The channel’s human problem: Why marketplaces alone are not enough

Marketplaces made the channel faster, but now distributors are fighting to prove people still matter, as Christine Horton reports

Cloud marketplaces, automation platforms and self-service procurement have transformed the operational side of the IT channel in recent years. But as AI accelerates and partners face mounting pressure to differentiate, a question inevitably emerges: has the channel become too transactional? Moreover, where do human relationships now fit in the new distribution model?

Today, partners can provision software, manage subscriptions and transact across cloud ecosystems far faster than they could through traditional procurement models. Hyperscaler marketplaces, in particular, have reshaped how software is bought and sold, while automation has streamlined everything from billing and renewals to quoting and lifecycle management.

But a growing number of channel experts tell CRN operational efficiency alone is no longer enough.

“What we’re seeing through IDC partner advisory boards is that marketplaces and automation are stripping friction – and margin – out of distribution,” says Stuart Wilson, senior research director, EMEA Partnering Ecosystems, IDC.

“The risk isn’t disintermediation; it’s becoming invisible in a platform-led buying model where transactional value is no longer a point of differentiation.”

That tension is now becoming visible across the channel. Distributor Climb Global Solutions recently launched a new “People + Platform” positioning built around the idea that automation may make the channel faster, but not necessarily more effective.

“Partners can now buy technology in minutes, but many still struggle with packaging, pricing, service attachment and lifecycle management,” Chris Chandler, head of MSP at Climb tells CRN. “These are the real drivers of margin and long-term value.”

Chandler argues that marketplaces sit at the end of the customer lifecycle rather than the beginning.

“By the time a transaction happens, the most critical work has already been done. Solution design, service packaging, commercial modelling and customer alignment. Marketplaces are highly effective at facilitating the last step, but they do not replace the upstream work that determines success,” he argues.

Channel distribution beyond fulfilment

For years, distributors competed on logistics, aggregation and fulfilment. Cloud and subscription models began eroding that value proposition long before gen AI arrived. Now many distributors are repositioning themselves around enablement, advisory services, lifecycle support, education and ecosystem development instead.

According to Alastair Edwards, chief analyst, channels & ecosystems at Omdia, the shift is about far more than marketplace commoditisation.

“This shift by partners beyond the point of transaction – both before and after the sale – is not just about marketplace commoditisation. It’s driven by the realisation that partner relevance depends on delivering value across the whole lifecycle,” he says.

Omdia research shows customers now work with an average of 6.3 different partners across the technology lifecycle, increasing pressure on channel firms to demonstrate value beyond procurement alone. That’s pushing distributors to evolve into what Edwards described as a blend of digital platform provider and human advisor.

“Platforms and automated processes should be augmented with human expertise to be truly successful. Any distributor trying to automate partner relationships at the expense of personal interaction risks alienating customers,” he says.

At distributor Westcon-Comstor, the company sees marketplaces as highly effective for repeatable buying motions such as subscriptions and renewals, particularly as more spend moves into hyperscaler ecosystems.

But Rene Klein, EVP, Europe at Westcon-Comstor, says the industry often underestimates the complexity that sits behind successful automation.

“What often gets missed is that platform success depends on getting the basics right: a clear data strategy, clean product and commercial data, and well-structured entitlement and usage data. “Without that foundation, automation exacerbates friction rather than removing it,” he tells CRN.

Klein says people-led support still matters most when opportunities become harder to standardise, particularly in cybersecurity and AI.

“Platforms, however, rarely create meaningful differentiation on their own. The real value comes from combining platform efficiency with human insight.”

The AI effect on the channel

On one side, automation is making more parts of the channel transactional. On the other, AI is also increasing technical, commercial and governance complexity for both partners and customers.

“Automation will make some parts of the channel more transactional. At the same time, AI is increasing complexity in governance, security, integration and accountability,” says Klein.

That complexity is creating new demand for strategic guidance, he says.

“As agentic AI becomes embedded across customer environments, the commercial and technical stakes rise, and customers want clearer guidance on risk, architecture and measurable outcomes. That increases demand for trusted strategic advice and places greater value on human judgement.”

Meanwhile, IDC’s Wilson believes AI is accelerating a broader industry reset. “This isn’t just evolution, it’s forced adaptation,” he says. “As AI erodes traditional implementation value, partners are chasing new margin pools – advisory, orchestration, and lifecycle engagement – because that’s where the money is moving.”

Community as a differentiator

Cloud marketplace for MSPs, Pax8, argues marketplaces and human engagement should complement rather than compete.

“For Pax8, it has never been one or the other,” says Harald Nuij, CEO EMEA at Pax8. “Our marketplace simplifies how partners access, use and deliver technology, while dedicated partner success managers, Pax8 Academy coaching and masterclasses, guided growth enablement and professional services ensure partners always have direct, hands-on human support alongside it.”

Nuij pushes back against the idea that marketplaces inherently make the channel more transactional.

“When a marketplace automates the routine, such as provisioning and vendor management, it frees partners to invest their time in higher value customer relationships and services,” he says.

Still, even marketplace-led businesses are increasingly emphasising community and peer collaboration.

“As AI accelerates and the pace of change increases, the human connection becomes the differentiator, not a relic. Technology scales, but trust is built between people,” says Nuij.

The industry appears unlikely to move backwards from automation, marketplaces or AI-led operations. But many across the channel now believe the competitive battleground is shifting away from fulfilment and transactions toward expertise, enablement and trust.

Notes Climb’s Chandler: “Platforms enable scale, but it is people that provide the guidance, curation and expertise to turn that access into tangible growth.”