The technology channel has been pronouncing the death of the value added reseller for the better part of a decade. Cloud computing would eliminate hardware resale. SaaS would bypass the channel entirely. Direct-to-customer models would make the middleman redundant. None of it happened. The VARs growing fastest today are not the ones who resisted change. They are the ones who evolved their definition of value-added from product configuration to complex solution architecture, compliance integration, and managed services delivery.
Understanding what a value added reseller is, how the model differs from a managed service provider, and why vendors continue to invest heavily in VAR channel programmes is essential knowledge for any technology business operating in the B2B market. This article explains the VAR model clearly, examines how it has evolved in a cloud-first environment, and covers what both vendors and buyers need to know about working effectively with value added resellers in 2026.
The Value Added Reseller Model: What It Actually Means
A value added reseller purchases technology products, typically hardware, software, or cloud services, from manufacturers or distributors and resells them to end customers with additional services included in the transaction. The “value added” component is the key distinction: the end customer receives not just the product but a configured, integrated, and supported solution.
What the value addition looks like in practice
For a network VAR, the added value might be designing and rolling out a network across several sites on Cisco hardware. It sets the security rules, trains the client's IT staff and gives first-line support for the first year. For a security VAR, it might mean checking the client's security, choosing the right EDR tool, rolling it out across the firm and handing over a security runbook. For a cloud VAR focused on Microsoft Azure, it might mean moving on-site workloads to the cloud, cutting cloud costs and setting up managed operations.
The common thread across all of these examples is that the VAR is doing work that the manufacturer cannot do efficiently at scale: the local knowledge, the client relationship management, the implementation expertise, and the ongoing support that transforms a technology product into a working business outcome. This is why vendors maintain channel programmes. The DiscoverMSPs VAR directory provides a clear view of how this specialisation is distributed across technology categories and geographies.
Revenue model and margin structure
Value added resellers earn revenue from two primary sources: product margin on the resale of technology, and professional services fees on the implementation and support work. Product margins in the technology channel have compressed significantly over the past decade as cloud procurement has shifted some categories toward direct vendor sales. The VARs who have maintained strong profitability have compensated by growing the professional services component of their revenue mix, which carries substantially higher margins than product resale and is less susceptible to price competition.
VAR vs MSP: Understanding the Distinction That Matters
The question I encounter most frequently from both vendors and buyers when discussing the channel is: what is the difference between a value added reseller and a managed service provider? The answer has a clean structural component and a messier practical reality.
The structural difference
The structural distinction is straightforward. A value added reseller earns revenue primarily from technology transactions: selling and implementing a product or system. The commercial relationship is episodic – it begins at project initiation and concludes at project completion. A managed service provider earns recurring revenue from ongoing operational management under a long-term contract. The commercial relationship is continuous – it does not conclude when a project is delivered but persists for the duration of the contract, typically one to three years.
The practical reality: many firms are both
The practical reality is that the VAR and MSP models have converged significantly. CompTIA’s channel research documents a sustained trend of VARs adding managed services to their portfolios: once a VAR has implemented a technology for a client, managing that technology on an ongoing basis is a natural and commercially attractive extension of the relationship. Many firms now operate both models simultaneously, which is one reason the distinction between VAR and MSP is increasingly difficult to maintain cleanly. SaaS resellers and ISVs represent another closely related category that occupies the space between pure product resale and managed services delivery.
Why Technology Vendors Still Need VAR Channel Programmes
The persistence of the VAR model despite the structural changes in technology procurement is not accidental. Vendors who have attempted to bypass the channel in favour of direct sales consistently discover that the economics of direct sales at scale do not work for most technology categories. The channel solves specific problems that direct sales cannot address efficiently.
Local market access and client relationships
A tech vendor in San Francisco cannot build trust with IT leaders at thousands of mid-size firms, from Dallas to Manchester to Singapore, as cheaply as local VARs can. VARs have spent years building client ties, industry skills and local trust. A vendor can tap into that through a good channel programme, at far lower cost than building its own sales team to match.
Implementation capacity at scale
Even vendors with a strong sales team hit a limit. They cannot install their tech at thousands of client sites at once. VARs give them installers spread across many places, so the tech goes in widely and correctly. A well-supported VAR channel multiplies a vendor's services capacity without adding the same headcount or cost. Verified channel partner data from DiscoverMSPs helps vendors find the right VARs for their product and market.
