The VAR is Dead Redux

I have written a few blogs surrounding the general theme of "the VAR being dead" and it seems that these little vignette's have caused quite a stir. In actuality, I don't think it is causing very much of anything but there are some people out there who consider themselves aficionados of everything "VAR" and therefore, they feel slighted. I would like to clear the air; I will not print a retraction because I continue to stand by my earlier statements. Instead, I would like to further clarify this topic so that there is no misunderstanding on this issue.

First, the term VAR (or value added reseller) has been in use for quite some time. It has gained popular meaning specifically around those companies who provide break/fix or reactive IT management…time and materials business models. The term MSP (Managed Service Provider) has been around for roughly 15 years; not as long as the term VAR but it is certainly not new.

Second, there are extant companies using the term VAR to describe themselves and what they do. These companies usually do not use the term VAR in public or when describing themselves to clients, but they may still use it when talking to other channel professionals. Technology vendors also still use the term VAR, most often when describing their channel. It tends to be a very generic term and that is why these vendors use it a lot.

Third, it is generally accepted within the IT channel that break/fix or reactive IT management is no longer an accepted practice. When I say accepted practice I mean it is gradually being phased out in lieu of proactive IT management, otherwise known as managed services. While there may be companies (even some who call themselves VARs) who still resell products, there are very few of them who do not derive at least a small percentage of their revenue from a managed service offering.

Now, you may be asking yourself questions: how does Charles know all of this? This is my opinion. It is, I believe, backed up by reality and a healthy dose of logic. I have been in managed services for nearly 10 years. I have talked to more IT companies than I can recount (yes, even VARs!). When I say I have talked to them, I don't mean chatting with someone for 20 minutes at a conference. I mean in depth analysis of these companies, charting their progress over the years, experiencing firsthand their trials and tribulations and successes as they took their first steps as managed service providers.

Many of these companies have been very small. In fact, it is the small VAR trying to change into a MSP for whom I have the most affection. These companies are taking real risks and making changes to their business because they believe it is the right thing to do; not because anyone (least of all me) told them they had to buy some software and change their name to MSP. I respect that kind of dedication and entrepreneurial spirit.

So, I stand by my earlier statement. I believe the VAR is dead. This does not mean that IT companies are no longer needed. This means that break/fix and reactive IT management companies who solely rely on revenues from products they resell must either change their business model or face potential extinction.

Now, if you disagree with what I've written, we can always wait around for another 10 years and see which one of us is correct.