Channels Ecosystem Landscape 2023

What is the Canalys Channels Ecosystem Landscape?

We have developed this "tech stack" research to bring focus to the underlying technologies that will drive competitive advantage for channel and partnership leaders in the decade of the ecosystem. The hundreds of software companies represented in the landscape are providing automation and advanced digital capabilities to help companies design, develop, execute, and manage a broad channel partner and alliance ecosystem.

There are increasing demands on channel leaders to find, recruit, onboard, develop, incentivize, co-sell, co-market, co-innovate, measure, manage and report on partner value at scale. Automation of partner-related workflows, deeper integrations, and data-driven decision-making are creating measurable competitive advantage (through partnerships) and are quickly becoming table stakes in the industry.

Canalys research shows that there are now 233 companies forming the ecosystem software landscape represented here. These companies represented US$5.3 billion in channel category revenue last year (2022). The latest Canalys forecasts show that this channel software market will reach US$11.8 billion in revenue by 2028. This research has expanded into China and work is underway to incorporate more of India and SE Asia as Canalys continues to examine the markets and robustly apply its global research methodology.

Some interesting facts about the 2023 landscape:

There were 37 changes from last year’s landscape – this includes new companies, M&A, companies shutting down or pivoting away, and re-brandings.
We are watching 38 additional startup companies in the channel/ecosystem tech space vying for a spot on next year’s landscape. We look for a minimum of 5 full time employees and a fully shipping product with delighted/recurring customers.
From a revenue perspective, 14 of these companies are driving over $100 million in channel software revenue, and roughly half the list is north of $10 million.
There is not the 80/20 revenue split that you find in most lists. The Fortune-sized companies such as IBM, Oracle, SAP, Salesforce, and Adobe (combined) drive only 13% of the total revenue.
There are 25 companies on the landscape founded in the past 5 years. On the other side of the maturity scale, there are 23 companies over 30 years old. Four of them are over 100 years old! (ACB, Ansira, IBM, and Maritz)
Consistent with other SaaS categories, there was a sizable drop in private equity funding. In 2021, the funding totaled over $3.1 billion, while in 2022 it dropped 75% to $763.4 million. Current year (2023) funding is at $441.8 million by August so is tracking to be similar to 2022.
Given recent HR trends around the great resignation, return to work, and half a million tech layoffs over the past 10 months, the Glassdoor ratings remain unchanged (compared to 18 months ago) with a weighted average 3.866 for these 233 companies. The global average on Glassdoor is 3.3 (according the company itself) so working in the channel tech industry is a better experience overall for these 30,306 workers (Canalys estimate).
Almost two thirds of companies are headquartered in the US. The UK is next with 20 companies, then Canada with 14, then France and Germany with eight each.
Top headquarters cities are San Francisco with 21 companies, London with nine, New York with seven, Boston with six, and Chicago and Paris each with five.

Canalys tracks the channels ecosystem as part of its renowned worldwide Channels Analysis services. We also conduct bespoke projects to help vendors leverage more power from the channel ecosystem. Get in touch with us to find out more.

Canalys Channels Ecosystem Landscape 2023

The Channels Ecosystem Landscape encompasses a group of technologies that help companies develop, design and execute plans to find, recruit, onboard, develop, enable, incentivize, co-sell, co-market, co-innovate, collaborate, manage, measure and report on partners. Software companies providing these technologies deliver automation of indirect sales processes, workflows and partner programs, and are becoming vital to a vendor’s ability to find, win, serve and retain its customers and partners.

The channels ecosystem ‘‘islands’’

Channel data management

Manages channel partner data, including data from points of sale, and inventory and incentive data, from a single data platform that provides actionable insights and streamlines decision-making processes. These automated tools use AI, machine learning and predictive modeling.

Channel finance, pricing and inventory

Governs indirect sales financials, streamlines reporting processes, calculates true transactional values and avoids allocation errors. Optimizes processes involving pricing, demand forecasting, gross-to-net accounting calculations, inventory planning and price adjustments.

Channel incentives management

Helps develop and manage channel incentive programs, spanning allotment, calculation and issuance of performance-based incentives to drive positive behavioral modifications to the partner ecosystem. Common incentives include discounts, rebates, market development funds, co-op funds and sales performance incentive funds.

Channel learning and readiness

Helps partner organizations to train and develop employees through the design and delivery of up-to-date training initiatives and resources, spanning training modules, competencies, certifications, learning management systems, online portals, education tracking and sales enablement tools.

Partner relationship management

Automates various programmatic activities around the management of partner lifecycles. Common features include partner recruitment, onboarding, training, performance-tracking, co-selling, co-marketing, co-innovation, collaboration, enablement and communication. Often seamlessly integrates with existing systems, such as CRM, marketing automation, content management, ERP, payment gateways and collaboration applications.

Through-channel marketing automation

Helps vendors empower their partners to effectively communicate, market and advertise locally while maintaining global brand consistency. Automated platforms provide scale, control and governance that enables partners to generate marketing campaigns using market development funds and proven insights.

Channel Ecosystem Management

This group supports a broad array of partner types, covering influence, transaction, transaction-assist, retention, and technology, strategic and business alliances. Supports the entire customer buying journey and augments marketing, sales, customer success, product and strategy within an organization. Helps facilitate multi-directional relationships and activities with partners across the entire channel ecosystem. Commonly aids in recruitment, visualization, influence, partner attribution, data, account mapping, marketplace, technology integrations, delivering management, measurement, real-time monitoring and orchestration to drive effective go-to-market strategies.

There are five 'islands' within this -

Ecosystem recruitment and visualization - Assists in planning, identifying, targeting and recruiting non-traditional partners to drive the expansion of the channel ecosystem and the total addressable market. Provides actionable go-to-market and route-to-market expansion beyond current buyer, industry, geography, segment, delivery or product boundaries.
Ecosystem influence and attribution - Supports marketing attribution in the post-cookie marketing environment, delivering recognition and incentivization of affiliates, advocates, ambassadors and influencer partners. Helps vendors’ data-driven platforms quantify partner influence and activities and their effect on marketing, sales and retention.
Ecosystem data and mapping - Enables data-sharing opportunities with and between partners in a controlled and secure manner. Automates account mapping to leverage network effects and streamlines collaboration, co-marketing, co-selling, value creation and co-innovation.

Ecosystem marketplace and integrations - Helps B2B-centric organizations with the planning, design and execution of internal and external digital marketplaces to expand market opportunities. Supports changing business models toward subscription and consumption models and provides frictionless execution of customer procurement and provisioning of solutions. Assists in marketplace deployment, storefront customization, API integration and listing support, among other aspects, to streamline the workflows of all stakeholders.
Ecosystem management and orchestration - Automates and simplifies various activities of multi-directional partnerships across the broader channel ecosystem. Supports ecosystem planning, programs, processes and people, including partner onboarding, training and development, co-selling, enablement, collaboration, performance reporting and insights. Often seamlessly integrates with other channel and ecosystem tools.