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How do you prefer to be called in the IT Channel?

In the same breath, we usually refer to the channel as VAR/MSP and ITSP. It’s a mouthful and earful. Depending on who you are speaking with, the acronym changes. I did a sample survey of my contacts to ask them what do they prefer to be called – “a VAR or MSP”?

Surprisingly, most said they they did not care as they are more interested in what their end-customers call them. It was clear that the word VAR or MSP is mostly unknown to the end-users. That said, of the ones who had a clear opinion, 64% said they think of themselves as a VAR and 46% considered themselves a MSP. For this exercise, I removed the ones who said ITSP or IT Solution Provider, which was about half.

When I speak to vendors, depending on the type of vendor, I got different answers. For vendors offering a solution specifically for managed services, they feel that the name they hear the most is MSP. For all other vendors, VAR and IT Solution Provider was what they hear the most. I think there are some identity issues as many traditional VARs transition into an MSP business model. However it seems like most are playing in some type of hybrid model, for now.

If you were to combine the total number of channel partners of PSA and RMM companies, you are probably somewhere around 25,000 companies. And of those, how many are really pure-play MSPs? It’s difficult to really know since most companies keep their numbers secret. If we assume that about 25,000 are MSPs, then that only represents about 20% of the channel (again, depending on whose numbers you use). We know about 65,000 VARs and MSPs and that has been filtered down (over many years) from our larger list of about 130,000, so we are monitoring this transition very closely.

My conclusion is that its roughly a 60% VAR / 40% MSP split on how channel companies, with an opinion, prefer to be called and I also think depending on who they talk to, they can switch up these labels. I also get the feeling that the word VAR seems to represent the past type of channel partner and the word MSP represents the next generation, but I do not think the final chapter is written yet.

Cloud is the channel game-changer as just about every type of channel partner can and do sell Cloud/SaaS. Are you a MSP if you sell Cloud? Most SaaS companies do not identify with either VAR or MSP, but they are also providing IT solutions to end-users!

It’s confusing… For our main channel conferences, we named it ChannelNEXT over a decade ago, as we envisioned it as the place where all CHANNEL partners come to build their business into NEXT generation of the channel. Today, 70% of our exhibitors are cloud-related. When we started, it was zero cloud. For our educational channel events we call them VARTrends | MSPtrends where 100% of exhibitors are cloud-related. There are trends in the channel for VARs and trends for MSPs so these two roads do run in parallel and sometimes they intersect.

It gets even more confusing as the IT, Telecom and POS industries intersect. In POS, many do think of themselves as VARs. In Telecom, it seems that the label “Agent” is popular.

Then of course, you have all of the other categories…

  1. Retailer/Big Box – Sells retail and/or online to anyone
  2. Reseller/Dealer – Sell anything IT to anyone
  3. Online Reseller – Sells IT through a web store to anyone
  4. VAR – Sells IT products, solutions and managed services to mostly businesses
  5. ITSP – Sells IT solutions and managed services to businesses
  6. MSP – Sells mostly Managed Services to businesses
  7. Born-in-the-Cloud VAR – Operates a virtual business selling Cloud and Managed Services solutions to businesses
  8. ReBorn-in-the-Cloud VAR – Reinvented traditional VAR selling Cloud and Managed Services solutions to businesses
  9. Lifestyle VAR – Operates a lean and mean business and will sell anything IT to a limited number of clients
  10. IT Consultant /Influencer/Agent – Sells mostly IT consultation services and helps in the procurement the IT solution
  11. IT Solution Developer – Develops exclusive IT solutions for specific vertical markets (sells directly and to other VARs)
  12. Public Sector VAR – Procures IT products for Government or Educational institutions
  13. POS VAR – Sells to retail and restaurants
  14. Telcom Agents – Sells telephony and broadband
  15. SaaS providers

And I am sure there are more… Just wish we could get simple again and call everyone in the channel a “Reseller” – Any company that sells technology solutions to end-users. I could also live with ITSP.

If you had to pick just one name, what would it be?

Julian Lee