Research from Omdia indicates that the Technology Services Distribution (TSD) market achieved total billings of $16.6 billion through IT and telecom channels in 2024, representing a 14.5% increase year-over-year. The top six TSD firms collectively command 72.3% of the market share and posted a combined growth rate of 13.4%. Connectivity sales continue to dominate the landscape, yet their expansion pace is being outpaced by cloud/colocation, cybersecurity, and UC/CCaaS solutions. As the market matures, TSDs must refine their partner portfolios and broaden collaborations with Managed Service Providers (MSPs) and Value-Added Resellers (VARs) to elevate Average Contract Values (ACV); enhancing enablement support is also critical for improving the retention rates of technology advisors. Venture capital and private equity investments are reshaping execution strategies, driving initiatives like partner tiering, supplier optimization, and the development of more sophisticated internal data/AI tools. The TSD market is undergoing a transformative growth phase fueled by innovation, strategic investment, and evolving partner dynamics. For IT and telecom vendors and channel partners, grasping the market's trajectory and key players is essential for capitalizing on future opportunities.
The market overview for 2024 reveals impressive performance, with total billings reaching $16.6 billion, a 14.5% surge compared to the previous year. This growth underscores the market's resilience and the sustained demand for recurring revenue models. The leading six TSDs—Telarus, Intelisys, AVANT Communications, AppDirect, Sandler Partners, and BridgePointe—are actively shaping the industry through strategic positioning and innovative solutions. These entities hold a 72.3% market share and collectively grew by 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 are identified as portfolio shifts, capital investments, and partner-mix optimization. While connectivity and networking remain the largest contributors to total billings, their growth has decelerated due to market saturation and pricing pressures. In contrast, cloud/colocation services, cybersecurity, and customer experience (CX) solutions—including AI-enhanced UC/CCaaS—are expanding more rapidly, propelled by workload migration, security demands, and compliance requirements. An increase in venture capital and private equity has heightened market visibility and expectations for returns on investment; this capital influx encourages stricter partner tiering, supplier pruning, and innovation in enablement tools. Although technology advisors constitute 86% of partner types, their deal sizes are typically smaller. Expanding collaborations with VARs (7%) and MSPs (4%) is expected to boost ACV, enhance solution bundling capabilities, increase customer wallet share, and improve retention rates.
A SWOT analysis of the TSD market highlights several factors. Strengths include extensive channel networks and partner bases (particularly advisors/agents), robust vendor product capabilities in connectivity, voice communications, networking, and cloud/colocation services, along with strong enablement and support services, and deep market/technical expertise from solutions engineers. Weaknesses involve a notable absence of major hyperscale cloud and AI (generative/intelligent agent) services, slow-growth and low-margin product lines, ongoing market consolidation through M&A and private equity, insufficient capabilities in advanced service delivery (like managed services, systems integration, NOCs, SOCs), and limited global reach, primarily operating in North America. Opportunities lie in advanced communications, connectivity, and networking such as UCaaS/CCaaS with AI, SD-WAN, 5G FWA, edge computing, and satellite communications; non-connectivity services like cybersecurity, cloud, AI, and managed services; and emerging distribution platforms like digital marketplaces and hyperscale cloud market alliances. Threats encompass a potential dilution of the distributor role and value proposition, competition from hyperscale cloud markets, modern IT vendor partner programs (e.g., value-based incentive systems), consortiums and other partners negotiating directly with vendors, and limited partner diversity due to the high proportion of agents.
An examination of total billings by partner type reveals that Technology Advisors, who make up 86% of partners, primarily focus on connectivity and UC services, which are core to TSD portfolios. VARs and MSPs (7% and 4% of partners, respectively) achieve higher revenue per partner by offering broader solution stacks and larger total contract values. A significant hurdle for Technology Advisors is their relatively low average deal size and limited solution scope; high reliance on them poses a risk if advisors churn. VARs and MSPs are currently underrepresented, limiting market reach; most TSD portals, compensation structures, and processes are based on referral commissions rather than SKU-level quoting, service orchestration, or PSA/RMM integration, which necessitates longer onboarding cycles.
Analysis of total billings by solution shows that Connectivity and Networking hold a dominant market share but are experiencing slow growth, hampered by a large legacy base, price compression, and heavy reliance on renewals. Cloud/Colo and Cybersecurity, though holding smaller shares, are leading in growth, driven by workload migration, multi-cloud environments, secure networking, and rising compliance needs. Customer Experience (CX, UC/CCaaS) is benefiting from intelligent, AI-integrated solutions and increasing bundling with connectivity. The primary impediment is the Market Mix: an over-reliance on slow-growth connectivity risks profit compression, rate declines, and slowed revenue expansion. Competition is also a factor, as cloud marketplace procurement makes services like UC/CaaS and cybersecurity cheaper when purchased as SaaS. Furthermore, vendor incentive programs are modernizing to reward full-service engagements rather than just point-of-sale activities, a practice that is still common in the TSD market.