Vertical expertise that generalises poorly
Technology deployments in healthcare, financial services, manufacturing, and legal sectors require domain expertise that generalises poorly across verticals. A VAR who has built their practice around healthcare IT carries HIPAA compliance knowledge, clinical workflow understanding, and EHR integration expertise that a generalist sales team cannot replicate. Vendors who distribute through vertically specialised VARs gain access to this expertise for every client the VAR serves, which improves deployment quality and client outcomes without requiring the vendor to build that vertical knowledge internally.
Looking for verified value added reseller contacts for your channel programme? Browse the DiscoverMSPs VAR directory to find reseller partners by technology specialisation and geography.
How the VAR Model Has Evolved in a Cloud-First Market
The VAR model of 2026 is not the VAR model of 2015. The shift to cloud computing, the compression of hardware margins, and the rise of subscription-based software have fundamentally changed what value addition means in the channel.
From product configuration to solution architecture
The VARs growing in 2026 have moved up to more complex work. They no longer just set up servers and install standard software. They design multi-cloud setups, roll out zero-trust security, build compliance into new systems and report results in business terms, not tech specs. This takes far more skill and earns far higher margins than plain resale. That is why the VARs who made the shift earn more today than when hardware margins were higher.
Recurring revenue through managed services integration
The structural weakness of the pure VAR model is revenue unpredictability: project-based businesses experience feast-and-famine cycles tied to client capital expenditure decisions. The VARs who have added managed services to their offering have addressed this weakness by building a recurring revenue base that stabilises the business and provides the financial foundation to invest in talent and capability. This evolution toward the managed services model is documented across the IT channel and is the primary driver of the blurring distinction between VAR and managed service provider categories.
Frequently Asked Questions
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1.What is a value added reseller?
A value added reseller, or VAR, is a company that purchases technology products from manufacturers or distributors and resells them to end customers with additional services layered on top. These services typically include system integration, customisation, installation, training, and ongoing support. The value addition distinguishes a VAR from a simple product reseller: the end customer receives a configured, integrated solution rather than a product from a warehouse.
2.What is the difference between a VAR and an MSP?
The key difference is how they earn money. A value added reseller earns mainly from tech sales, and the deal ends when the project is done. A managed service provider earns repeat revenue from running IT under a long contract. Many firms now do both. They install tech as a VAR and then manage it every month as an MSP.
3.How do vendors find and work with value added resellers?
Tech vendors find VARs through channel programmes with deal registration, margin rewards, tech certificates and joint marketing. The best way to find the right VAR partners is a verified contact database you can filter by tech skill, region and industry. DiscoverMSPs supplies verified VAR and reseller contact data, so vendors can find and approach good channel partners directly.
4.What certifications do value added resellers typically hold?
VAR certificates depend on the tech they sell. Microsoft Gold or Silver Partner status is standard for Microsoft resellers. Network VARs hold Cisco Premier or Select. Cloud resellers hold AWS Partner Network tiers. Security VARs often hold CrowdStrike, Palo Alto Networks or Fortinet badges. CompTIA Security+ and other vendor-neutral badges are a common base at VARs of every size.
5.Is the VAR model still relevant in a cloud-first world?
Yes, but it has changed a lot. Margins on plain product resale have shrunk, as cloud buying moved some purchases straight to vendors. The VARs doing well in 2026 now add value through services, cloud design, security rollout and compliance, not hardware resale. Their skill in installing and linking complex tech still matters a great deal, in cloud, hybrid and on-site setups where the setup is hard.
6.How do I choose between a VAR and an MSP for my business?
Pick a VAR for buying and rolling out tech when you have your own IT team to run it afterwards. Pick an MSP when you need someone to run IT every day, not just deliver a project. For many mid-size firms, the best answer is a provider that does both. It installs the tech as a VAR and runs it as an MSP, so knowledge carries across the whole tech lifecycle.
The VAR in 2026: Value Addition Has Never Been More Important
The narrative that cloud computing would eliminate the value added reseller was always based on a misunderstanding of what value addition actually means. Cloud made hardware resale less important. It made solution architecture, security integration, compliance management, and operational expertise more important, not less. The VARs who understood this early are among the most profitable technology businesses in the channel today.
For vendors building a channel, the VAR is still one of the most efficient routes to market. It brings installers in many places, local ties and industry skills that direct sales cannot match at the same cost. The key is finding the right VARs for your product and market. That takes verified data, not a guess at every reseller in a region.
DiscoverMSPs provides verified VAR, MSP, and channel partner data segmented by technology specialisation, geography, and vertical focus. It is the starting point for any vendor building a channel programme that is designed to convert, not just to grow a partner count.
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