A Foundational Business Software

For more than 40 years, Enterprise Resource Planning (ERP) has transformed continuously to keep up with new business needs and tech advances. Today, the ERP market is in the midst of another phase of evolution and promise with GenAI and the accelerating shift to cloud-based ERP solutions.

Research by The Channel Company data team shows that between 2021 and 2023, verticalized and niche ERP brands grew by 7.6% and mid-tier ERP brands grew by 6.9%. Major ERP brands grew by 10.3%* in that period. (*Includes additional software types). The ERP sector overall is expected to continue its upward trajectory, with global revenue projected to grow at a 14.4% compound annual growth rate (CAGR) to hit $229 billion by 2032.

ERP Industry Growth

Despite steady growth, ERP vendors and their channel partners aren’t always aligned on how to seize ERP opportunities as end user expectations shift and partners navigate dynamic market pressures, tech talent challenges, and new use case innovations and possibilities. Exclusive research by The Channel Company highlights changes in what end users want from ERP today and how vendors can bridge the vendor-partner gap to accelerate ERP sales.

End Users are More Focused on Agile Cloud-First, Subscription-Based ERP Models

The Channel Company took a snapshot of interest signals from than 27,000 primarily mid-tier companies in March 2025 and found significant interest in branded ERP solutions, with 13% of companies showing strong interest through research and searches around the topic of ERP. Almost 70% of companies showed some interest in ERP in general, which highlights ERPs essential business function and daily usage for many companies.

End Customer Interest Levels in ERP Software

Among companies that showed general interest in ERP, the strongest proportion of interest was in Cloud ERP (41%) followed by ERP Vendors (37%). Companies that showed interest in branded ERP products leaned heavily into searches for cloud ERP solutions (70%) and demonstrated significantly less interest in exclusively on-premise deployments (10%).

End Users Want ERP Solutions to Deliver Undeniable Value Faster

There’s been a shift away from end user interest in legacy-style ERP products that require large time and money investments, take time to implement, and don’t provide measurable business results for months or even years. Today, expectations for more impactful benefits from ERP are high. Today, end users have high expectations for ROI that’s clear to see across the whole business. A smooth implementation process, hand-overs with no support, and behind-the-scenes business process improvements are no longer enough to make a strong case for ERP.

These expectations are highlighted by the overwhelming interest (97%) shown in ERP transformation over ERP implementation (3%) among end users in ERP.

Wanted: ERP Specializations by Industry and Niche

Among the companies showing a strong interest in ERP, 32% are focused on vertical-specific solutions for markets like manufacturing, healthcare, telecom, financial services, and more. This is not surprising, though, as verticalized offerings have long been used by major ERP brands to drive growth and channel partners have increasingly differentiated themselves with ERP systems tailored to unique industry needs.

ERP channel partners have also observed a shift in how mid-tier companies view ERP’s role in their tech stack. Instead of a platform that’s foundational to connecting data across their entire organization, ERP today is often considered a powerful “system of record” to be shifted to data lakes for analysis by other integrated technologies.

What does this mean for the market? On one hand, it means smaller, more nimble ERP vendors have an opportunity with high-value niche capabilities. On the other hand, major ERP brands have partner ecosystems in place for ready-to-go integrations that deliver value quickly and offer ease of scalability as end users’ business needs evolve.

Top 3 ERP Disconnects Between Vendors and Partners

License Resale Risk vs. Vendor Expectations

ERP vendors continue to emphasize license sales for growth, especially with the transition to cloud-first, subscription-based revenue models. Channel partners, however, are wary of the license resale model because margins tend to be slim, and they carry the bulk of the financial risk with large capital outlays. This poses massive challenges for partners, especially when customers reduce the scope of their ERP transformation or decide they don’t want the software at all. In these instances, partners cannot return the license and there have been instances of partners holding multi-million-dollar licenses without customers for them.

For partners, high-value service delivery is the clear winner, and they continue to be wary of reselling ERP licenses that don’t include greater risk-sharing.

AI Readiness vs. Practicality

Just like the entire channel, ERP vendor and partner organizations are exploring artificial intelligence and AI-powered use cases to drive business growth. In an analysis of 37 ERP brand channel leaders who shared their top goals, challenges, and priorities, The Channel Company found “AI Integration and Competencies” were the second most frequent responses after “Cloud and Subscription Models.”

Vendors are asking partners to embrace AI and invest in the talent necessary to innovate the next AI-powered ERP solutions.

On the partner side, skilled AI talent carries a high cost that is difficult to justify at a time when budgets are tightening, teams are lean, and the pathway to profits from AI is not always obvious. Until they have greater confidence in AI monetization that can be sustained over time, partners will understandably move forward cautiously.

Revenue Goals vs. Market Realities

Vendors are setting ambitious targets for channel-led growth, especially with demand for cloud-based ERP systems tailored to specific industries rising and the midmarket’s strong interest in transformation-focused ERP upgrades.

The Channel Company’s vendor surveys show vendors are aiming for 20%, 30%, and even as high as 40% growth in indirect sales.

But while vendors push for fast growth, partners face the day-to-day realities of highly complex deals, fluctuating customer budgets, and the need to build stakeholder trust over time. When you consider that ERP license growth is only 6% to 7% and factor in global market uncertainties, it’s clear that partners face significant challenges to quick deals and rapid growth.

3 Pathways to Through-Channel ERP Success

Both ERP vendors and partners see opportunities in the channel but need greater alignment to access the full growth potential of ERP in the channel. To build thriving, lasting partnerships, vendors need to overcome the top disconnects through deeper collaboration, smarter enablement, and sharper verticalization.

Prioritize Collaboration to Respond to Partner Opportunities and Challenges

Closer collaboration with your partners and between partners to innovate service offerings empowers partners to deliver value without being constrained by higher-risk models.

• Embrace partner-led territory models, where partners are empowered to manage end-to-end customer relationships.
• Support ecosystem collaboration, including ISVs and services partners, to build more integrated go-to-market pathways.

Advance AI and Cloud-Based ERP Enablement (While Respecting Partner Concerns)

Enablement is key to accessing partner-led AI opportunities and growth, especially with the wide gap between vendor and partner AI priorities and timelines. Vendors should help partners move forward and explore AI use case possibilities, while respecting partner reticence to invest heavily in AI talent. Forward-thinking vendors are offering up:

• AI toolkits and knowledge centers to help partners build their expertise and innovate AI-powered ERP solutions, without excessive pressure for immediate ROI.
• Certification programs and hands-on training toward technical proficiency in AI, data analytics, and cloud transformation.
• Greater clarity on the path to AI monetization and tangible AI outcomes that resonate with partners’ customers. (Delivered through AI use case one-pagers, ROI-focused case studies, etc.)

Vendor success depends on partner success. And partner success depends on vendors that enable high performance.

Make the Most of Partner/Vendor Alignment on Verticalization

Vendors are leaning into conversations around verticalization and niche ERP offerings with their partner ecosystem, and provide verticalized content, training, and marketing toolkits to help partners differentiate their industry-specific capabilities and services.

• Clarify vertical or micro-niche specialization opportunities so partners can stand out in high-value markets.
• Support partner efforts to build repeatable IP focused on industry specialization.
• Encourage partner-led territory expansion to build engagement and long-term opportunities with specific sectors.

Investments in partner vertical readiness makes it easier and faster for partners to close deals and deliver results.

Evolving ERP practices for end users and transforming market realities can spark opportunities — but only when vendors meet partners where they are. Vendors that connect their ERP strategies to partner expectations, goals, and enablement needs are positioned to scale through-channel ERP growth.

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