Notable company announcements from the top six players include Telarus, which reported $2.9 billion in total billings for 2024, an 11% year-over-year increase. In March 2025, it launched Telarus Hub, a business management platform designed to improve partner interaction through technical validation, education, and other support. In June 2024, it released an AI Quick Solution Assessment module for its SolutionVue platform, enabling advisors to conduct self-guided explorations of AI solutions for clients. The company received a private equity investment from Columbia Capital in December 2020 to fuel growth. Its M&A activity includes multiple acquisitions, such as Americomm in 2023; Telecom Consulting Group and TelAdvocate Communications in 2022; and Chorus Communications and Comtel Communications in 2021. Intelisys reported $2.7 billion in billings, up 4.5% year-over-year. In June 2025, it consolidated its partner success and core partner operations to enhance efficiency and streamline ordering and commission processes. In November 2024, it announced the Channel Exchange marketplace to simplify sales. The company was acquired by ScanSource in August 2016 for nearly $83.6 million, plus earn-outs. Parent company ScanSource acquired technology advisor Resourcive and managed connectivity provider Advantix for VARs in 2024.
AVANT Communications achieved $2.1 billion in billings, surging 19.5% year-over-year. In June 2025, it secured new investment from Court Square Capital Partners and reinvestment from existing investor Pamlico Capital. In November 2024, it launched a Commissions feature within its Pathfinder platform. In May 2024, it merged its vendor engagement and sales engineering teams. M&A activity includes the acquisition of CX Effect in 2024 and PlanetOne along with its AI-powered platform SENTIENT in 2022. AppDirect reached $2.0 billion in billings, growing 12.0% year-over-year. In October 2025, it attained AWS Advanced Tier Services Partner status. In July 2025, it launched an AI-driven B2B procurement platform. The company received a $100 million investment from CDPQ in May 2024. Its acquisitions include Tackle.io, NXTSYS, and others in 2025; Firstbase and Builtfirst in 2024; and ADCom Solutions and TBI in 2023.
Sandler Partners reported $1.4 billion in billings, a significant 23.4% year-over-year increase. In July 2025, it made Ultatel's UC/CCaaS solutions available through its network. In February-March 2025, it added instant contract generation to its SCOUT Connectivity tool. In November 2023, it partnered with Pax8. The firm acquired TSD competitor X4 Solutions in 2017. BridgePointe Technologies recorded $755 million in billings, growing 32.0% year-over-year. In July 2025, it announced over $200 million in investments through its equity partner program backed by Charlesbank Capital Partners, which had initially invested over $100 million in January 2022. Its M&A activity includes the 2025 merger of Parallel Technologies, a strategic investment in Parallel Technologies in 2023, and acquisitions of PPT Solutions and Cannon Group in 2022, and Clover Communications in 2021.
Notable announcements from other TSDs include ACS Cloud Partners launching ACS Automotive for the automotive industry and winning an award in 2025. Global Telecom Solutions acquired Master Agent AMT Telecom Group in 2025. P2 Telecom established a reseller agreement with Coro Security in 2025. Liquid Networx won an award from Fortinet in 2025. Hyperion Partners was acquired by MAI Capital Management in 2024. XCV Partners was founded in 2023 by industry veterans. Clarus Communications merged with Datatel Solutions in 2023. Jenne, Inc. was named Distributor of the Year by Extreme Networks in 2022. MORUGA acquired Venicom's assets in 2021. TD SYNNEX formed a TSD-agent group focused on SLED VARs in 2021. Innovative Business Solutions launched CableFinder in 2019.
The most useful TSD enablement tools and resources are vital for helping partners sell and support vendor solutions, though their effectiveness varies. Feedback from technology advisors highlights the most valuable resources for closing deals: Quoting/Pricing tools help convert opportunities, protect margins, and shorten sales cycles. Back-office/Commission systems support order-to-cash tracking and ensure timely payments. Vendor Research/Review resources mitigate risk and reduce due diligence time. Post-sale Vendor Escalation provides support paths. Customer-facing Sales Engagement, supported by deal desks and solutions engineers, boosts retention and acquisition. Marketing Support, including MDF programs and content libraries, aids demand generation.
In conclusion, the TSD market is poised for continued growth, driven by innovation, strategic investment, and evolving partner dynamics. For IT and telecom vendors, aligning with top TSDs and capitalizing on emerging opportunities in cloud, cybersecurity, and CX solutions will be crucial for success. By addressing challenges and leveraging opportunities, vendors can lay the foundation for sustained growth in this dynamic landscape.
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