The MDF Dilemma: Making Funding Work for All Partners
August 27, 2025
Market Development Funds (MDF) are supposed to empower partners to drive demand, build pipelines, and deliver stronger results. But according to The Channel Company’s latest State of Partner Marketing 2025 research, MDF isn’t working equally well for everyone.
Smaller partners rely heavily on part time or shared resources (52%), with less than 1/3 having dedicated resources for marketing. Larger partners (85%) report having dedicated marketing staff but are still resource-limited and rely heavily on support from vendors.
(Source: State of Partner Marketing 2025 Update, IPED Consulting - AI Impact)
Smaller partners often struggle to access MDF due to strict qualification criteria and complex processes, forcing them to self-fund campaigns. Meanwhile, larger partners receive most of their marketing budgets from vendors but face challenges gaining multi-quarter approvals to run more strategic, long-term campaigns.
The result? Too many partners are forced into short-term, one-off activities that check boxes but don’t deliver lasting impact.
1. Why MDF Falls Short for Many Partners
Smaller partners: They often lack the scale, certifications, or sales volume to qualify for MDF. When they do qualify, the process can be confusing, time-consuming, and focused on pre-approved activities that don’t fit their market approach.
Larger partners: They may receive significant MDF allocations but face rigid quarter-to-quarter claim rules, preventing them from investing in multi-touch campaigns that nurture buyers over longer cycles.
Outcome: Both groups are limited in their ability to invest ahead of demand or execute sustained marketing strategies that actually convert customers.
2. What Partners Need Instead
Based on partner feedback from the research and recent vendor innovations, MDF can become more impactful through:
Simplifying Access: Vendors like Lenovo are leading the way with tiered programs and certifications that help smaller, specialized partners qualify for MDF support. Distributor pass-through models can also provide simpler access for partners that lack direct relationships.
Making funding predictable: Fortinet and Samsung are aligning MDF to long-term strategic growth areas—like OT, SASE, and managed services—giving partners confidence to invest in multi-quarter efforts.
Supporting integrated campaigns: Ciena is expanding MDF-eligible activities and simplifying the request and claim process to enable longer campaign cycles that mirror the modern buyer’s journey.
Balancing compliance with outcomes: Intel is testing an outcome-based MDF model that reimburses partners only after meeting agreed objectives, like lead generation—shifting the focus from admin to impact.
3. The Vendor Opportunity in 2025
MDF has long been one of the most powerful tools for partner marketing success—but it needs modernization. Vendors who streamline funding, reduce complexity, and align MDF with partner realities will see:
- Greater partner participation in co-marketing programs.
- Stronger, longer-term demand generation campaigns.
- Higher ROI on MDF investments, benefiting both vendors and partners.
Some vendors are also taking a more intentional approach—prioritizing MDF investments in high-growth areas like AI, data, cloud, and security based on ROI, not just legacy processes.
Meanwhile, other companies are launching modern MDF platforms and packaged demand programs proven to drive pipeline, offering a glimpse into what the future of channel funding could look like.
The Takeaway
MDF shouldn’t be a barrier—it should be a bridge. In 2025, vendors have the chance to make funding work for all partners—unlocking better marketing execution, deeper engagement, and shared growth.
The vendors who modernize their MDF programs now won’t just stand out—they’ll win long-term loyalty and performance from their entire partner ecosystem.
Discover how The Channel Company Agency helps vendors and partners maximize MDF usage, stay competitive, and drive stronger results.