What should the Channel expect in the coming year? Stakeholders from across the Channel share their predictions!

There are plenty of reasons for optimism as companies across the Channel prepare to step into 2025. New opportunities and possibilities are coming into focus, with huge progress having been made to connectivity infrastructure across the UK. At the same time, the technologies that run on that infrastructure are continuing to progress with new devices and software available to resellers, MSPs, distributors and vendors looking to find the best solutions for partners and/or customers. 

There are challenges within the economy, but spending on IT and telecoms is continuing to rise. Worldwide IT spending is expected to total $5.74 trillion in 2025, an increase of 9.3 per cent from 2024, according to the latest forecast by Gartner. The analyst firm expects this increase to be driven by server sales and spending in Generative AI (GenAI), but plenty of other areas are predicted to see an uptick in sales too.

Starting with those upgrades to connectivity infrastructure, availability of full fibre and 5G networks is continuing to increase and plenty of organisations are keen to upgrade. For other businesses to move onto these new networks, it will be key for the Channel to explain the benefits.

Adrian Sunderland, CEO, Jola, explained what he expects to see in 2025 in terms of the connections businesses will make. He said, “Most of the population will be able to obtain 5G, which will drive adoption in higher bandwidth applications. For SME businesses, FTTP will likely provide the best performance and value for money. Where FTTP isn’t available then 5G will make SoGEA-based broadband look pedestrian in comparison. 5G hardware will continue to come down in price whilst improving performance.”

Progress could also be made to the satellite connectivity services that are available to businesses. Sunderland said, “Competition in the LEO satellite space will drive down prices and satellite may be in the mix with fibre and 5G for delivering small office and branch internet connectivity.The upcoming withdrawal of the PSTN, scheduled for January 2027, will also shape the Channel this year. Sunderland added, “The PSTN switch-off will continue to be an opportunity.”

In-demand technology

These infrastructure changes will ripple across the technologies that run on that infrastructure. In the business communications world, some stakeholders expect to see more organisations moving from SIP towards UCaaS.

John Murphy, managing director, Gamma Business, explained, “SIP remains a popular choice for businesses and their voice capabilities. However, the market is moving towards one that’s dominated by UCaaS solutions. The cloud is an enticing prospect for businesses looking to improve their communication capabilities. That move can take effort and does present risks in the form of customer churn. But making the decision to move is better than doing nothing.”

He emphasised why UCaaS is so compelling for many businesses. He said, “UCaaS offers complete flexibility and scalability, and the shift is all about embracing a modern and evolving collaboration landscape. There’s no need to reinvent processes and overhaul business. Instead, that transition translates to modernising communications and maintaining structure.”Efficiency-driven innovations in UCaaS could also help businesses to prioritise productivity amid inflation.

Steve Osler, CEO, Wildix, explained, “With inflation eating into margins and a tight labour market intensifying wage pressures, companies are zeroing in on efficiency. UCaaS providers are stepping up with automation-driven tools that offload repetitive workflows, freeing up employees for activities that deliver measurable results.

“This shift allows resellers and MSPs to position UCaaS as more than just a communications tool, it’s a productivity powerhouse that helps clients protect their bottom line while offering elevated service quality. Those who lead with productivity solutions will empower clients to work smarter, not harder.”

UC solutions can also open the door to contact centre (CC) solutions, and that trend is expected to continue in 2025. Emily Masterton, head of channel, EMEA, 8x8, said, “What we are seeing is that some people start with looking at UC as the option they think they need and then discover that they actually also need some basic contact centre functions for the likes of their sales, finance and marketing departments.”

Gamma’s Murphy discussed what is at stake for channel companies as the communications market continues to mature. He said, “The Teams market is growing by 18 per cent a year, while the IoT market expands by 24 per cent. These changing circumstances makes it integral for businesses to be in those markets. For traditional communications, the clock is ticking. Failing to be part of that transformation means there’s a risk of being left behind.”

