Tech Data: AI and cybersecurity emerge as key business movers in the Channel

Tech Data’s third Direction of Technology Report for the Asia Pacific region also revealed that partners are expected to focus on collaborative growth in 2025.

Channel partners in the Asia Pacific region will be looking to better navigate their challenges while embracing opportunities for growth in 2025. This was among the findings revealed by Tech Data’s third Direction of Technology Report for the Asia Pacific region.

Consolidating channel partner insights of more than 1,000 technology resellers, systems integrators, service providers, and managed service providers from over 60 countries globally, the TD SYNNEX company highlights expectations for 2025 and beyond within the context of a rapidly evolving technology ecosystem. In the Asia Pacific region, 287 respondents shared these views across business performance and perspectives on current business models.

According to the report, while partners in the region remain challenged by rising competition and tighter margins, they are finding ways to navigate their moves and embrace growth opportunities as well. The report revealed that only 14% of partners expect growth of over 10% this year, down from 37% in 2023.

As such, collaboration in the ecosystem is expected to be an area partners will look into in 2025. Specifically, 44% of partners are focused on collaborative growth with other ecosystem partners. Interestingly, 64% of partners are also looking to broaden their existing offerings and prioritize domestic growth.

Given the demand for managed services in the region, the report also pointed out that partners are becoming increasingly focused on expanding their offerings in managed services and professional services. Managed services in particular are expected to account for 57% of partner business portfolios withing the next three years. Professional services will account for 58%.

At the same time, while AI adoption is reshaping the tech landscape, partners remain committed to prioritize core technologies, especially since they continue to drive revenue. Partners highlighted in the report that networking, endpoint devices, security and servers are top revenue contributors with GenAI debuting as the fifth revenue contributor.

For Jaideep Malhotra, President of TD SYNNEX, Asia Pacific & Japan, a key takeaway from the report is that while partners and the industry are excited to explore the efficiencies and opportunities offered by GenAI, core technologies like networking, security, and endpoint devices remain key revenue drivers that continue to be in focus.

“With our unique position at the center of the IT ecosystem, this report provides a unique snapshot of the core and upcoming segments of technology that partners of today and tomorrow require to achieve profitable growth in the IT channel,” stated Malhotra, who also believes that the report champions the voice of partners in the region.

What partners expect in 2025

Demand for security solutions is expected to be in line with demand for AI, especially with both being interconnected and a priority for organizations in the region. 84% of partners have also mentioned that they are receiving GenAI POC requests, a clear indication that AI adoption continues to accelerate in the region, with customers leading the demand.

Given the increased demand for GenAI POCs, 36% of partners plan to offer AI solutions within the next two years, focusing on GenAI solutions (52%), AI services (48%), and AI-enabled devices (35%), signaling the technology’s critical role in business transformation.

To ensure the use of GenAI remains secure, organizations are also increasing their cybersecurity investments. A top technology priority, 43% of infrastructure-focused partners are planning to offer security solutions in the next 24 months. There is no doubt that cybercriminals are leveraging AI to unleash more sophisticated threats, and this is driving demand for advanced solutions. Partners recognize the critical need to safeguard data integrity while tapping into the lucrative security market.

“The rise of AI has introduced new buzzwords like AI for Security and Security for AI, which are also driving the demand for enhanced cybersecurity solutions. Only by embracing this dual evolution of AI in cybersecurity, partners are positioned to address evolving threats and capitalize on the growing market demand for comprehensive security solutions,” stated the report.

Bridging the talent gap remains an area partners challenged with. They are struggling to fill critical roles in high-growth sectors like AI, security, and cloud. AI skills, in particular, have surged in importance, rising from 15% in 2023 to 27% in 2024. With security (30%), GenAI (27%), and data analytics among the top skills in demand, partners are focusing their hiring strategies in these areas to meet market demands and support future growth.

While AI is capturing all the attention, core technologies are expected to continue to be a key focused. Endpoint devices will see an increasing shift as AI PCs look to play a more prominent role next year, despite market challenges in endpoint devices. Breaking down revenue in 2024, endpoint devices lead technology sales in the region, followed closely by networking and security, with GenAI coming in behind as a growing but secondary focus for partners.