Value Added Resellers (VAR’s) come in all flavors, shapes and sizes – they provide a vital service to IT departments who are suffering from severe budgetary constraints, staff and skill shortages and issues in implementing and managing increasingly complex solutions. Successful VAR’s are those who are delivering skills, customer service, bottom line improvement and are cost effective, but unfortunately, customers frequently confuse “cheap” with “value added”.

Cheap isn't necessarily bad - in fact it can be excellent! Cheap is not a good thing when it places constraints on future development and adaptability of the network. It is a definitely bad thing when the “cheap” solution subsequently incurs excessive management costs or worse, a serious management issue because the solution is failing users and business expectations.

No IT manager likes to be in the situation when they are called in to explain why a solution implementation is over budget or worse, considered to be a failure!

Frequently, cheap means that the solution cannot be scaled up if it is a success or simply to meet the needs of a growing company. The VAR usually is the constraining factor in these instances because solution substitution is rife in the IT market – it is not fair to say security solutions are like commodities but it is not a far stretch to make that conclusion from the lofty heights of the boardroom. In practice, it is the VAR you choose to work with who is the constraining factor in exploiting or upscaling a solution for your business.

One typical reason for this is that the VAR is cheap+. Cheapo charging VAR’s do not usually have the financial foundation to continue with developing their own skill sets which you rely upon to be delivered into your own operation. They usually do not have the breadth of support from solution providers – particularly watch for a VAR with only a couple of certifications but who claims to provide a wide range of services.

Cheap also means sub-standard or no realistic SLA when it comes to customer service.

Imagine a solution that the users love where adoption is widespread and the application becomes mission critical to the board and the staf. Unfortunately, the application is hosted by the VAR who is unable to afford enterprise class connectivity. Now you have the telephone ringing incessantly as everyone from the VP Sales closing a deal in California to the customer service reps in your NJ call center suddenly find they can’t do their jobs.

In turn – you make the call to your VAR – ask yourself what you are going to get, a voicemail or a person?

Ask yourself the same question except it is 3am on Christmas Day and the application is delivered over the WAN to 4 continents and every time zone?

This is where “cheap” simply means “bad”. The answer is to focus on cost-effective solutions which demonstrate clear ROI and are backed by a VAR which has the substance to deliver the SLA you need and can afford. In these cases, it is far better to go with a VAR who is charging appropriately for their services, rather than "cheaply".

IT budgets are tight, in fact SMB’s are only reporting a 5.6% increase in budgets (before inflation) for the next 4 years (2009 to 2013). The situation for enterprise class customers is even worse with a contraction in IT spend in real-terms for the next 4 years (according to a recent IDCB Market Analysis and Forecast).

In addition to constrained IT budget allocations, IT managers must manage networks with extensive staff-shortages in their departments. Not only is there a people shortage, but a shortage in the skills and experience required to manage and implement solutions. Hardware and software providers are increasingly bringing complicated solutions to market – virtualization is a very good example of this, with a high demand for professionals with Hyper-V and Citrix experience; security is another good example with providers such as Checkpoint and MacAfee, bringing more complex solutions to bear on what are, complicated threats to networks security and company data.

It is the responsibility of an IT manager to protect the network, ensure performance meets the needs of the business and deliver real ROI to the bottom line. Turning to VAR’s and system integrators is one way in which IT departments can manage their budgets and meet their objectives. The issue becomes, how do you choose from the large number of companies vying for your business in the VAR/SI marketplace?

First of all, VAR’s should have the appropriate certifications and provider partnerships in effect to deliver the solutions and services a company is looking to source. Their staff has to be current and up-to-date in the specialized areas which are relevant to the delivery and management of the solutions into the client.

More than this, there should be a distinct transfer of knowledge from the VAR to the client’s staff – it helps enormously with staff development and in the reduction of operating costs if in-house staff can be “brought-on” in new techniques and how to manage the on-site aspects of a solution implementation.

A secondary issue is what a VAR can do to shift capital expense to operating expense. This is important because the vast allocation of an IT budget (at least 80% in a typical company) is dedicated to operating costs which leaves precious little budget to implement solutions and new projects. IT management has an uphill task of convincing boardrooms to allow even microscopic upgrades unless the financial equation adds up. VAR’s with Software as a Service (SaaS) offerings are increasingly in demand because this achieves a straight shift of expense from the capital caption to the operating alternative, making an IT manager’s life that much easier. It is this financial/management skew in terms of what can be done to alleviate an IT manager’s budgetary constraint and yet achieve positive improvement to the network and business functionality which can differentiate a VAR.

Thirdly, ask what enterprise-class continuity partners a VAR has. Most of the solutions which are being deployed today require fully “on” web capability; email, web access, intranet based business processes, hosted applications, and of course, Saas solutions, all demand a very resilient and high-availability solution. VAR’s as stand-alone companies are not likely to be in a position where they can deliver this themselves and in turn must rely on an enterprise-class provider - thus putting you into business with someone who has to outsource some of your needs. If they don’t have one, you have to question the viability of their service offering.