Key Insights from the $16.6bn Technology Services Distribution (TSD) market

This blog analyzes the often overlooked and misunderstood technology services distribution (TSD) market. Our research shows that the 2024 TSD market hit $16.6B in gross billings (+14.5% YoY) across the IT and telco channel, with the top six TSDs owning 72.3% share and growing 13.4% YoY. Connectivity sales were prevalent but grew slower than cloud/colo, cybersecurity, and UC/CCaaS solutions. As the market matures TSDs must optimize partner mix, expand MSP and VAR partnerships, to lift average contract value (ACV); and increase retention rates of tech advisors by improving enablement support. Venture capital and private equity investments are reshaping execution strategies by prompting partner tiering, supplier pruning, and improved data/AI internal tools. Although coverage of the TSD industry is limited today, given it mainly consists of private organizations, we have uncovered key aspects of the market.

The technology services distribution (TSD) market is undergoing transformative growth, fueled by innovation, strategic investments, and evolving partner dynamics. For IT and telco suppliers and channel partners, understanding the market’s trajectory and key players is essential to capitalize on emerging opportunities.

Market overview: Growth, scale, and dominance

The TSD market demonstrated notable growth in calendar year 2024, reaching $16.6bn in gross billings, a 14.5% year-on-year increase. This growth underscores the market’s resilience and the durable demand for recurring revenue streams. The top six TSDs - Telarus, Intelisys, AVANT Communications, AppDirect, Sandler Partners, and BridgePointe - are shaping the market with their strategic initiatives and innovative solutions. These firms dominate the landscape, controlling 72.3% of the market share and achieving a combined growth rate of 13.4% in 2024.

Other TSDs analyzed in the report include ACS Cloud, Clarus Communications, Global Telecom Solutions (GTS), Hyperion Partners, Innovative Business Solutions, Jenne, Inc., Liquid Networx, MORUGA, P2 Telecom, TD SYNNEX, and XCV Partners.

Key growth drivers

1. Portfolio shifts: While connectivity and networking remain the largest contributors to gross billings, their growth has slowed due to saturated bases and price pressures. In contrast, cloud/colo, cybersecurity, and CX (AI-enhanced UC/CCaaS) solutions are driving faster growth, fueled by demand for workload migration, secure networks, and regulatory compliance.

2. Capital investments: Rising venture capital and private equity investments are increasing visibility and ROI expectations. These investments are driving tighter partner tiering, supplier pruning, and innovation in enablement tools.

3. Partner-mix optimization: Tech advisors represent 86% of partner types but often drive smaller contracts. Expanding partnerships with VARs (7%) and MSPs (4%), which deliver higher average contract values, will enhance client bundling, wallet share, and retention.

TSD market S.W.O.T.

Strengths

• Channel network and partner base (especially advisors/agents).
• Supplier offerings in connectivity, voice communications (fixed and cloud: UCaaS), network, and cloud/colo services.
• Enablement (sales, marketing, training) and support services.
• Market and technology expertise, i.e., solution engineers.

Weaknesses

• Major hyperscaler cloud and AI (Gen/Agentic) services unavailable.
• Slow growth and low profit offerings.
• Constant market consolidation (i.e., M&A and private equity).
• Advanced services delivery, i.e., managed, integration, network (NoC), security (SoC).
• Global reach primarily operates in the NA region (limited international presence).

Opportunities

• Advanced comm., connectivity and networking: UCaaS/CCaaS (w/ AI), SD-WAN; 5G FWA, edge computing, satellite.
• Non-connectivity: Cybersecurity, cloud, AI, and managed services.
• New distribution platforms, i.e., digital marketplaces and hyperscaler marketplace alliances (DSOR, private offers).

Threats

• Waning distribution roles and value prop.
• Hyperscaler marketplaces competition.
• Modern IT vendor partner programs, i.e., value-based point systems.
• Consortium agencies and other partners that negotiate directly with vendors.
• Partner diversity given heavy agent mix.

