What Is a Value-Added Reseller? How VARs Work & Their Future

A value-added reseller (VAR) is an IT company that resells hardware, software, cloud services, or other technology while adding its own services or expertise. Unlike a basic reseller that primarily sells a product or license, a VAR typically adds value through services such as consulting, configuration, customization, systems integration, implementation, training, cybersecurity, or technical support.

VARs typically purchase or license technology from an original equipment manufacturer (OEM), software vendor, or distributor and package it with their own services before selling the complete solution to an end customer. The model allows customers to buy technology and the expertise needed to deploy it from a single provider.

The VAR model is also evolving. Many value-added resellers now combine traditional product resale and project work with cloud services, cybersecurity, managed services, AI implementation, and other recurring offerings, increasingly blurring the lines between VARs, MSPs, systems integrators, and other solution providers.

What is a value-added reseller?

A VAR purchases or licenses technology products from an original equipment manufacturer (OEM), distributor, or software vendor and adds its own services, expertise, integrations, or complementary products before delivering the resulting solution to an end customer.

A VAR may:

• Purchase or license products from an OEM, distributor, or software vendor.
• Add its own expertise, services, integrations, or complementary products.
• Resell the resulting solution to an end customer.
• Serve as a primary point of contact for implementation and support.

What makes a VAR different from a reseller?

The defining characteristic is the additional value provided around the product. Customization, legacy system integration, implementation expertise, ongoing maintenance, and trusted advisor services are areas where VARs add value.

Services may include: Needs assessment and solution design, configuration and customization, hardware and software integration, cloud migration, installation and deployment, cybersecurity and compliance support, training, and maintenance and technical support.

How does the VAR business model work?

A value-added reseller typically works between technology vendors or distributors and the organizations that ultimately use their products. Rather than simply reselling hardware or software, the VAR combines those products with its own expertise and services to create a more complete solution for the customer.

1. Vendor relationships: A VAR forms relationships with vendors, OEMs, or distributors.
2. Customer assessment: The VAR identifies the customer’s technical and business requirements.
3. Technology selection: It selects and procures appropriate products.
4. Value addition: The VAR adds configuration, integration, consulting, customization, or support.
5. Solution delivery: It delivers and supports the combined solution.

For example, a cybersecurity VAR might sell security software from several vendors while also providing assessment, implementation, configuration, employee training, and ongoing security services.

How do VARs make money?

VARs can make money from the margin between their cost of acquiring technology and the price they charge customers, as well as from the services they provide around that technology. Those services can include consulting, implementation, integration, customization, support, training, and managed services. 

Some VARs also generate recurring revenue through software and cloud subscriptions, managed services, maintenance agreements, or other ongoing customer relationships. As the channel has evolved, these recurring revenue streams have become increasingly important alongside traditional product resale and project-based revenue.

The mix varies by provider. A modern VAR does not necessarily depend exclusively on one-time product sales or flat-fee projects.

What should a VAR agreement cover?

A VAR/vendor agreement may address:

• Authorized products
• Pricing and discounts
• Sales territories
• Branding and marketing rights
• Training and certification
• Implementation and support obligations
• Data security and compliance
• Performance requirements
• Liability and warranties
• Termination terms

These agreements can vary substantially by vendor and partner program and should not be treated as standardized legal documents.

Types of value-added resellers

VAR type	Primary focus	Typical added services
Hardware VAR	Servers, storage, networking, endpoints	Configuration, installation, testing, deployment
Software and cloud VAR	Business software, SaaS, cloud platforms	Licensing, customization, migration, integration, training
Cybersecurity VAR	Security products and platforms	Architecture, configuration, compliance, security integration
Industry-specialist VAR	Healthcare, finance, government, manufacturing	Industry workflows, regulatory expertise, specialized integrations
Lifecycle or hybrid solution provider	Multiple technology categories	Procurement, deployment, management, support, recovery, disposal

These categories can often overlap, while a contemporary VAR may also operate as an MSP, systems integrator, consultant, or hybrid solution provider.

Benefits of working with a VAR

Customized technology solutions

VARs can combine products and services around a customer’s specific requirements rather than simply delivering an off-the-shelf product.

Customization is one of the central advantages of the VAR model, including integrating legacy systems with modern technology and development solutions around individual business objectives.

Specialized expertise and support

VARs can provide product expertise, implementation assistance, troubleshooting, training, and post-sale support.

VARs are often characterized as trusted advisors that can assist customers from initial consultation through ongoing maintenance.

Simplified procurement and vendor management

A VAR can coordinate multiple technology products and vendors, giving customers a single partner to help assemble and implement a broader solution.