AI grows up

2024 might have been the year when businesses finally understood how they might use AI, but 2025 will be the year when AI gets to work. GenAI will be leading that charge. John-David Lovelock, vice president analyst, Gartner, explained, “Current spending on GenAI has been predominantly from technology companies building the supply-side infrastructure.

“CIOs will begin to spend on GenAI, beyond proof-of-concept work, starting in 2025. More money will be spent, but the expectations that CIOs have for the capabilities of GenAI will drop. The reality of what can be accomplished with current GenAI models, and the state of CIOs’ data will not meet today’s lofty expectations.”

Nigel Dunn, managing director, Jabra, said that how we interact with GenAI tools will be key to unlocking their full potential in the workplace. He explained, “The future we envision goes beyond simply sitting in front of a computer. We expect to see more natural, human-like interactions with the software and applications we use to complete tasks every day and growing demand for effortless communication with computers, software and data using just our voices.

“There is increased interest in voice-powered technology, with more users wanting to use their voice over written prompts to communicate with AI. This preference will only become more widespread, since voice interactions with AI can boost productivity by drastically reducing the time spent on routine activities. With AI-driven voice technology able to record conversations and automatically generate meeting summaries, expect manual notetaking to start becoming a thing of the past.”

Craig Newell, senior solutions consultant at Evolve IP, discussed the specific ways in which he anticipates AI will shape the UC market. He said, “AI’s impact on UC is set to accelerate further in 2025, especially around remote meetings. The latest Webex developments, for example, include Webex Assistant, which provides transcripts, translations and message summaries. Powerful software can analyse writing styles and re-write messages before sending them.

“AI Assistant in Webex meetings helps people catch up with quick summaries for late arrivals. Features such as smart chapters and a ‘be-right-back’ option ensure fewer distractions and no missed information.”

AI could also help to enable businesses to more easily make use of customer data. Tony Martino, CEO of Tollring, said, “AI will help businesses to understand customer sentiment, identify challenging interactions, and improve processes by providing better data to front-line employees. Businesses will also be able to recognise which employees are most effective at resolving issues and use these insights to train others, leading to enhanced customer satisfaction.

“Historically, AI and technologies such as comprehensive call analytics were reserved for large enterprises due to the high costs, but this will shift during 2025. With decreasing costs of AI technology for vendors such as ourselves, together with more straightforward, off-the-shelf solutions, all sizes of business will be able adopt the technology without significant cost or complexity.”

Developments in the AI space will also push the needle on possibilities for billing providers. Simon Adams, managing director of PRD Technologies, expects to see AI continuing to transform the billing industry.

He said, “In the billing industry, automation is fast becoming a key requirement for success and there is a continued move towards diversification and creating additional revenue streams. Those areas will only benefit from the use of AI. This is especially true when it comes to the analytics space and how AI can boost scope and efficiency when it comes to data collection, processing and interpretation.”

Adams said the company is exploring how AI can improve the end-to-end billing process and where its implementation can help maximise efficiency.

Finetuning partner programmes

BI Worldwide is a provider of sales and channel incentive programmes. Deborah Watson, the company’s client and solutions strategy director, argued that AI could shape sales and channel incentive programmes. She said, “In 2025, AI’s influence will continue to expand to support channel sales strategies, including in the incentives, rewards and recognition space. This tech will enable smarter, more personalised recognition programmes, analysing performance data and data from rewards platforms to generate insights on what specifically motivates teams, on an individual basis.

“Our sales and channel incentive programmes are already backed by AI-driven insights. For example, [our] incentive structures can tailor rewards to individual needs based on real-time performance metrics, adjusting targets dynamically as market conditions change. With tools like these, companies will be able to better identify top-performing salespeople and partners for reward and recognition, as well as middle performers, which typically represent the greatest opportunity to generate incremental sales.”

Vendors will be put under pressure if they don’t offer the right programmes for their partners. Masterton, from 8x8, said, “Away from the technical and product side of the business, one area that is going to remain crucial in 2025 is bigger and better partner programmes. They need to be exact and tailored to the type of partner.