Top six gross billings by partner type

Observations
• Tech advisors (86% of partner types) are specialists in connectivity and UC services; both are core services in TSD portfolios.
• VARs and MSPs (7% and 4% of partner types) have higher revenue per partner ratios through offering broader solution stacks with larger total contract values.

Obstacles
• Tech advisors: Lower average deal size and narrower solution scopes. TSDs’ heavy dependence on them creates vulnerabilities from potential advisor attrition.
• VARs and MSPs: Low representation limits the ability to tap into broader market segments. Most TSD portals, compensation, and processes are based on referral commissions, rather than SKU-level quoting, service orchestration, or PSA/RMM integration, which requires longer onboarding times.

Top six gross billings by solution type

Observations
• Connectivity and networking: Dominate share but are growing slowly, due to a large legacy base, price compression, and heavy renewals dependence.
• Cloud/colo and cybersecurity: Lead growth from smaller shares, driven by rising demand for workload migration, multi-clouds, secure networks, and regulatory compliance.
• CX (UC/CCaaS): Benefiting from intelligent, AI-integrated solutions (virtual agents/assistants), and increased connectivity bundling.

Obstacles
• Mix: Heavy concentration in low-growth connectivity exposes margin compression, rate declines, and slower revenue expansion.
• Competition: Cloud marketplace procurements make it cheaper to buy SaaS-delivered services like UC/CaaS and cybersecurity.
• Modernization: Suppliers updating program incentives based on full-service offerings, not just point-of-sale, prevalent in the TSD market.

Notable company announcements – Top six

Telarus: $2.9bn (+11% YoY) gross billings in CY2024
• March 2025: Launched Telarus Hub, a business management platform designed to improve partner engagements by qualifying technologies, education, and other support.
• June 2024: Released AI Quick Solution Assessment (QSA) module for its SolutionVue platform to give advisors self-guided discovery for customers for AI-based solutions.
• December 2020: Received equity investment from Columbia Capital to fuel its growth and provide better experiences for partners and suppliers.
• M&A: Made several acquisitions, including Americomm in 2023; Telecom Consulting Group (TCG) and TelAdvocate Communications in 2022; Chorus Communications and Comtel Communications in 2021.

Intelisys: $2.7bn (+4.5% YoY)
• June 2025: Integrated its Partner Success team and core partner operations to improve efficiency, scalability, and accuracy for Intelisys partners, and streamlining ordering, quoting, and commissions in one platform.
• November 2024: Announced Channel Exchange marketplace to streamline sales processes and access a curated, comprehensive catalog of SaaS technology solutions.
• August 2016: Acquired by ScanSource for nearly $83.6m, plus payments based on a multiple of EBITDA over the next four years, which could range from $100m–$150m.
• M&A: Its parent company, ScanSource, acquired Resourcive, a technology advisor firm, and Advantix, a VAR-focused managed connectivity provider, in 2024.

AVANT Communications: $2.1bn (+19.5% YoY)
• June 2025: Received a new investment from Court Square Capital Partners, plus reinvestment from Pamlico Capital, a current investor that originally invested in 2021.
• November 2024: Launched Commissions, a feature within its Pathfinder platform to provide live commissions visibility, automated financial intelligence, and decision-making tools.
• May 2024: Merged its Vendor Engagement and Sales Engineering (SE) groups to create its Technology Enablement team. The new organization prioritizes vendor strategy, technical training, partner engagement, and market expansion.
• M&A: Made several acquisitions, including CX Effect, a specialty TSD, in 2024; and PlanetOne and SENTIENT, its AI-powered partner enablement platform, in 2022.

AppDirect: $2.0bn (+12.0% YoY)
• October 2025: Attained AWS Advanced Tier Services Partner status, providing advisors and customers with access to AWS expertise and support.
• July 2025: Launched its AI-led everything store for B2B procurement and revealed devs.ai, its agentic AI platform and marketplace.
• May 2024: Secured $100m in funding from global investment group CDPQ to support financing through the AppDirect Capital Invest program, following an initial $80m financing from CDPQ in 2021.
• M&A: Made several acquisitions, including Tackle.io, NXTSYS, DNE Resources, BOX, and vCOM in 2025; Firstbase and Builtfirst in 2024; ADCom Solutions and TBI in 2023.

