The Days Of The Traditional VAR Are Numbered. Are You Ready?

At the start of 2001, I was running a successful solution provider business where we were busy, profitable and desperately trying to keep up with myriad partner programs that sprouted up daily. Like most value-added resellers-cum-solution providers, we were driving more of our business to the services side of the equation rather than traditional product offerings. But still, most of our business was wrapped around some hardware or software component.

It suddenly dawned on me that I was doing all the work for the vendors, and we were splitting the proceeds unequally. So, I left that business to start a different sort of company, predicated on the concept that a professional services firm could exist on its own, independent of vendors or manufacturers.

The customers we serve now aren't looking for certificates. They are looking for references, previous successes and a proven track record. These clients have embraced our business model, especially the fact that we don't sell any hardware or software. Instead, we find other suppliers for them, either local or online, who can cater to their needs. This way, we get the best price for our clients without having to suffer the angst of low margins. And, of course, we get paid to help them find the right products and the best price.

Unfortunately, just because we've changed doesn't mean the vendors have. For now, we have no choice but to play the game, seek those certifications and punch those tickets,because it's still a necessary evil to gain access to support channels.

But it won't last much longer. I can see clearly that vendors are looking to the channel more and more as influencers and less for product fulfillment. Resellers who refuse to adopt a mostly-if-not-completely service-based model will find themselves squeezed by lowered margins and customers who choose to do business directly with vendors.

Most of us learned long ago that in this business the only constant is change. The days of the traditional VAR are numbered. You can wait for it to smack you upside the head or you can get on that board and surf the wave all the way to shore.

Luis Alvarez
President and General Manager
Alvarez Technology Group

Editor's Note: This essay was submitted by a member of CRN's editorial cabinet. Look for additional opinion pieces throughout the year.