AI services set to drive UK & Ireland channel growth

GTIA has published its State of the Channel 2026 report for the UK and Ireland, finding that AI services are now the leading expected source of revenue growth for IT service providers in the region.

The survey of 130 channel professionals found that only 30% of IT service providers have fully embedded AI into their business models, despite growing expectations that it will drive sales. A further 43% described themselves as "AI invested", with transformation still under way.

That gap between ambition and execution runs through the findings. More than a third of providers said they already derive between 11% and 25% of revenue from AI-related services, while 7% said AI products and services account for more than half of their revenue.

At the same time, 42% of respondents said AI services would be the top revenue growth category over the next two years. Cybersecurity ranked second at 37%.

Carolyn April, vice president of research and market intelligence at GTIA, said the market had moved beyond early testing.

"AI hype is fast turning into AI reality, making this a crucial time for providers who must make important decisions about their business strategy. We are well past the experimentation phase. The key differentiator now is how strategically and operationally mature a provider's AI usage is. Those who can successfully adopt and monetize AI will be best placed to navigate this sea change," April said.

Growth outlook

Growth expectations were strongest among providers expanding their AI offers and investing in skills and supplier relationships. Nearly a third, or 31%, expect AI revenue to grow significantly over the next 24 months.

Even so, established channel activities remain important. Most providers still prioritise infrastructure-led services, while hybrid business models continue to dominate. Managed services, product sales and project work are commonly combined as firms spread risk across multiple income streams.

April said the balance between legacy services and newer lines of business was becoming more pronounced.

"Most ITSPs continue to prioritise classic infrastructure-centric services, but growth expectations are increasingly concentrated in newer, higher-value offerings. The gap between what ITSPs sell now and where they expect growth highlights the opportunity, but also the need for new skills, pricing and delivery models as AI shifts to a business imperative," she said.

Skills pressure

The findings also point to operational strain as providers adapt to the shift. Workforce skills and talent shortages were cited by 37% of respondents as the biggest inhibitor to channel success.

External factors were named by 34% as a constraint, while 16% were concerned about the availability and adoption of AI solutions. This suggests AI is emerging both as a source of growth and as a potential source of disruption for service providers that lack the staff, structure or customer demand to scale new offers quickly.

Broader market conditions remain supportive for many firms. More than two-thirds of respondents said they are on track to meet their business goals, and 49% said rising technology complexity is increasing demand for IT expertise and supporting the health of the channel.

The report depicts a sector in transition rather than one already reshaped by AI. A minority of firms have formal AI leadership, clear operating strategies and meaningful AI revenue, while a larger group is still trying to turn interest in the technology into repeatable business.

For providers across the UK and Ireland, the challenge now appears to be less whether AI will matter than how quickly they can build the commercial models and skills needed to turn that demand into sustained revenue.