Across the technology ecosystem, a persistent, and increasingly problematic, obsession with top-line revenue continues to dominate the conversation. It’s a legacy mindset, rooted in traditional channel models where volume, rebates, and resell margins defined success. But in today’s world of cloud platforms, marketplaces, SaaS solutions, and interconnected services, that mindset is not just outdated — it’s actively distorting how vendors engage with partners.
The reality is simple: value drives profit margin. Revenue is secondary.
Smart partners already know this. They prioritize profitability, customer outcomes, and solution relevance. They understand that a $20 million partner business with 10% profit margin is far more sustainable than a $100 million partner business scraping by on 1% profit margin. Yet many vendors continue to celebrate inflated revenue optics, often without empathy or understanding of the complex financial mechanics that underpin those numbers.
The danger of revenue aggregation
In an ecosystem model, a single customer spend of $X might touch:
- A services-led partner or MSP
- A cloud marketplace
- An ISV
- A distributor
- A hyperscaler platform
- A subcontractor or specialist integrator
Each entity may report revenue from that same transaction. The result? Massive inflation of ecosystem revenue totals — with no deduplication. The same dollar is counted multiple times across the ecosystem. It’s a mirage of scale that masks the real question: who is delivering value, and who is capturing margin?
Those who glamourize big numbers through aggregation — without acknowledging the complexity of transaction flows, margin splits, and service overlays — risk misleading the market. Worse, they risk misguiding their own partner strategies. In an increasingly AI-, cloud-, and marketplace-centric landscape, understanding how revenue is earned, shared, and sustained is far more important than how much is reported.
Who are partners really working for?
Revenue matters – especially to vendors. A partner that drives increased consumption and revenue from a customer is doing exactly what vendors want. And that’s fine – as long as it’s in the best interests of the customer.
But every partner must strike a balance. Are they working for the benefit of the vendors in their portfolio, or for the customers they serve? That’s a tightrope. And not everyone has the balance right.
Partners who prioritize vendor incentives over customer outcomes risk losing trust, relevance, and long-term opportunity. The most successful partners are those who align vendor goals with customer value, not the other way around.
What vendors should do differently
Vendors must evolve how they measure and support partner success. That means:
- Moving beyond transactional metrics to focus on customer success, lifecycle engagement, and solution impact
- Recognizing services-led and IP-driven partners as strategic influencers, not just resellers
- Understanding profit margin mechanics across the ecosystem — and designing programs that reward value creation, not just volume
- Avoiding one-size-fits-all partner models that fail to reflect the diversity of partner roles in AI, cloud, and vertical solutions
What partners should do differently
Partners must also rethink how they define success and where they focus their energy. That means:
- Prioritizing profitability over volume — chasing real profit margin, not just top-line growth
- Investing in services, integration, and vertical expertise to stay relevant in complex solution environments
- Building trust with customers by aligning technology choices to business outcomes, not vendor incentives
- Understanding their role in the ecosystem — not just as resellers, but as orchestrators of value across multiple partners and entities
The partners who thrive in this environment are those who:
- Lead with customer success and lifecycle engagement
- Build vertical-specific solutions with real-world impact
- Understand how to navigate and influence multi-vendor, multi-platform ecosystems
- Know when to say no — to deals, incentives, or programs that don’t serve their long-term strategy
IDC’s ecosystem lens
IDC’s ecosystem research focuses on value creation, margin capture, and strategic influence. We analyze how partners orchestrate outcomes, how they align with customer buying journeys, and how they evolve their business models to stay relevant. You can find more information here.
Stuart and Andreas recently presented a webcast, The New Partner Playbook: Ecosystem-Led Growth in EMEA, which you can find here.
If you have any further questions, drop them in the form here.