire salaried sales rep to chase that business. The average B2B buying cycle runs over ten months – and have 5-12 decision makers involved. This is non-transactional. This is not what a majority of partners are comfortable with.
There are different types of sales people: farmers, hunters, whales. Motivation is different. Skills are different.
You cannot take a transactional seller and force them to handle a 10-month sales cycle with 5 decision makers. They enjoy closing quick and moving on to the next kill. They are motivated by ink. Follow up is nil.
Follow up is so difficult that while 80% of sales require follow up, half (44%) of sales reps give up after one follow-up! 92% of reps quit after four calls or rejections. And these are PAID sales reps. Imagine if they surveyed commission only sales reps?
Buyers indicate that AI, CX and Cyber are main topics. Partners are not equipped with technical acumen and sales skills for solution selling to meet those needs.
“Telarus has an expanding range of technology to put in front of customers. The harder task, according to CEO Adam Edwards, is developing enough advisors who can sell it effectively.” This takes us back to the training problem.
The issue everyone avoids is on commission only sales, how do you motivate partners to learn the tech and the sales skills? The vendors have added a bunch of certificates around AI. Colleges have been capitalizing on AI with certificates as well. Understanding what RAG is and how to prompt isn’t going to help you SELL an AI project.
It is a whole other skill set to push product – POTS, PRI, broadband, 5G – that can close in two meetings than it is to ask probing questions during a needs analysis and figure out the decision makers and the budget cycle. This is why companies hire sales teams. In fact, there are numerous types of sales positions: inside, outside/field, enterprise, midmarket, small business, customer success, retention – and vendors want to rely on the channel to replace that apparatus – on an outcome based rewards system that they steadily change.