Sage’s 2025 Channel predictions

Juha Harkonen – VP Commercial Partners - Industry predictions FY25

1. What top three trends do you see shaping the channel in 2025? How should channel companies prepare to leverage these trends?

Looking ahead to 2025, three pivotal trends are set to significantly shape the channel landscape. Firstly, the rise of AI and automation is driving increased demand for expertise. Channel companies should invest in developing capabilities in these areas to meet growing customer needs, positioning themselves as knowledgeable partners who can effectively integrate these technologies into clients' businesses.

Secondly, pricing and packaging innovation is moving towards suites and modular add-on services. Resellers are increasingly expected to help customers architect their business solutions map to drive the right commercial outcomes. By offering comprehensive solutions and acting as strategic advisors, channel companies can enhance their value proposition and better meet evolving customer demands.

Thirdly, the dominance of cloud computing continues to transform the industry. Resellers need to gear their businesses around subscription annuities and amplify subscription services through robust customer success functions. Embracing the cloud model requires a shift towards recurring revenue streams and a focus on long-term customer relationships.

Supporting all these trends, customer support plays an elevated role in maximising value for customers, driving stickiness, adoption, and consumption. By enhancing customer support services, channel companies can ensure clients fully utilise the solutions provided, leading to higher satisfaction and loyalty.

2. What are the biggest challenges for the channel in 2025? How can channel companies navigate these obstacles to maintain their competitive edge?

In 2025, the channel faces several significant challenges that require strategic action to maintain a competitive edge. One of the foremost challenges is rising customer expectations. A new generation of resellers is emerging, aligning with the intelligent network ERP paradigm to meet these heightened expectations. Current resellers need to quickly launch incubation teams that are geared differently to align with new commercial structures and evolving customer journey and relationship realities. By adapting their teams and strategies, resellers can stay relevant and meet the sophisticated demands of modern customers.

Another major challenge is the shortage of resources and rising labour costs. Publishers are rapidly upskilling their teams, and resellers should capitalise on these efforts by participating in publishers' programmes to upskill alongside them. By tapping into these initiatives, resellers can enhance their capabilities and mitigate resource constraints without bearing the full burden of training costs.

The speed of technological advancement also presents a significant obstacle. Moore’s Law dictates that as our capacity to compute increases exponentially, the pace of technological innovation accelerates. Recent developments like the explosive impact of generative AI have rapidly transformed the market. Resellers need to make proactive investments to keep pace with this acceleration by leveraging partner advisory councils, innovation laboratories, hackathons, conferences, and other collaborative forums provided by publishers. Publishers, in turn, need to double down on creating vibrant communities focused on innovation to support their reseller networks.

Finally, regulatory compliance is an evolving challenge. Regulations are striving to keep up with technological advancements, with new mandates emerging in areas like e-invoicing, sustainability reporting requirements, and crypto asset accounting standards. Resellers must stay abreast of these regulatory trends to effectively advise their customers. By being informed and proactive about compliance requirements, resellers can position themselves as trusted advisors and help their clients navigate the complex regulatory landscape.

3. What are the biggest opportunities for the channel in 2025? How can channel companies position themselves to capitalise on these opportunities effectively?

In 2025, significant opportunities await the channel, and capitalising on them requires strategic focus. One major opportunity is the emergence of Copilot as a new class of user interface, which will democratise access and participation in Financial Applications (FA) and Enterprise Resource Planning (ERP) systems. While automation efficiencies have led to a decline in user counts over the past few years, the advent of Copilot and the expansion of suites into adjacent functional areas are expected to cause a resurgence of the user as a conduit of value exchange. Channel companies should embrace Copilot technologies to enhance user engagement and offer more accessible solutions to clients.

Additionally, Recurring Revenue per Base Value (RRbv) and Net Revenue Retention (NRR) are becoming paramount. With increasing network interconnectivity and extensibility, resellers have the opportunity to help customers solve a wider range of business needs. As value shifts from subscription models to consumption-based models, resellers need to gear up to maximise their participation in this evolving landscape. By focusing on consumption metrics and delivering ongoing value, resellers can enhance customer loyalty and revenue streams.

Furthermore, hyper-verticalisation presents a key opportunity. Rising customer expectations have increased the value placed on vertical expertise. The ability to architect and configure bespoke, composable solutions is critical for differentiation and unlocking higher value with customers. Channel companies should specialise in specific industries or sectors to provide tailored solutions that meet unique customer needs.

With this specialisation comes a hyper-focus on hero solutions. We will see publishers and resellers innovate around hybrid go-to-market strategies to speed time to value. Resellers that try to be everything to everyone risk becoming nothing to anyone. Therefore, focusing on core strengths and signature offerings will be essential. By specialising and partnering strategically, channel companies can position themselves to capitalise effectively on these opportunities, driving growth and meeting the evolving demands of the market.

