The State of the Channel 2026 report, published by the Global Technology Industry Association, examines changing trends within the IT service provider (ITSP) sector in the UK and Ireland, with a particular focus on the role of artificial intelligence (AI).
Findings from a survey of 130 IT service providers suggest the industry is at a transitional stage in AI adoption. AI services were identified as a significant potential driver of revenue growth, although only 30% of service providers reported having fully integrated AI into their operations.
According to GTIA’s research, 35% of ITSPs in the region generate between 11% and 25% of their revenue from AI-related services. These services include both established AI products and newer technologies. In comparison, 7% of respondents reported that AI accounts for more than half of their revenue.
The report projects continued growth in AI-related services over the next 24 months. Some providers are expected to respond by expanding service offerings, strengthening vendor partnerships, and developing workforce capabilities.
At the same time, many ITSPs continue to rely on traditional service models. However, the expected growth in higher-value services indicates an increasing need for updated strategies and skills development.
The report also identifies challenges facing the sector, including talent shortages, cited by 37% of respondents, and broader external factors affecting business performance. Hybrid business models remain common, supporting diversification and risk management in changing market conditions.
The survey indicates that many ITSPs view AI as an important component of future growth, contributing to increased investment in technology and personnel. While growing technological complexity may create new opportunities, it also introduces operational and strategic challenges for providers.
GTIA states that future growth in the channel will depend on providers’ ability to adapt their operational frameworks to evolving AI capabilities.
