AI remains a Wild West, while hyperscalers continue their gravitational pull and demand for industry expertise grows
Today we unveiled our third annual Tercera 30 report, our view of the top software ecosystems for services partners. Our goal with the Tercera 30 is to give founders and IT services leaders valuable insights into the platforms we believe hold the greatest potential for building a channel-focused technology services business or practice, so they can make more informed decisions about the partners they bet on.
This report, like previous years, profiles 30 software vendors that rely on consultancies, systems integrators and managed service providers to drive growth. It includes:
- 10 of the largest publicly-traded vendors (Market Anchors)
- 10 publicly-traded vendors with evolving partner ecosystems (Market Movers)
- 10 privately-held, partner-centric vendors that are gaining share (Market Challengers)
- A bonus 5 Ones to Watch list focused on industry players
The report also highlights six trends that we’re seeing across these partner ecosystems. The full report and listing of the Tercera 30 can be found here.
2024 Tercera 30 list
Who’s in and who’s out
Seven companies on the 2024 Tercera 30 are new to the list. They include: Anthropic, Braze, Cohesity, Dynatrace, MongoDB, Wiz and Zscaler. These additions are the result of not only their individual market and partner performance, but also the growing momentum for AI, data management and cybersecurity.
Hyperscalers continue their gravitational pull
The three largest public cloud providers— Amazon Web Services, Microsoft Azure and Google Cloud — continue to dominate the landscape. More than half (54%) of the technology services firms surveyed by Tercera listed one of these three cloud service providers as their primary partner, and the partners in these ecosystems reported on average higher growth than those in other ecosystems.
AI drives demand, but partnering remains a Wild West
Financial performance and the insatiable demand for GenAI offerings kept Nvidia and OpenAI on the list for 2024, along with Anthropic, an LLM provider with tight ties to the AWS ecosystem. Each of these rapidly growing, highly valued companies is still working out its partner motion. Establishing a formal partnership with these players to date has required brand heft or a herculean effort, however all are making moves that show partners are a clear part of their growth strategy. These are also critical capabilities for any firm looking to be seen as a GenAI leader.
Partners and providers lean into industry specialization
Vertical SaaS companies are on the rise. According to Bessemer, these companies already represent a combined market capitalization of ~$300 billion, and the rise of Vertical AI (LLM-native applications that serve specific industry use cases) could create an even bigger addressable market. This, and the increasingly verticalized go-to-market motions of many in the Tercera 30, is pushing partners to hone their industry chops and creating a surge in AI-native services firms focused on industry use cases.
An industry-focused watch list
Tercera dedicated its 2024 Watch List to five industry cloud companies across insurance, banking, retail and manufacturing. These companies include: Duck Creek Technologies, Guidewire, Körber, and nCino and Veeva. More detail on them can be found in the report.
Tercera 30 methodology
To develop the list, Tercera evaluated more than 150 vendors. The 30 finalists were selected by analyzing public and proprietary data, as well as research from data partners like Cleveland Research, G2, and Altman Solon. This was complemented by interviews with market insiders, investment bankers, software partner leaders, and a survey of 250 IT service firm leaders. A full overview of the methodology can be found here.
A little help for (and from) our friends
It’s been a time of great change in IT services, and across the software ecosystems in which these firms play. Growth has slowed for many firms, although the majority of the 250+ services leaders responding to our Tercera 30 survey reported they are still growing. Buying patterns have shifted as well. The intense interest in AI is both accelerating and stalling deals, and big transformational program purchases moved this year to more iterative, transactional engagements that can deliver value faster. This is creating tailwinds for some software platforms and services partners, and headwinds for others.
While it’s never been easy to build a services business, the shifting tides in services right now has made it even more difficult. We hope the Tercera 30 helps leaders more easily navigate these changing ecosystems.
We’ll keep doing the legwork to keep this list up to date. But we’d love your help.
Please weigh in on this 2 minute survey by telling us which companies and partner ecosystems you think represent the best opportunities in the near term. Share your experience with the software companies you currently represent and what makes their partner programs exceptional, average, or subpar.
