VAR (value-added reseller)

A VAR (value-added reseller) is a company that resells software, hardware and/or networking products and provides value beyond order fulfillment.

That value may take a number of forms. Traditionally, a VAR created an application for a particular hardware platform and sold the combination as a turnkey solution. In many cases, such bundles targeted vertical market niche applications.

While such custom-application VARs still exist, many VARs have turned to services as their key value-add. A VAR may provide consulting, design, implementation and training services around the hardware, software and/or networking components it resells. VARs offering such professional services in addition to products are often referred to as solution providers. Such companies typically form channel partnerships with one or, more often, multiple product vendors for assistance in building and marketing solutions.

Many product vendors offer partner programs that target VARs. Smaller VARs, however, may need to source products through distributors if the vendors they work with use a two-tier distribution model.

VARs have evolved over the years, with the VAR-to-solution provider shift providing one example. More recently, VARs have been becoming managed services providers (MSPs). As product margins decline and competition among solutions providers intensifies, VARs have looked to managed services as a source of recurring revenue and improved profitability. A VAR may become a pure-play MSP or add managed services as a line of business to complement its VAR operation.

Also see OEM (original equipment manufacturer), a company that includes hardware components from other companies in its own product.

This was last updated in April 2015

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