“Vendor partner programmes need to be driving loyalty, building growth, rewarding the partners in the right way and being best in breed. Through close relationships with their partners, vendors will need to make sure that their programs and overall partner journey are developed and optimised to deliver the best results possible. That way, hopefully, all involved see a successful 2025.”

Ranjan Singh, chief product officer at Kaseya, added, “MSPs will demand a much better customer experience across sales, onboarding, post-sales support and billing. Vendors, big and small, have largely failed to meet customer expectations on these fronts. MSPs will prioritise customer experience over best-of-breed functionality when determining which vendor to consolidate their spend with.”

Singh warned that some channel companies could tire of vendors that do not offer them the right partnerships. He said, “MSPs will demonstrate a preference towards platform solutions – whether it’s a security platform, endpoint security platform, backup platform or an all-in-one IT and security platform. Vendor fatigue is real and MSPs are looking to converge their spend with as few vendors as possible to drive profitability and improve efficiency.

“Vendors have begun to respond to this expectation with offerings anywhere from a pricing bundle to a full platform offering everything in-between. Vendors are looking to partnerships to deliver to this expectation – however, pricing bundles and packages based on partnerships are likely to fall short of expectations of delivering a truly integrated platform experience.”

Cloud fluctuations

In the cloud market, there is an expectation from some stakeholders that intellectual property and data protection concerns will drive increased on-premise and sovereign cloud investments. Chris Royles, field CTO, EMEA, Cloudera, explained, “Next year, on-premise investments will surge as companies seek to protect their data and intellectual property. Companies are investing heavily in data and AI, developing their own IP that they want to keep secure. By keeping their data on-premise, businesses have more security and control, ensuring that proprietary code and project information remains within their own protected environments.

“In addition, interest in sovereign cloud solutions is also growing. Hyperscalers like AWS and Microsoft have recognised that the repatriation of data will affect their business models, prompting them to offer more localised, regulatory-compliant cloud options.”

James Lavender, head of professional services, Orange Cyberdefense UK, added that it’s projected that 80 per cent of enterprise workloads will be cloud-based or application-based by next year, with that driven by a shift from complex physical installations to cloud, virtual, application and remote deployments.

He explained, “This move is part of a broader trend, with global spending on cloud infrastructure expected to reach over £20 billion by 2025, reflecting a 20 per cent annual growth rate. Cloud and application installations typically require around 40 per cent less engineering time than on-premises setups, freeing up significant resources for MSPs to expand their roles beyond technical deployment.

“As a result, MSPs can focus on delivering comprehensive, end-to-end cybersecurity solutions, including in-depth assessments, tailored guidance, and strategic architecture design.”

Tackling cyber threats

Other stakeholders agreed that channel companies could also find opportunities within the cybersecurity market. David Weeks, head of partner experience, N-able, discussed how MSPs can succeed by embracing the security consultant persona. He explained, “Security must remain top of mind for customers, and the greater good of the industry. This will require providers to define their roles—whether as managed security service providers or those that simply sell and manage clients’ existing security solutions.”

Resellers and MSPs looking to take their first steps into this market might consider easy to deploy solutions. Gamma’s Murphy pointed to Candio’s SafeWeb solution as one such example. Murphy said this solution “presents an easy way to get into the cyber market and eliminate the threat posed by the dark web.”

Anthony Dobson, regional director for sales at Arrow’s enterprise computing solutions business, discussed the inextricable link between AI and cybersecurity. He said, “AI is already integrated across many vendor solutions and applications, helping to enhance decision-making, automate processes and provide advanced analytics.

“While cybersecurity remains a top priority, AI is playing a part in both the problem, enabling attacks to become even more complex and sophisticated, and the solutions to counter them.”

In-demand devices

Hardware will also continue to be an important part of technology deployments for the Channel. For those preparing for the retirement of the PSTN, some will require new devices built for an all-IP environment. Paul Grant, channel manager for the UK and Ireland, Snom, said, “Telephony should no longer be viewed in isolation, but as an extension of a company’s IT system and the impending switch-off is a prime opportunity to boost and improve communications.”