Sippora Veen – VP Global Partner Marketing - Industry predictions FY25

1. What top three trends do you see shaping the channel in 2025? How should channel companies prepare to leverage these trends?

As we approach 2025, the channel landscape is being reshaped by several pivotal trends. Firstly, industry consolidation continues at a rapid pace. In our own ecosystem, numerous partners have taken majority stakes in others or acquired them outright. This consolidation is altering competitive dynamics, and channel companies should consider strategic mergers or collaborations to strengthen their market position and broaden their capabilities.

Secondly, partners are seeking greater flexibility in their vendor relationships. While joining large global vendor ecosystems was once appealing, many partners now prefer to be a significant player in a smaller network. This shift allows for more meaningful relationships, increased flexibility, joint investments, and a deeper understanding of each other's business models. Channel companies should cultivate closer, more collaborative partnerships with vendors that align closely with their strategic objectives.

Thirdly, customer expectations around AI are driving increased demand for practical applications that businesses often struggle to implement due to a growing skills gap. This scenario creates a significant need for services and solutions from partners. Channel companies should invest in developing AI expertise and services to meet this demand, helping customers leverage AI technologies effectively while bridging the skills shortage.

Additionally, partners are transitioning towards a more advisory role. As technology becomes more complex and businesses seek strategic guidance, partners are moving beyond traditional reselling to provide consultative services and act as trusted advisors. By offering insights into technology trends, assisting clients in developing IT strategies, and providing tailored solutions, partners can deepen client relationships and differentiate themselves in the market. Channel companies should focus on building advisory capabilities and positioning themselves as strategic partners to their clients.

To leverage these trends, channel companies need to be agile and proactive: embracing consolidation opportunities, fostering flexible vendor relationships, investing in AI competencies, and enhancing their advisory services. This strategic approach will enable them to meet evolving customer needs and maintain a competitive edge.

2. What are the biggest challenges for the channel in 2025, and how can channel companies navigate these obstacles to maintain their competitive edge?

In 2025, the channel faces significant challenges that require strategic action to maintain a competitive edge. One of the foremost challenges is finding and maintaining talent. Investing in recruiting, fostering, and developing in-house talent is crucial. Channel companies need to prioritise talent development programmes, create attractive career paths, and foster a supportive culture to retain skilled professionals. Collaborating with tech vendors can also help identify potential acquisition targets, bolstering talent pools and bringing in new expertise.

Another major challenge is continuing to develop services and solutions around customer demand for AI while managing customer expectations about what is realistically achievable.

As AI technology advances rapidly, customers have increasing expectations for practical applications that can enhance their businesses. However, a growing IT skills gap makes it difficult for many organisations to implement AI solutions effectively. Channel companies must innovate and expand their AI offerings to meet customer demand and stay ahead of technological advancements. At the same time, they should engage in transparent communication with customers regarding AI capabilities, helping them understand what is feasible and aligning solutions with their needs.

By focusing on talent management, customer education, and innovation in AI services, channel companies can navigate these obstacles and maintain their competitive edge. Proactively addressing talent shortages through recruitment, development, and retention strategies—and considering strategic acquisitions—will build a skilled workforce capable of delivering advanced solutions. Managing customer expectations effectively by setting clear expectations and delivering effective solutions will build trust and loyalty.

3. What are the biggest opportunities for the channel in 2025, and how can channel companies position themselves to capitalise on these opportunities effectively? What role will technology play in helping channel partners engage customers more effectively and meet their expectations?

In 2025, technology presents the most significant opportunities for the channel, enabling partners to engage customers more effectively and meet their evolving expectations. Customers are becoming increasingly savvy about what technology can achieve for their businesses. They demand that technologies—especially AI—be delivered in a consumable way that meaningfully impacts their operations. At the same time, there is a rapidly growing IT skills gap, which poses a challenge but also an opportunity for channel partners.

Partners are uniquely positioned to identify specific IT skills gaps within their customers' organisations. By offering service-led solutions that provide the necessary knowledge and insights, they can help clients handle critical tasks essential for meeting organisational objectives and demands. This approach not only addresses the skills shortage but also enhances the partner's value proposition and strengthens relationships with their SMB customers.

To capitalise on these opportunities effectively, channel companies should invest in developing expertise in high-demand areas like AI, creating technology offerings that are easily adoptable and deliver tangible business benefits. By focusing on delivering meaningful impacts on clients' ways of working, partners can exceed customer expectations and solidify their position in an evolving technological landscape. Embracing this role enables channel partners to bridge the gap between technological potential and practical implementation, ensuring mutual success.