The Rise of the VAR/MSP
Notice: This blog post was originally published on Indeni before its acquisition by BlueCat.
The content reflects the expertise and perspectives of the Indeni team at the time of writing. While some references may be outdated, the insights remain valuable. For the latest updates and solutions, explore the rest of our blog
Key takeawaysKey takeaways are generated with AI assistance. Because automated summaries can occasionally contain errors or miss important context, always refer to the full blog post for complete information.The article discusses the rapid growth of the Managed Service Provider (MSP) market and how MSPs address a common organizational need: continuous 24/7 operation of critical infrastructure, often at lower cost than building in-house teams. It highlights Value Added Resellers (VARs) shifting from low-margin equipment sales and project services toward recurring-revenue MSP models, leveraging their existing expertise to deliver managed services. The piece uses indeni and Fujitsu as examples of this transition and notes indeni's role and pricing alignment that enables MSPs to deploy its technology across customers.
Why are VARs moving toward MSP-style recurring revenue models?
VARs historically relied on low-margin equipment sales and higher-margin one-time professional services, which limited predictable income. By shifting to MSP-style recurring revenue models, VARs can forecast future revenues, increase margins, and build a more stable, scalable business. Their existing expertise from reselling equipment and delivering professional services makes them well positioned to convert those skills into ongoing managed services, providing continuous operational value to customers.
How does indeni fit into the MSP and VAR transition described in the article?
indeni is positioned as a core element that MSPs and transitioning VARs use to deliver managed services. The article provides Fujitsu as an example of an MSP that has built offerings around indeni’s technology. indeni’s pricing model is noted to align well with MSP needs, giving providers flexibility to roll out the product across existing and new customers, which supports the operational and commercial shift toward subscription-based managed services.
What operational advantages do organizations gain by using MSPs according to the article?
Organizations that use MSPs gain access to expertise in 24/7 operation of critical infrastructure, often at a lower cost than maintaining equivalent in-house teams. MSPs can provide continuous monitoring and management, addressing gaps in around-the-clock operational capability. While some large enterprises may be unable to use MSPs due to security or confidentiality constraints, many organizations leverage MSPs to improve reliability and reduce the burden of ongoing infrastructure operations.
The Managed Service Provider (MSP) market is exploding. It’s been this way for a few years now. It makes a ton of sense – MSPs can offer something organizations are lacking and for a lower cost: expertise in 24/7 operation of critical infrastructure.
Some, usually larger, enterprises are unable to use MSPs today due to security and confidentiality requirements. However, many who can, choose to use MSPs to run their infrastructure. We, at indeni, are happy to see this trend as MSPs are a great partner of ours. Take Fujitsu, for example, a leading MSP in the UK & Ireland who has converted their MSP offering to run around indeni’s technology.
One thing that we started seeing more and more in 2014 and now 2015, is the rise of the VAR/MSP. Value Added Resellers (VARs) are those who sell network equipment and professional services to large enterprises. Historically, their business was primarily around making a low margin on physical equipment sale (and maintenance) and a higher margin on professional services (design and implementation of projects).
However, much like startups and more established tech vendors have figured out, a recurring revenue stream can greatly increase the business’s profitability. Almost all such vendors today use (or are moving to) annual subscriptions to provide services instead of selling perpetual licenses. It provides them with an ability to forecast future revenues, increase margins and build a solid business.
VARs are now going the same way. They are leveraging their expertise (built through reselling equipment and providing professional services around it) to build strong MSP offerings. Several of our VARs have already begun offering this and many others are in the planning/building process. We’re very happy about this development – as indeni is becoming a core element of delivering these services. Our pricing model aligns with that very well too, so MSPs have considerable flexibility in rolling out indeni across their existing and new customers.
These are exciting times!
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