Grant explained that the desk phone will still play a valuable role in keeping businesses connected in 2025. He explained, “Desk phones do not require a computer and, as such, can be used independently of it. They are designed for continuous use and generally last for many years, whereas computers and mobile devices need to be replaced more frequently.”

Softphones might be an option for some organisations and use-cases, but hardware is still necessary for some organisations. Grant added, “Although softphones score points for their mobility and integration with other programs, desk phones offer clear advantages in terms of their stability, user-friendliness and audio quality, which are important in business and safety-critical applications. They also offer higher margins for resellers compared to other communication solutions.”

Justin Carl, managing director, ProVu Communications, discussed how the company is preparing for a rise in demand for audio visual and video conferencing equipment, as well as a surge in demand for smart switches and advanced networking equipment.

He added, “As the IT and voice sectors converge, businesses are increasingly diversifying to secure their customer base and stand out from competitors. The continued growth of IoT is likely to drive higher adoption rates, potentially serving as a key factor for channel businesses to expand their range. Additionally, we foresee cybersecurity becoming a focal point, with channel partners adding more security services to bolster their offerings.”

For Jabra’s Dunn, he expects to see increased demand for high quality audio and technology, such as professional headsets. Dunn explained that this is because users will need devices that work seamlessly with AI tools, especially in challenging, noisy environments.

He added, “We expect professional headsets with powerful microphones to prove particularly popular, given their ability to effectively cancel surrounding noise and enhance voice clarity – in some cases contributing to 97 per cent transcription accuracy with AI tools. In contrast, consumer headsets deliver an average accuracy of only 64 per cent, dropping as low as 7 per cent in noisy environments. To maximise productivity gains, all eyes will be on equipment that is tested and approved to work with AI.”

Organisations will also continue to invest in solutions that drive greater productivity and collaboration, especially for hybrid meetings. Dunn said, “We expect to see more demand for video conferencing solutions that optimise meeting room space and give virtual participants a better view of what’s happening in the room. All with the aim of making meetings more productive and engaging for everyone.”

Managed services

For Martin Saunders, COO of Highlight, 2025 will be the year when managed services come to maturity. He said, “Managed services are experiencing a major shift. Initially a solution for companies looking to avoid the complexities of managing their comms and technical infrastructure, managed services are quickly becoming the preferred choice across industries. In 2025, this trend will only accelerate as businesses increasingly outsource critical operational infrastructure to focus on their core business functions.

“Beyond network stability, managed services in 2025 will expand significantly into areas like unified communications and security. Unified communications solutions, such as Microsoft Teams and Cisco Webex, are continuing to redefine the modern workplace. For these tools to operate at peak efficiency, resellers and providers must ensure not only technical reliability, but also protect data and communications from security vulnerabilities.”

That viewpoint was shared by Weeks, from N-able. He said, “MSPs need to work to position themselves as key advisors, helping customers navigate changes and maximise the opportunities these bring.”

Saunders, from Highlight, added, “Providers are realising they need to offer a consultative approach, where listening to customer challenges takes precedence over selling pre-packaged solutions. Providers will need to differentiate themselves by understanding unique needs and focusing on delivering specific business outcomes.”

The next race

2025 could also see quantum computing igniting the next tech arms race, according to Royles, from Cloudera. He said, “Quantum computing is set to overshadow AI as the next major technological revolution. Rapid development is underway, with organisations investing heavily in next-generation data centres equipped to provide ultra-cold temperatures, specialised infrastructure and massive power requirements required to support quantum systems.

“The potential value of quantum breakthroughs is immeasurable, from accelerating drug discovery and genetic reprogramming in healthcare to pushing energy closer to fusion, potentially rendering traditional power sources obsolete. Beyond global leaders such as Google, and Microsoft, quantum technology will also be offered as a cloud service, enabling businesses to access its power without building their own infrastructure.”

Royles emphasised companies will find themselves racing competitors. He said, “As quantum emerges as a game-changer, this shift will trigger a race as companies rush to harness quantum’s capabilities, using it to enhance AI capabilities and gain a competitive edge.” Now is the time to get started.

This market report was included in our December 2024 print issue. You can read the magazine in full here.