Everyone knows that SaaS killed traditional software. What is less understood is that SaaS also broke the traditional channel model.
ISVs moved to SaaS for recurring revenue. The same dynamic played out for channel partners. As partners built up their customer base and their own recurring revenue, they made a rational economic calculation: reinvesting in a new-business motion is expensive and risky, while collecting 30 to 50% margins on an established customer base is highly profitable. The math is not complicated. It favors staying comfortable.
The result is a partner ecosystem that looks roughly like this for most ISVs:
- 70 to 80% Longtail — partners in name only, generating a deal every year or two when an opportunity walks in the door. Buried inside this group are Diamonds in the Rough: partners whose existing customer bases are perfectly aligned to the ISV's ICP, and no one has ever thought to activate them.
- 10 to 20% Farmers — partners who built a solid revenue base and stopped investing in net-new logos. They have the capability and the relationships. They have simply concluded it is more profitable to collect than to hunt. Some are recoverable with the right incentive. Others have quietly made your competitor their primary product. The margin keeps flowing. The net-new revenue stopped years ago.
- 5% Champions — the partners still earning everything they receive, still bringing new logos, still investing in the relationship. Worth protecting at any cost.
The response most ISVs reach for is a margin reclamation: reduce tier benefits for non-performers, claw back unearned co-fund, tighten the criteria. This is the meat-cleaver approach. It moves money on a spreadsheet. It creates partner resentment. It does not change partner behavior. And your valuation is not tied to margin recovery. It is tied to net-new ARR growth.
The real unlock is different. Inside your partner base right now are partners whose existing customers should be buying your solution. Those customers are already in a trusted relationship with the partner. For the ISV, every one is a net-new logo opportunity, sitting untouched inside a relationship the partner already owns. The question is why partners are not presenting your solution to them.
Part of the answer is the rational economic calculation above. But there is a second force reinforcing it, and I have watched it play out inside every ISV I have worked with over 30 years. The people managing these programs do not stay. The average channel chief lasts about two years. The average PAM, 15 to 18 months. Every departure takes with it the relationship context, the strategic rationale, the knowledge of which partners have the right relationships for which conversations. The incoming leader starts over. The program resets.
Partners experience this disruption from the other side. The PAM who knew their business, who would have supported the sales cycle, who understood which of their customers were the right targets, is gone. A new one arrives with no context. Six months later the VP of Channels changes and the rules shift again. A partner considering presenting your solution to their best customer does the rational calculation: will the ISV support us through an eight-month sales cycle, given two channel chiefs in three years? The answer shapes their behavior. They stop hunting. Not because they got lazy. Because the program gave them every reason to stay comfortable.
I have spent 30 years inside this problem, across hundreds of ISVs from more than 20 countries. I know how to identify which partners have the relationships to drive net-new growth. I know how to structure a co-investment model that changes partner behavior. I know how to build a program that holds its context when the people change. That is why I built ChannelPROS.
And I made a deliberate decision to encode all of it into a platform rather than a consulting methodology. Because channel leaders should not need a 30-year consultant to tell them which partners to call on Monday morning. The intelligence is in the platform. The RAP framework is in the platform. The organizational memory is in the platform. You are running software, not starting a transformation program that depends on someone carrying it in their head.
I am so confident in what it can do that our primary business model is based on revenue sharing. If ChannelPROS does not drive more revenue for you, it costs you nothing. Wouldn't it be great if your partners felt the same way about their relationship with you?