The channel war: direct sales, PLG, and the rise of resellers

A mid-market manufacturer wants Snowflake for its data warehousedata warehouseA central repository that consolidates data from many source systems into a structured, query-optimized store designed for analytics, reporting, and business intelligence.View full definition →. It never talks to a Snowflake salesperson. Instead, it clicks "Subscribe" inside the AWS Marketplace, where Snowflake is listed as a product, AWS handles the billing, and the deal quietly counts toward the customer's existing AWS spend commitment. Meanwhile, a 40-person startup signs up for HubSpot on a free plan, self-serves its way to the Marketing Hub, then gets a call not from HubSpot but from a HubSpot Solutions Partner, an independent agency that will configure the system for a fee HubSpot never touches.

Same industry, two customers, two completely different power structures. Nobody signed a contract yet, but the channel choice already decided who gets paid, who owns the customer relationship, and who has leverage in the next renewal. That is what this lesson is about.

Three routes to the customer

SaaS companies (Software as a Service: software licensed by subscription and delivered over the internet) reachreachThe number of unique people exposed to your message in a given period. Unlike impressions, reach counts each person once, no matter how often they see it.View full definition → buyers through three main motions, often blended:

Direct sales: the vendor's own sales reps sell straight to the customer. Salesforce built its early growth this way, with field reps and inside sales teams owning every deal.

Product-led growth (PLG): the product itself drives acquisition and expansion. Users try it free or cheap, get value fast, and upgrade with little or no human sales touch. Slack, Figma, and Notion scaled largely this way.

Channel/partner sales: third parties, resellers, distributors, or systems integrators (SIs, firms that implement and customize enterprise software) sell or deploy the product on the vendor's behalf.

These are not mutually exclusive. HubSpot runs PLG (free CRMCRMCustomer Relationship Management: software and strategy to manage and analyse customer interactions throughout their lifecycle.View full definition → tier) alongside a large partner network. Snowflake runs enterprise direct sales alongside marketplace-based, self-serve consumption. The mix a company chooses reflects, and then reinforces, where power sits in the value chain.

Why channel choice is a power decision

Every distribution route creates a different owner of three things: the customer relationship, the pricing conversation, and the margin.

Direct sales keeps all three with the vendor. Salesforce's account executives control pricing, discounting, and the renewal conversation. The vendor captures full software margin but pays for it in sales headcount, often the single largest cost line in enterprise SaaS.

PLG shifts the relationship to the product itself. Nobody "sells" a Slack workspace to a 12-person team; the team just starts using it. The vendor keeps most of the margin but sacrifices some pricing control, since self-serve pricing has to be simple and public, unlike negotiated enterprise contracts.

Channel sales hands part of the relationship, and a meaningful slice of margin, to a third party. A HubSpot Solutions Partner might earn a services fee for implementation and an ongoing revenue sharerevenue shareThe percentage of total industry sales your company captures in a given period. It measures competitive position relative to rivals in a defined market.View full definition → for managing the account. In exchange, HubSpot gets reach into markets and customer segmentssegmentsDividing a market into distinct groups of customers who share similar needs, characteristics or behaviours, so each group can be served with a tailored approach.View full definition → its direct sales force cannot efficiently cover, especially small and mid-sized businesses outside major metro areas.

This is a genuine trade of margin for reach and speed. The question every SaaS company answers, explicitly or by default, is: how much control am I willing to give up, and to whom, to grow faster than I could alone?

The cloud marketplace: a new kind of distributor

Cloud marketplaces, run by AWS, Microsoft Azure, and Google Cloud, are reshaping this trade. A marketplace listing lets a customer buy third-party software (say, Snowflake, Databricks, or MongoDB) and have the charge appear on their existing cloud bill.

This matters for power in two ways:

1. The hyperscaler becomes a distributor with negotiating leverage. AWS and Microsoft take a marketplace commission (estimated in the high single digits to low teens percent, varying by deal and program, as of 2025) and, more importantly, control the shelf. A listing that gets promoted in Azure Marketplace or bundled into a Microsoft "co-sell" program reaches buyers that the ISV (independent software vendor) could not reach alone.

1. Marketplace spend counts against enterprise cloud commitments. Large enterprises sign multi-year commitments to spend a minimum amount with AWS or Azure. Buying Snowflake or Datadog through the marketplace lets the customer's finance team apply that purchase against the commitment already budgeted, making procurement faster. For the software vendor, this is a powerful distribution advantage, but it also means the hyperscaler now sits between vendor and customer, with visibility into the deal and influence over which vendors get marketplace prominence.

