Everyone knows that SaaS killed traditional software. What is less understood is that SaaS also killed the traditional channel model.
ISVs moved to SaaS for one simple reason: recurring revenues. With traditional software, they had to recreate their revenue stream every year — which meant investing heavily in sales and marketing to find new customers.
The same dynamic played out for channel partners. As partners built up their customer base and their own recurring revenues, they became less and less motivated to invest in driving net-new logos. Many ISVs have long-time partners who truly earned their margins and Gold status as they built up their revenues — and then quietly realized it was more profitable to cash in the 30–50% margins their ISV was paying them than to reinvest in sales and marketing to go find new customers.
The result is a partner ecosystem that looks roughly like this for most ISVs:
- 70–80% Longtail — partners in name only, generating a deal every year or two when an opportunity walks in the door
- 10–20% Farmers — partners who built up a solid revenue base and stopped investing in net-new logos. Some are recoverable: they have the relationships and the capability, but no one has ever held them accountable. Others have become Zombies — partners who moved in a different product direction, pivoted to a vertical you don't serve, or quietly made your competitor their lead product. The margin keeps flowing. The net-new revenue stopped years ago.
- 5% Champions — the partners still earning everything they receive
I have spent 30 years inside this problem — across hundreds of ISVs from more than 20 countries. I have sat in boardrooms with channel leaders who pull up their partner list and go quiet. They are doing more for their partners than their partners are doing for them. They can see the revenue potential sitting dormant across that vast partner base. They just don't have the tools to unlock it.
I know what it takes to make partners more productive. I know how to structure margins properly — and how to claw them back when partners stop earning them. That is why I built ChannelPROS™.
It applies everything I have learned about building, activating, and maintaining partner ecosystems — distilled into a platform that gives ISVs the intelligence and the leverage they have never had before.
And I am so confident in what it can do that our primary business model is based on revenue sharing. If ChannelPROS™ doesn't drive more revenues for you, it costs you nothing.