Access to vendor programs and resources

VAR relationships with technology vendors can provide access to products, updates, training, technical resources, and vendor support.

Vendor relationships are identified as a key VAR advantage because they can give partners access to the latest products and associated resources.

Flexibility and scalability

VARs can customize solutions as customer requirements evolve. This can include expanding infrastructure, adding capabilities, or integrating new technology into an existing environment.

From a vendor perspective, VARs can also extend a technology company’s market reach, implementation capabilities, and expertise across different customers and industries.

Disadvantages and risks of working with a VAR

The benefits of customization and expertise can also create potential risks. These should be treated as evaluation considerations rather than characteristics of every VAR.

Higher costs and unclear pricing

Customized solutions may cost more than purchasing an off-the-shelf product directly. Customers should understand product margins, professional-services fees, and recurring costs.

Higher costs are a potential drawback of customized VAR solutions and recommendations, considering the return on investment.

Vendor lock-in and limited product choice

A VAR may have particularly strong relationships with certain vendors. Customers should understand whether recommendations are based on their requirements or constrained by the VAR’s existing vendor ecosystem.

Dependence on the VAR

Heavy reliance on a VAR can create challenges if the provider experiences business disruption or changes its service model. Dependency is one potential drawback of the traditional VAR relationship.

Inconsistent technical capabilities

Not every VAR has the same engineering resources, certifications, or delivery capabilities. Customers should evaluate the specific team that will deliver the solution rather than relying solely on the provider’s overall partner status.

Manufacturer and channel dependence

VARs can have limited control over vendor pricing, product availability, and road maps and product quality.

Channel conflict

From a vendor perspective, VARs can sometimes overlap with direct sales organizations or other channel partners. This doesn’t affect every VAR, but should be considered during the evaluation process.

When should a business use a value-added reseller?

A VAR is generally a strong fit when a customer:

• Needs hardware, software, and services bundled into one solution.
• Must integrate products from multiple vendors.
• Lacks internal implementation expertise.
• Operates in a regulated industry.
• Needs local or hands-on deployment.
• Requires customization or specialized workflows.
• Wants one partner accountable for delivery.
• Makes repeat technology purchases that benefit from standardization.

Good fit vs. weak fit

Good fit	Potentially weaker fit
Complex technology deployment	Simple commodity purchase
Multiple products/vendors	Customer can deploy internally
Need for integration	Direct vendor support is sufficient
Limited internal expertise	Little customization required
Regulated or specialized environment	VAR provides little value beyond fulfillment
Need for hands-on implementation	Global requirements exceed provider’s reach

How to choose a value-added reseller

Customers should evaluate:

1. Technical specialization: Does the VAR have relevant engineering capabilities?
2. Vendor authorization: Is its partner status current and verifiable?
3. Industry experience: Does it understand the customer’s workflows and regulations?
4. Customer fit: Does it serve organizations of comparable size and complexity?
5. Service coverage: What happens before, during, and after deployment?
6. Geographic reach: Can it support every required location?
7. Security practices: How does it protect customer systems and data?
8. Pricing transparency: Are product, service, and recurring costs separated?
9. SLAs and escalation: Are response times and responsibilities documented?
10. References and outcomes: Can it provide relevant customer evidence?
11. Financial and operational stability: Can it support the solution over its expected lifecycle?
12. Exit planning: Can the customer retrieve documentation, data, licenses, and configurations?

Questions to ask a potential VAR

• Which parts of this solution will your team deliver directly?
• Which vendor certifications apply to the people assigned to our project?
• How are product margins and service fees presented?
• What support is included after implementation?
• How do you handle vendor escalation?
• What SLAs will govern the engagement?
• How will you document the environment and transfer knowledge?
• Can you provide references for comparable projects?

VAR vs. reseller vs. OEM vs. MSP

Provider	Primary role	Revenue model	Typical relationship
Basic reseller	Sells products or licenses	Transactional product margin	Purchase-focused
VAR	Adds services to third-party products	Product margin plus project/service fees	Solution and implementation-focused
OEM	Develops or manufactures the original product	Product or licensing revenue	Product-focused
MSP	Continuously manages technology	Recurring subscription or contract	Ongoing operational relationship

VAR vs. basic reseller

The defining difference is meaningful service, expertise, integration, or customization around the product – not simply the ability to sell it.

VAR vs. OEM

An OEM creates the original hardware or software product. A VAR combines products and services to create an integrated solution for a customer.

OEMs are product-centric, while VARs specialize in integrating products and services to meet customer requirements.

