When we use the general term “VAR” (Value Added Reseller) we also include “MSP” (Managed Services Provider) as well as ITSP (IT Solution Provider) and ISV (Independent Software Vendors). There are several names that companies who sell IT solutions prefer to be called. It can be a “mouth full” to include all of the possible names so we tend to use “VAR” as a general term to represent all companies that sell IT solutions to end-customers.

That said, there are distinct differences between traditional VARs, MSPs, ITSPs and ISVs. In general, VARs sell more hardware products as well as services, including some managed services. MSPs tend to primarily sell managed services on a recurring monthly basis but are also selling hardware to drive services. ITSPs typically offer whole solutions to specific types of customers that can include hardware, software and services, including application development. ISVs have developed specialized applications to solve specific business problems and work with everyone to sell including direct to end-users.

And, don’t forget DMR, Retail, Consultant, Born-in-the-Cloud VARs and so on. There are about about a dozen different labels!

The lines between all these companies are blurring more as each day passes. It may ultimately depend on the percentage of what each company sells when it comes to products, solutions and managed services. Regardless of what each of these companies do, the next generation of “VARs” will be selling a significant amount of recurring revenues, including a variety of Managed or Cloud services.

The race is on towards the transformation to the next generation channel. It is being fuelled by the way end-users are buying technology in a consumption “pay-as-you-use” model or an operational expenditure instead of a capital expenditure.