Enterprise software · Answer

Should a B2B software company sell direct or through channel partners?

In security the decision is effectively already made and it was made against direct — 92% of global cybersecurity spending ran through the channel in Q4 2025. The number worth knowing is the one underneath it: concentration arrives with the channel, and receivables concentration runs higher than revenue concentration in every vendor we could read.

The evidence

The disclosed channel shares.

Netskope 94.8% indirect in H1 FY26. Tenable 94%. Zscaler 84% — $2.07B of total, first nine months FY2026. Fortinet, SentinelOne and Varonis each state in their own filings that substantially all sales are fulfilled through channel partners.

Security is moving opposite to the rest of IT.

Channel share of all global IT spend is falling — 69% in 2025, 65% in 2026, 63% forecast for 2027. Security is rising against that trend, from the same research house.

Every documented vendor move went one way.

Across 2025–26 we found no vendor moving toward direct. CrowdStrike's MSSP business grew from under $100M to more than $1.3B in just over three years. Proofpoint, SonicWall, Sophos, ThreatDown and Rapid7 all restructured toward partners.

The concentration that creates is understated.

SentinelOne discloses two channel partners at 18% and 12% of revenue — 30% through two counterparties on a business above $1B. Their accounts-receivable shares are 21% and 14%. Fortinet discloses a single distributor at 32% of total net accounts receivable. The cash exposure is larger than the revenue exposure, and only the revenue number tends to get discussed.

No margin figure appears here, and that is deliberate.

No deal-registration discount rate, distributor discount, or direct-versus-channel gross-margin comparison is publicly sourceable for any security vendor. Partner programme guides say “margin uplift” without numbers. Any margin figure in this answer would be a guess, so there is none.

What would have to be true for this to be wrong

These figures are drawn from security vendors, where the channel is unusually dominant. If your category's buyers procure software directly and your product needs no local implementation, the base rate above is the wrong base rate and the honest answer is that we have not measured yours.

Sources: SEC EDGAR full-text search and company filings, with each figure's period stated above. AI-answer measurements are CULT+MATH primary research, criteria registered before retrieval. Published 2026-10-21 by Ipalibo Da-Wariboko, CULT+MATH LLC. Figures carry the date they were pulled; where a number could not be sourced, this page says so and gives none.

This is one of six decisions covered in the enterprise software decision brief — each with the evidence behind it, who owns it, who it is contested with, and what would have to be true for the answer to flip.

See the brief →