VAR vs. MSP

The traditional distinction is based on the relationship and operating model between the partner and their end customers, including:

• Project vs. recurring revenue
• Implementation vs. ongoing management
• Formal SLAs
• Proactive monitoring
• Operational responsibility
• Risk management

VARs are more commonly project-oriented, while MSPs operate more as subscription-based providers with ongoing management responsibilities.

However, these models increasingly overlap. Some VARs have expanded into managed services and recurring revenue, blurring the traditional distinction between the two models.

How VARs are evolving

From product reseller to strategic advisor

The VAR role is increasingly extending beyond product fulfillment toward architecture, consulting, implementation, adoption, and business outcomes.

Partners often help customers move AI from experimentation toward secure, measurable business outcomes, including addressing security, data governance, and adoption – supporting a broader definition of “value-added”: that a partner’s value increasingly comes from expertise and outcomes surrounding the technology, not simply the product itself.

Managed services and recurring revenue

Some VARs have expanded into managed services as customers have sought ongoing technology management and support.

This shift can provide recurring revenue, deeper customer relationships, and a more predictable business model.

A key contemporary distinction is that a VAR does not necessarily need to become an MSP to add recurring services. Hybrid models can combine project-based integration with ongoing services.

Cloud and hybrid infrastructure

Cloud and hybrid environments have expanded the VAR opportunity beyond traditional hardware and software configuration.

A modern VAR can add value through: migration, integration, optimization, governance, multi-cloud complexity, or hybrid infrastructure management.

Cybersecurity and compliance

Cybersecurity has become an increasingly important part of the broader solution-provider relationship.

Modern partners can add value through: security architecture, implementation, governance, compliance, security integration, and ongoing security services.

The role of channel partners in security operations and advisory services is expanding, including MSPs expanding into CISO and compliance services – detailing how security expertise is moving into higher-value advisory relationships. 

AI services and governance

AI should be treated as a specific service opportunity, rather than simply another emerging technology.

Potential VAR services include: AI readiness assessments, infrastructure and data preparation, product integration, security and governance, training and adoption, and ongoing optimization.

Enterprise AI adoption increasingly involves governance, data strategy, security, and measurable business outcomes.

Just like how not every VAR has to become an MSP, not every VAR will become an AI company. Instead, AI gives VARs another area in which their traditional strengths – product selection, integration, implementation, and expertise – can be applied.

Global delivery and lifecycle management

Modern technology deployments can require more than initial installation. Depending on the provider, lifecycle services can include:

• Remote deployment
• International implementation
• Device tracking
• Cross-border compliance
• Recovery
• Asset management
• Disposal 

This represents an expansion of the VAR’s traditional role from procurement and deployment toward longer-term technology lifecycle support.

Examples of value-added resellers & VAR-adjacent organizations

Examples of large technology solution providers that operate as VARs or evolved from the traditional VAR model include CDW, SHI International, World Wide Technology (WWT), and AHEAD. These companies sell third-party technology while adding services such as consulting, integration, deployment, cloud services, cybersecurity, and ongoing support.

1. CDW: a leading multi-brand provider of information technology solutions to business, government, education, and healthcare organizations in North America and the U.K., helping customers design, orchestrate, and manage technology solutions.
2. Insight Enterprises: A global technology company empowering organizations of all sizes with Insight Intelligent Technology Solutions and services to maximize the business value of IT.
3. SHI International Corporation: A global IT solutions provider with over 35 years of success and $11 billion in revenue, offering expert guidance, support, and specialized procurement services to corporate, enterprise, public sector, and academic customers.
4. WWT (World Wide Technology): A technology solution provider with a focus on digital transformation, offering a comprehensive range of IT products and services, including consulting, integration, and managed services, to organizations worldwide.

VARs should not be confused with IT distributors. Distributors such as Arrow Electronics, Avnet, D&H Distributing, Ingram Micro, and TD SYNNEX generally operate upstream in the channel, helping vendors distribute technology to VARs, MSPs, systems integrators, and other solution providers. A VAR typically sells the resulting technology solution to the end customer while adding its own services or expertise.

Bottom line: VARs are evolving, not disappearing

VARs remain an important part of the IT channel, but the definition of a VAR has evolved. 

The traditional VAR model centered on taking hardware and software from technology vendors and adding customization, integration, and implementation services.

Today, those capabilities increasingly intersect with cloud, cybersecurity, managed services, AI, and strategic technology consulting.

The result is a more fluid channel ecosystem in which a company may operate as a VAR, MSP, MSSP, systems integrator, consultant, or hybrid solution provider depending on the services it delivers.

For customers, the most useful question is therefore not simply whether a provider calls itself a VAR. It is what value the provider adds around the technology – from product selection and integration to security, AI adoption, ongoing management, and measurable business outcomes.