The great vendor purge is squeezing the channel

The era of unchecked software acquisition is officially over. Following years of decentralized purchasing, department-led cloud adoption, and a seemingly endless appetite for "best-of-breed" point solutions, enterprise technology stacks have ballooned to unsustainable levels.

Recent industry data lays bare the reality: large enterprises now manage an average of 660 Software as a Service (SaaS) applications, spending roughly $284 million annually, according to Zylo’s 2025 SaaS Management Index. With 52.7% of those licences sitting completely unused.

For CIOs, CTOs, and their procurement teams, the bill for this sprawl has finally come due. Business leaders are entering renewal discussions with a strict order to slash the supplier list and rationalise the estate.

The cloud marketplace gravity

Enterprise buyers are increasingly flocking to AWS, Google Cloud, and Microsoft marketplaces to eliminate procurement friction. Crucially, these platforms allow organizations to consolidate billing and burn down existing multi-year cloud commitments with third-party software purchases, entirely bypassing the need for new purchase orders.

Enterprise spending on hyperscaler marketplaces hit $45.5 billion in 2025 and is projected to surge to $163.1 billion by 2030, according to February 2026 research by Omdia,

“Hyperscaler marketplaces continue to see rapid momentum as a route to market for vendors across the technology industry,” says Alastair Edwards, chief analyst at Omdia.

Analysts view this as a permanent structural change rather than a temporary trend to simply burn off leftover cloud credits. According to recent research from analyst firm Omdia, enterprise buyers have officially moved from "opportunistically using marketplace purchases" to highly "strategic marketplace procurement," actively negotiating their cloud commitments to include budget for third-party software.

Crucially for the IT channel, this is no longer just a direct-sales play: Omdia predicts that almost 60% of these marketplace transactions will be channel-enabled by 2030, cementing them as the default commercial layer for enterprise IT.

For IT leaders, the appeal is undeniable: one contract, consolidated invoicing, and pre-vetted security. However, this spells disruption for the traditional IT channel. While hyperscalers have introduced constructs like multiparty private offers to keep trusted partners involved, traditional VARs and distributors face growing disintermediation. To survive, partners must rapidly adapt to these marketplace-aligned models rather than relying on legacy transactional routes.

The risk of being rationalized

The wave of vendor consolidation will not hit all channel partners equally. Niche specialists and MSPs whose primary value is tied to a key account are managing redundant tools and face the highest risk.

Software budgets are increasingly under the microscope. Forrester's 2026 budget planning analysis indicates that software now accounts for over 40% of cybersecurity spending alone, eclipsing hardware, outsourcing, and even internal personnel costs. When a CIO is tasked by the board with reducing these bloated software costs, the easiest targets are overlapping services.

As Forrester analysts note in the report, this sprawl is frequently accidental, resulting in "redundant capabilities... in both proactive security and detection-and-response vendor portfolios."

If a business is using three different project management tools or overlapping endpoint monitoring dashboards, procurement will force standardisation onto a single, integrated platform. The era of buying multiple single-point solutions has created an "expense-in-depth problem," Forrester warns, accelerating the mandate to rationalise disparate tools into multi-purpose platforms.

Procurement teams are no longer just looking for the best price on a renewal; they are looking to eliminate the invoice altogether. If an MSP fails to proactively address the bloat within their client's estate, they risk being collateral damage when the client inevitably takes an axe to their sprawling supplier list.

The rise of the estate advisor

To survive the great vendor purge, forward-thinking partners are pivoting their value proposition. Rather than fighting the tide of consolidation, they are orchestrating it. This is giving rise to a new channel archetype: the independent "estate adviser.".

Instead of leading with product comparisons or pitching net-new software to add to the pile, these partners sit alongside internal IT teams to conduct ruthless, line-by-line audits of contracts and subscriptions. They map overlapping services, expose shadow IT, and benchmark usage data against actual business requirements.

This is very much in line with what IDC recently observed in a global Sage‑commissioned study of more than 2,000 resellers. High‑performing partners are “building growth on innovation that delivers outcomes,” leading with customer outcomes and running disciplined, services‑led models with clear vertical focus. In other words, they are rewarded not for the volume of new tools they sell, but for the measurable optimisation and business results they deliver from the tools a customer already owns.

By actively identifying tools that can be retired, the estate adviser builds immense trust with the C-suite. The conversation shifts from "what else can we sell you?" to "how can we optimize what you already own?" For the IT leader, relying on an external adviser removes the internal friction and departmental politics often associated with ripping out a team's preferred, yet redundant, application.

Defending recurring revenue

The 2026 consolidation squeeze is not a temporary cost-cutting trend; it is a permanent correction to years of unsustainable tech sprawl. Analyst firms such as Gartner have highlighted for the last few years how vendor consolidation can lower IT overhead by reducing the number of tools teams must support and simplifying vendor management.

By trimming overlapping platforms and standardising on fewer, more integrated providers, organizations can cut complexity, improve support efficiency, and free internal teams to focus on higher‑value work.

As hyperscaler marketplaces capture more of the transaction layer, the true value of the channel now lies in this kind of strategic guidance. Partners who stubbornly cling to transacting redundant point solutions will find themselves rationalised out of key accounts, while those who embrace consolidation and act as the CIO’s trusted guide through the vendor purge will become more deeply embedded in their clients’ operations than ever.