Source: channelfutures.com | Original report date: February 2020
Forrester Study Highlights Google Cloud Partner Opportunity
Forrester Research released the results of a Total Economic Impact (TEI) study commissioned by Google Cloud to assess the business opportunity for its channel partners. The study builds on an earlier Forrester analysis of the Google Cloud Platform (GCP) partner ecosystem first conducted in 2016, providing a multi-year view of how the channel opportunity has evolved.
The findings are significant for DevOps and cloud engineering teams whose organisations work with, or are considering becoming, Google Cloud partners.
Deal Sizes Have Grown Substantially
According to Forrester, partners reported notable increases in average deal size compared to the baseline figures captured in 2016:
- GCP migration engagements: Average deal size has grown three to six times since 2016.
- Cloud modernisation and application development: Deal sizes have grown three to five times over the same period.
These figures suggest that as enterprises mature in their cloud adoption journeys, the scope and complexity — and therefore value — of partner engagements has increased substantially.
Where Partner Revenue Actually Comes From
One of the more important findings for anyone building a Google Cloud practice is the revenue mix: approximately 70% of Google Cloud partner revenue comes from professional and managed services, not product resale. This underlines a broader shift in cloud channel economics away from pure resale and toward services-led business models.
Forrester’s analysts broke down professional service margins across 19 partner interviews:
“Professional-service project gross margins ranged from a low of 25% to a high of 60% across the 19 interviewees, with higher margins associated with higher value analytics, AI/ML, cloud modernisation and cloud-native application development projects. Lastly, partners that built their own custom intellectual property on or for Google Cloud solutions were able to sell these offerings to customers, often attaching them to larger cloud engagements and earning margins in excess of 60%.”
— Forrester Research, Total Economic Impact Study (commissioned by Google Cloud, 2020)
The Four Big Partner Opportunities Forrester Identified
Forrester outlined four primary revenue streams and opportunity areas for Google Cloud partners:
1. Professional and Managed Services
This is the highest-value category and includes strategy and business consulting, cloud migration, cloud modernisation, cloud-native application development, and data, analytics, and insight services. Margins can reach up to 60%, depending on specialisation level and the degree of automation and repeatability embedded in service delivery.
2. Product Resale
Resale of Google products — including GCP, Google Workspace (formerly G Suite), Chrome Enterprise, and Google Maps Platform — carries margins in the 10–30% range. While lower than services, resale provides a predictable revenue base and often underpins broader services engagements.
3. Proprietary Software and Custom IP
Partners who build their own software or solutions that extend or complement Google Cloud technologies — or that address specific vertical business problems — can command margins in excess of 60%. This is the highest-margin opportunity in the ecosystem and often gets attached to larger cloud engagements.
4. Google Cloud Certifications
Continued investment in official Google Cloud certifications allows partners to justify higher service fees, differentiate from competitors, and unlock higher-tier partner status. Forrester flagged certification attainment as a direct enabler of partner margin expansion.
The Strategic Shift: From Resale to Custom Solutions
A recurring theme in the Forrester findings is the advantage of moving beyond resale toward custom solution development. Partners that make this transition access a larger total addressable market and command significantly higher margins. Forrester explicitly noted that building custom IP on GCP results in “a larger total addressable market and higher margins.”
Carolee Gearhart, who was serving as channel chief at Google Cloud at the time of the report, echoed this in a February 6, 2020 blog post:
“We know that it’s still early days for cloud migration across industries, but a few key product areas stood out as opportunities for partners — particularly, data analytics, artificial intelligence, machine learning, and building custom intellectual property. Customer engagements in these areas are leading to repeat business and larger contract values for partners, Forrester found, so building expertise can help further bolster partners’ value proposition and differentiation in the marketplace.”
— Carolee Gearhart, Channel Chief, Google Cloud (February 2020)
What This Means for DevOps and Cloud Engineering Teams
For organisations evaluating their cloud strategy or partnership model, the Forrester findings point to several practical takeaways:
- Services beats resale for margin: If your team is building a cloud practice, leading with services — particularly in AI/ML, data analytics, and cloud-native development — will generate higher returns than resale alone.
- Custom IP compounds value: Packaging repeatable solutions as proprietary offerings dramatically improves both margins and scalability.
- Certifications matter commercially: Google Cloud certifications are not just technical validation — they directly influence the fees a partner can charge.
- AI and analytics are the growth edge: Both Forrester and Google Cloud leadership identified data, analytics, AI, and ML as the highest-growth engagement areas in the partner ecosystem.
Other Channel News from February 2020
Alongside the Forrester Google Cloud findings, the original report also noted two additional channel developments from the same period:
- Nutanix appointed a new executive to lead its channel sales organisation.
- Atos and Maven Wave finalised their partnership or acquisition arrangement, with the combined operation described as up and running.
Details on both items were not provided in the original source teaser and have not been independently elaborated here.
This article is based on reporting by Channel Futures and a Forrester Total Economic Impact study commissioned by Google Cloud, published in early 2020.