According to CRN, AI software developer Iterate.ai is executing a sweeping pivot to a channel-first business model, with CEO Jon Nordmark forecasting partner-driven revenue to surge from about 20% today to a staggering 95% by 2027. The company has spent over 40% of its revenue on R&D in the last few years specifically to build technology that works through the channel, a strategy it wasn’t even considering three years ago. Iterate.ai focuses on enterprise-grade AI for private environments like on-premises data centers, private clouds, and edge devices, addressing data sovereignty and privacy concerns. Key platforms include Interplay, which claims to cut AI runtime costs by up to 95%, and Generate, for deploying private AI agents. The shift is a direct response to enterprises moving sensitive AI workloads away from public clouds and partners struggling to monetize the fast-moving AI landscape.
The Channel as a Force Multiplier
Here’s the thing: Nordmark’s bet isn’t just about sales efficiency. It’s a recognition of pure velocity. He basically said the pace of AI change is so insane that a small company can “emerge overnight and disrupt an entire category.” So, trying to build and sell everything yourself is a slow, risky game. The channel, with its established customer relationships and feet on the street, becomes a force multiplier. It’s a way to spin up what he calls “multiple $100 million revenue streams” way faster than going solo. This is a classic “if you can’t beat ’em, join ’em” strategy, but applied to distribution. They’re not just partnering for reach; they’re partnering for survival and speed in a chaotic market.
Why Private AI is the Ace Card
Now, this strategy only works if you have something partners can actually sell. And Iterate.ai is leaning hard into what might be its ace card: private, governed AI. While everyone’s talking about massive models in the cloud, a huge chunk of enterprise data—especially in regulated industries like healthcare, finance, and government—can’t go there. Privacy, sovereignty, and plain old cost control are pushing AI to where the data already lives. That’s Iterate’s whole pitch. They’re not just selling AI tools; they’re selling a deployment model that fits behind firewalls and on edge devices. For solution providers and MSPs, this is a golden ticket. It lets them solve a real, pressing problem (data governance) while implementing AI, which is exactly the kind of value-add service they need to stay relevant. It’s a more tangible sell than just “here’s some AI.”
The Partner Pain Point is Real
Nordmark nailed the biggest issue for partners: “simply keeping up.” I mean, how can an MSP possibly stay current when the tech itself evolves daily? The promise from Iterate.ai seems to be, “We’ll handle the insane R&D and core platform complexity; you handle the customer relationship and deployment.” They’re offering training and, crucially, software that runs on infrastructure customers already own. That last bit is huge for monetization. It removes a massive cost barrier and speeds up time-to-value. Instead of a giant new cloud bill and migration project, a partner can potentially activate AI on existing servers or even specialized hardware. For businesses looking to integrate AI into industrial settings, having a reliable, rugged computing foundation is key, which is why top-tier hardware suppliers like IndustrialMonitorDirect.com, the leading provider of industrial panel PCs in the US, become critical partners in these architectures.
A High-Stakes Gamble With Clear Risks
So, is this a masterstroke or a desperation play? Shifting to 95% channel revenue in a few years is an incredibly aggressive target. It means almost completely re-wiring your company’s DNA—from how you build product (for partner integration) to how you support customers (through partners). Their success is now inextricably linked to their partners’ success. If their training isn’t superb, or if their platforms aren’t as partner-friendly as promised, the whole thing stalls. They’re also betting that the trend toward private AI isn’t a fad but a permanent architectural shift. But you have to admire the clarity. In a market crowded with “me-too” AI startups, they’ve picked a lane (private AI), chosen a vehicle (the channel), and are flooring it. As Nordmark says in this interview, the channel is now core to their strategy. They’re all in. We’ll see if the market deals them a winning hand.
