I spend a large percentage of my day speaking with and meeting our current and potential clients. These companies are typically SMBs, ranging from financial services firms to EDU to non-profits to just about any other flavor of SMB. Recently I’ve been getting the question “What type of IT vendor are you…a VAR or MSP?”
My general response goes something like this:
“First, let me tell you the difference. A Value Added Reseller (VAR) is the IT solutions provider model that really started Day One in IT. It’s a company that historically focuses on selling hardware (and sometimes software) from vendors like Cisco, HP, etc. It also sells maintenance contracts on top of the hardware, and sells professional services projects. And, all of this work is performed at the client site, and is largely transactional.”
I go on to say: “A Managed Services Provider (MSP) is actually the next-gen VAR. The MSP came about because the cost of technology has dropped considerably, but has also become exponentially more complex. The client needs help understanding, managing, and utilizing this complex technology, but it’s not cost-effective to have their own staff to do so. The MSP has economies of scale to do the job at a lower cost, utilizing technologies designed specifically for MSPs so they can do all the work remotely. On top of all that, the MSP charges a flat and predictable monthly fee, so it’s a win-win for the client and the MSP.”
I tell them: “We’re a Modern MSP. We like the MSP model because of the recurring revenue it provides us, and the value for on-premises technology it provides for our clients. But we take the MSP model to the next level by providing cloud and TaaS (Technology as a Service) to our clients. Together, cloud and TaaS focus on providing successful to every person at our clients’ companies, including the finance, sales, and marketing departments. It's all about offering technology as a service, just like the many other services we offer our in order to help their businesses.
“Oh...” the clients says.
Finally, I ask: “Why did you ask about what type of IT vendor we are?”
The reply: “I wanted to know if you were going to help me with cloud.”