A new way to buy technology

A New Way to Buy Technology

What is a Technology Services Distributor (TSD)?

Technology Services Distributors, or TSDs, are wholesale organizations that hold contracts with hundreds of technology vendors. These agreements allow registered Trusted Advisors (TAs) to source and manage technology purchases on behalf of their clients—without the need to buy directly from a vendor.

But how did this model come to be?

Where It All Started

The TSD model originated in the telecom industry 20+ years ago. At the time, if a vendor wanted to grow, they had to invest heavily in a direct sales force—paying salaries, benefits, and commissions. A new approach emerged: entrepreneurs partnered with vendors and proposed a residual commission model. Vendors would pay a percentage of monthly recurring revenue (MRR) to independent advisors who closed deals, and in return, the advisors would help grow their customer base.

From this, the channel was born.

Over time, some vendors even abandoned their internal sales forces entirely, becoming channel-only organizations—meaning their services are only available through registered TAs. While many vendors still maintain both direct and indirect sales channels, the role of the Trusted Advisor is now firmly established.

Why the Trusted Advisor Model Is Growing

This isn’t a fringe model anymore. The ecosystem has matured, and major buyers—from mid-market companies to global enterprises—are turning to TAs for strategic guidance. Here's why:

1. IT Complexity Is Exploding

Organizations are managing hybrid cloud, cybersecurity, contact center, AI, SD-WAN, and more. TAs provide vendor-agnostic expertise and tap into TSD engineering resources to help teams make sense of it all.

2. Choice Fatigue and Vendor Overload

With thousands of providers in the market, TAs help evaluate, narrow, and benchmark options—so you don’t waste time in sales demos that go nowhere.

3. Speed and Precision

Tools like AVANT’s Pathfinder and Telarus’ GeoQuote allow TAs to pull pricing, feature sets, and performance data from dozens of vendors instantly, helping clients make informed, timely decisions.

4. Services, Not Just Sales

As vendors move to recurring “as-a-service” models, the role of the advisor becomes ongoing. TAs stay engaged across implementation, renewals, and support—ensuring long-term alignment.

5. Strategic Trust

CIOs and procurement teams are now building channel partners into their buying strategy, using them for vendor validation, competitive analysis, and post-sale accountability.

6. Industry Growth and Maturity

According to Opex Technologies, a top TA firm with over 20 years of experience, the channel is on pace to become a $100 billion ecosystem. Their analysis highlights three macro drivers:

• The shift toward as-a-service delivery models

• Buyer preference for independent, expert guidance

• The growing number of vendors who now sell primarily through the channel

These trends are bringing more investment and talent into the TA space—and changing how businesses buy technology at scale.

How Big is the TSD Ecosystem?

Let’s talk numbers:

• $6–8 billion in annual billings flow through top TSDs like Intelisys, Telarus, and AVANT

• $2.4 billion+ in annual end-user billings from Intelisys alone

• A total addressable market (TAM) between $200–400 billion, according to ScanSource CEO Mike Baur

• An estimated 10,000 active Trusted Advisors are serving clients today

• Some vendors now rely on advisors for 100% of their sales

Opex notes that the channel is “no longer emerging—it’s foundational,” and private equity investments are rapidly consolidating firms into scalable TA platforms.

What About Pricing?

This is where the model surprises most people: there’s price parity between buying direct and buying through the channel. Here’s why that matters:

Built-In Cost Efficiency

Whether you buy direct from a vendor or through a Trusted Advisor, the cost to you is the same. That’s because vendors allocate a portion of their budget to customer acquisition—either paying internal sales teams or external channel partners. It’s just a different route to the same result.

Contracts That Protect Parity

Most vendors have agreements in place that guarantee equal pricing across direct and indirect channels. This keeps the playing field level and ensures you aren’t penalized for working with a TA.

Vendors Actually Save Through the Channel

With channel sales, vendors avoid paying full-time salaries, bonuses, and overhead. Instead, they only pay commission after revenue is generated, making it a lower-risk, more scalable model.

More Value, Same Price

With a TA, you don’t just get access to pricing—you get:

• Broader vendor options

• Strategic advice from a neutral expert

• Pre-sale consulting and post-sale lifecycle support

• Access to engineering resources and competitive insights