Sandler Partners: $1.4bn (+23.4% YoY)
• July 2025: Ultatel’s suite of UC/CCaaS solutions was made available through Sandler Partners’ network.
• February to March 2025: Added the ability to generate instant contracts with SCOUT Connectivity tool for both coax and dedicated fiber from Cox Business; Enterprise Fiber (DFI, SDFI, MNE, and ENE) from Spectrum Business, and Dedicated Fiber (DIA) from Lumen.
• November 2023: Established an agreement with Pax8 to give partners more cybersecurity and cloud software offerings from its marketplace.
• M&A: Acquired X4 Solutions, a TSD competitor, in 2017.

BridgePointe Technologies: $755m (+32.0% YoY)
• July 2025: Reached investments of over $200m by entering into 48 strategic partnerships, with funding support from Charlesbank Capital Partners as part of its Equity Partner Program, which launched in 2022 to reward top strategists with capital and long-term partnerships.
• January 2022: Charlesbank Capital Partners invested over $100m in BridgePointe to fuel continued growth.
• M&A: Parallel Technologies, powered by BridgePointe and BSB Communications, merged in 2025; made a strategic investment in Parallel Technologies in 2023; acquired PPT Solutions and Cannon Group in 2022; and Clover Communications in 2021.

Notable Company Announcements – Others

• ACS Cloud Partners: Launched ACS Automotive for auto industry consultants and won Channel Programs of the Year by ChannelVision Magazine (2025).
• Global Telecom Solutions (GTS): Acquired AMT Telecom Group, a Master Agent based in Michigan and serving the Midwest (2025).
• P2 Telecom: Established reseller agreement with Coro Security and will take on the billing process on behalf of the vendor (2025).
• Liquid Networx: Awarded Fortinet’s Unified SASE Partner of the Year (2025).
• Hyperion Partners: Acquired by MAI Capital Management investment firm; Hyperion had $528.8m in client assets under management when the announcement occurred (2024).
• XCV Partners: Launched under the leadership of Doug Tolley and Roger Blohm, two former leaders at VXsuite and Telarus (2023).
• Clarus Communications: Merged with Datatel Solutions, expanding its presence in many western states (2023).
• Jenne, Inc.: Honored as America’s Distributor of the Year by Extreme Networks (2022).
• MORUGA: Acquired Venicom’s MSP and master agency assets (2021).
• TD SYNNEX: Formed TSD-agency group, with primary focus on VARs serving state, local, and education (SLED) industries (2021).
• Innovative Business Solutions: Launched CableFinder, a cable servicing tool that enabled multi-site searches for cable, fiber, and broadband serviceability (2019).

Most useful TSD enablement tools and resources

Enablement tools and resources are essential for TSDs to offer and support their partners’ selling of supplier solutions, but they are not all created equal. Technology advisors’ sentiments show that the TSD resources most useful when closing customer deals are:

• Quoting/pricing: Helps convert pipeline to bookings, protects margin, and shortens sales cycles.
• Back-office/commissions: Supports order-to-cash tracking, timely payouts, and incentives alignment.
• Vendor research/vetting: Reduces vendor-partner risks, standardizes SLAs, and lessens due diligence time.
• Post-sale vendor escalation: Provides escalation paths and conflict-resolution support.
• Customer-facing sales engagement: Improves customer retention and acquisitions via deal desks and solution engineer (SE) support.
• Marketing support: Offers demand-gen support via campaigns, supplier content libraries, MDF programs, webinars, and conferences/events.

Conclusion

The TSD market is poised for continued growth, driven by innovation, strategic investments, and evolving partner dynamics. For IT and telco suppliers, aligning with top TSDs and leveraging emerging opportunities in cloud, cybersecurity, and CX solutions will be critical to success. By addressing challenges and capitalizing on opportunities, suppliers can position themselves for sustained growth in this dynamic market.