Public cloud providers have effectively become the largest software distributors in the world without ever calling themselves that. See AWS's own marketplace seller guide for how tightly integrated this has become with cloud billing and procurement.

Systems integrators: the implementation gatekeepers

For complex enterprise software, especially ERPERPA single integrated software backbone that runs core operations: finance, procurement, supply chain, HR and manufacturing on shared data.View full definition → (Enterprise Resource Planning, software that manages core business processes like finance, supply chain, and HR) and CRM (Customer Relationship Management, software for managing sales and customer data), the software license is often the smaller line item. The bigger cost is implementation: configuring, integrating, and customizing the system for one company's specific processes.

This is where systems integrators, firms like Accenture, Deloitte, or smaller specialized boutiques, hold real power. A large Salesforce or SAP deployment can require an SI engagement worth multiples of the annual software license fee. The SI often has more day-to-day relationship depth with the customer's IT and business teams than the software vendor does, which gives SIs leverage: they can steer customers toward or away from specific products, influence renewal and expansion decisions, and sometimes outlast the original vendor relationship entirely if a company migrates platforms.

Vendors know this, which is why Salesforce, SAP, and Microsoft all run formal partner certification and incentive programs (competency tiers, deal registration, co-marketing funds) designed to keep large SIs loyal and technically current on their platform rather than a competitor's.

Who wins the margin, in practice

A simplified illustration of how a $100,000 annual enterprise SaaS deal might split value across a channel-heavy path (figures illustrative, not sourced to a specific real contract):

• Software vendor list price: $100,000/year
• Reseller/partner margin (services plus referral fee): estimated 15 to 30 percent of the deal value, common in channel-heavy enterprise software as of the mid 2020s
• Cloud marketplace commission if sold through AWS/Azure: estimated high single digits to low teens percent of the transaction
• Implementation services (often sold separately by an SI): frequently equal to or exceeding the first year's license cost for complex ERP/CRM rollouts

The vendor's net take-home on the license itself shrinks once partner margin and marketplace fees are subtracted, but the vendor gains something distribution cannot buy directly: faster market coverage and lower customer acquisition costcustomer acquisition costCustomer Acquisition Cost (CAC) is the total sales and marketing spend divided by the number of new customers gained in a period. It measures how efficiently you grow.View full definition → per deal, because the partner or marketplace already had the customer relationship.

This is the core trade-off in every "channel war." A pure-direct vendor keeps the most margin per deal but grows slowly and pays heavily for its own sales force. A channel-heavy or marketplace-heavy vendor grows faster and cheaper per deal, but redistributes a real slice of value to distributors, resellers, and cloud platforms, and gives up some control over the customer relationship in the process.

🎬 [VIDEO: "How SaaS Companies Actually Make Money (Go-To-MarketGo-To-MarketThe strategy defining how you'll launch a product: target segments, channels, value proposition and coordinated action plan.View full definition → Explained)" - youtube.com - search for recent explainer content on SaaS distribution models covering direct sales, PLG, and channel partnerships]

Regulators are starting to notice

Cloud marketplace power has drawn early antitrust attention. The European Commission has scrutinized cloud licensing and egress fee practices under EU competition rules, and the UK's Competition and Markets Authority (CMA) opened a cloud infrastructure market investigation examining whether AWS, Microsoft, and Google's bundling and switching costs distort competition. No landmark ruling had reshaped marketplace economics as of early 2026, but vendors building marketplace-dependent go-to-market strategies are watching closely, since any forced change to commission structures or bundling rules would directly hit their channel economics.

Key Takeaways

• Channel choice (direct sales, PLG, or partner/reseller) determines who owns the customer relationship, who controls pricing, and who captures margin, often before any contract is signed.
• Cloud marketplaces (AWS, Azure, Google Cloud) have become major software distributors, offering vendors faster reach in exchange for a commission and reduced control over deal visibility and positioning.
• Systems integrators hold outsized power in complex enterprise deployments because implementation spend often exceeds license fees, giving them influence over renewals and platform migrations.
• Every distribution route is a margin-for-reach trade: more channel or marketplace reliance means faster growth and lower acquisition cost, but a smaller share of each dollar for the vendor.
• Regulatory scrutiny of cloud marketplace practices (EU competition rules, UK CMA cloud investigation) is an early but real signal that channel economics could shift with future rulings.