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Core Services Pipeline Shrinking? — How Partnerships Can Fix It

Author: Doug Johnstone, Principal Consultant at Digital Pivot

Date: January 2025

Why are Partnerships so important?

For most IT Services and Consulting Providers, over 80% of revenue originates from fewer than 20 clients. Add to that changing customer buying behaviours, AI disruption, a recession, and the lingering effects of the post-pandemic economy—it’s tough to generate demand. Under these conditions, it’s no wonder they struggle to sell beyond their core customer group.

Many overlook the powerful network effect of Partner Ecosystems.

After working in the SaaS and Hyperscaler ecosystem for over 12 years, I’ve seen first hand how IT service and Consulting providers struggle to maintain a steady sales pipeline. Many rely too heavily on direct sales and traditional marketing, only to find their core offerings no longer generating the demand they once did.

One of the most striking transformations I’ve witnessed was a SaaS practice partner that went from generating just one lead per month to over 20—simply by leveraging the SaaS partner network more effectively. When done right, partnerships can be force multipliers, helping firms tap into new customer segments, expand their influence, and stay relevant in a rapidly evolving market.

But why do so many IT firms fail to capitalise on this? The reality is that many don’t know how to position themselves effectively within their partner ecosystems. In this blog, I’ll explore why your sales pipeline may be drying up and how a well-structured Partner-Led Growth strategy can revitalise your business.

Introduction

The IT services and consulting landscape is undergoing a seismic shift. Economic downturns, AI-driven automation, and evolving customer expectations are making it harder than ever for IT service providers to sustain their traditional revenue streams. Many businesses that once relied on direct sales efforts are now finding that their pipeline is drying up, and what worked yesterday no longer guarantees success today.

If your core service offerings are seeing declining sales, you are not alone. The IT services market is more competitive than ever, and differentiation is increasingly challenging. The good news? There is a proven way to reignite growth: leveraging partnerships

Revitalizing shrinking IT services pipeline through strategic partnerships – Digital Pivot NZ

The Core Pipeline Problem

Why Customers Are No Longer Buying Traditional IT Services

  1. Shifting Customer Priorities – Businesses are investing in AI, automation, and digital transformation rather than traditional IT support and managed services.
  2. Economic Constraints – Recessionary pressures mean companies are scrutinising IT spending, consolidating vendors, and demanding more value.
  3. Cloud and SaaS Disruption – Many traditional IT services are being replaced by cloud-native solutions, reducing demand for infrastructure and support services.

Common Mistakes IT Providers Make in Response to Pipeline Decline

  • Doubling Down on Outdated Sales Strategies – Relying on direct sales and cold outreach in a market where trust and relationships drive deals.
  • Competing on Price – In a crowded market, discounting services leads to eroded margins without guaranteeing long-term customer retention.
  • Overlooking Partner Channels – Many IT service providers fail to leverage technology partners as a growth engine, missing out on co-sell and referral opportunities.

Why Partnerships Are Key To Growth

Leveraging an Ecosystem of Technology Partners to Create New Demand

A Partner-Led Growth Strategy allows IT service providers to:

  • Expand Market Reach – Technology partners have established customer relationships that can be leveraged to introduce your services.
  • Enhance Credibility – Being recommended by a trusted technology vendor boosts your credibility and shortens sales cycles.
  • Drive Net-New Business – Strategic partnerships unlock new opportunities by integrating services into a broader solution offering.

Examples of IT Providers Successfully Growing Through Partnerships

  1. Co-Selling with Cloud Providers – IT consultancies that align with AWS, Microsoft, or Google Cloud partner programs benefit from co-sell opportunities and marketplace exposure.
  2. Strategic Vendor Partnerships – Companies offering managed security services are thriving by partnering with cybersecurity vendors to deliver bundled solutions.
  3. Industry-Focused Alliances – IT firms targeting legal, healthcare, or finance sectors are growing by forming alliances with industry-specific SaaS providers.

How Partnerships Drive Trust and Expand Sales Opportunities

  • Joint Marketing & Sales Enablement – Leverage vendor marketing budgets and co-branded campaigns to amplify your reach.
  • Referral and Reseller Agreements – Establish structured partner programs to incentivise mutual lead generation.
  • Training and Certification Alignment – Enhance team capability and credibility by aligning with partner training and certification frameworks.

Next Steps: Is Partner-Led Growth Right for Your Business?

Ask yourself:

  • Are our current sales and marketing efforts generating diminishing returns?
  • Do we have untapped partnerships that could drive revenue growth?
  • Are we struggling to differentiate our services in a crowded market?

If you answered “yes” to any of these, it may be time to explore a Partner-Led Growth Strategy.

Partner-Led Growth Strategy for IT Service & Consulting Providers

At Digital Pivot, we help IT service providers build and execute a Partner-Led Growth Program that aligns with your business objectives and market trends. Our methodology ensures that you:

Get Started Today

Explore how our Partner-Led Growth Program can transform your sales pipeline and accelerate business growth.

Have questions about leveraging partnerships for growth? Chat with our AI Pivot Agent —your expert guide to revitalising your sales pipeline.

For more information, contact us

The 5 key steps to unlocking Partner ecosystem growth:

  1. Core Services Pipeline Shrinking? —How Partnerships Can Fix It
  2. The Hidden Revenue in Your Partner Network: How to Unlock It
  3. Building a Scalable Partner-Led Sales Strategy in IT Services
  4. Partner Enablement 101: The Missing Ingredient in Most IT Sales Strategies
  5. How to Measure the ROI of Your Partner-Led Growth Strategy