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Outsourcing IT: Do You Need a VAR, an MSP Partner, or Something In Between?

If your internal IT team could use some help in delivering the IT results you need, where do you turn? The spectrum of potential outsourced IT services runs from a VAR that implements third-party products to an MSP Partner that proactively aligns your IT operations with your business goals.

This post helps you decide which type of outsourced provider is right for you by defining the four main provider categories and lining up your current needs with your best outsourced IT option:

What services does each type of outsourced IT provider offer?

There are four main categories of outsourced IT providers loosely categorized as Value-Added Reseller (VAR), VAR with Service, Managed Service Provider (MSP), and MSP Partner. There used to be two categories — VAR and MSP. But new cloud options — along with other new technologies and increasing cybersecurity issues — have spurred some VARs to also offer some managed IT services (VAR with Service) and some MSPs have to take an even more integral role in their clients’ business security, growth, and success (MSP Partner).

• Value-Added Reseller (VAR)

A VAR resells third-party software, hardware, and networking products at a markup and provides an additional service or services as the “value-add.” The value-add ranges from getting the new product up and running to providing system design, consulting, and training related to the product. VARs often bundle apps and hardware platforms as turnkey solutions, often for specific vertical industries, which can make it easier for an organization to integrate new technology.

IT Budgeting Guide for 2020

A VAR’s goal is to sell you a product or project to help your organization solve your stated problem.

A VAR generates revenues through flat-rate fees per license along with billable hours — it’s a limited engagement transaction. When something goes wrong with the technology the VAR has implemented, you pay the VAR (or someone else) to have it fixed.

• VAR with Service

With more clients moving some or all of their applications to subscription models in the cloud, VARs have had to deal with having fewer products and projects to sell. In addition, some new IT solutions inherently require more management and support. Some VARs are adapting by changing their business models to include acting as sales agents for cloud platforms or migrating toward an MSP model. Those that are migrating toward the MSP model provide ongoing services for the products they implement and management services for other parts of the customer’s network as well. Currently, there are many educational programs in the marketplace to help VARs make the transition to becoming MSPs.

The goal of a VAR with Service is to help you implement and maintain specific products on an ongoing basis and manage some segments of your IT operations.

When something goes wrong with the IT that your VAR with Service is managing, fixing it could be included in the service contract or it could be billed hourly, depending on your agreement.

• Managed Service Provider (MSP)

An MSP operates and maintains a client’s IT remotely for a set monthly fee, regardless of where the client’s network or infrastructure is located — on-premises at the client’s location, at the MSP’s location, in the cloud (public or private) or, most likely, a combination of more than one location. Services include, for example, 24/7/365 network monitoring and emergency services; hosting and managing of servers, apps, and networks; hardware maintenance; backup and disaster recovery; and comprehensive reporting. MSPs work closely with their clients, meeting regularly and providing strategic advice. The best MSPs adhere to standards-based management (such as ITIL (IT Infrastructure Library) practices) and security protocols, provide compliance documentation and manage audits, and are interested in client relationships that continue in perpetuity.

Cybersecurity Partner Interview Guide

The goal of an MSP is to keep a client’s network and infrastructure running smoothly at all times so the client can focus on achieving business results.

When an IT problem occurs, it’s the MSP’s responsibility to fix it as part of the monthly fee. Therefore, it is to an MSP’s advantage to prevent IT problems from happening in the first place and to fix any problem quickly.

• MSP Partner

An MSP Partner differs from an MSP in the level of involvement it has with aligning IT operations with business objectives. An MSP Partner looks at things strategically at the highest levels. It provides a deeper commitment to understanding how a client’s business makes money and applies that knowledge, along with the latest IT research, to leveraging IT in every area of the client’s business. An MSP Partner not only develops the strategic IT road map but leads the effort to implement it, including modernizing IT components and operations so that they align with business goals.

In addition, if a client needs fractional resources for a few months, such as engineers to design and implement a solution, the MSP Partner will provide them. Or if a client needs to update its business continuity plan, an MSP Partner will be at the table and then lead the IT-related activities. An MSP Partner will also provide its client with a deep bench of ongoing expertise. Its ability to function as a partner rests on its ability to continually find, hire, train, and retain top IT talent in a market facing an ever-increasing tech-talent shortage.

The goal of an MSP Partner is to deliver business results. It wants the same outcomes as the client and has the resources, knowledge, breadth, and depth to handle any IT-related issue regardless of size or complexity.

Which type of outsourced IT provider is the best for your situation?

Not every IT provider will fit neatly into one of these four categories but the categories offer a framework for determining the right outsourcer for you. Take a look at the column on the right to see which description most closely matches your current state of IT operations. The column on the right explains which type of outsourced IT provider will probably be your best match.

State of Your Existing ITOptimal Outsourced IT Provider
You don’t have confidence in your internal IT team. You are looking to establish structure using tools, processes, and procedures run by people who understand best practices.Work with an MSP or MSP Partner. To have a functioning IT department, you need someone experienced to manage your IT operations.
Your internal IT team has a few systems and processes in place but they aren’t effective. Your business needs more advanced tools and qualified people to manage them.Work with an MSP or MSP Partner. It’s unlikely a VAR or VAR with Service will have the established IT processes and procedures you need to ensure a fully operational IT department.
Your internal IT team has systems and processes in place, along with some budget planning, but the results are inconsistent. You know what you need to reach the results you want but you’re under-resourced and/or underfunded.Work with a VAR with Service to fill the gaps using their products and product support, such as managing a firewall.
– OR –
Work with an MSP or MSP Partner to fill the gaps using an operational component, such as managing your network, that includes managing the technology you already have.
Your internal IT team delivers consistent results with its policies, procedures, and budgets but IT operations overall are not aligned with your business strategies. Even though your team has hit past metrics, your IT operations are trailing behind the rest of your business because your team struggles to keep up.Work with a VAR or VAR with Service for specific products (such as implementing and maintaining multi-factor authentication) to create the capacity your internal IT team needs to focus on realignment and other mission-critical business tasks.
– OR –
Work with an MSP for a piece of your IT operation (such as network management, end-user support, or security management) to maintain an operational standard while creating the capacity for your internal IT team to focus on realignment and other mission-critical business tasks.
– OR –
Work with an MSP Partner to augment the traditional MSP role above by also leading the effort to modernize your IT components and operations to better align with your business. An MSP Partner can also apply temporary resources to help with the alignment process.
Your IT operations deliver the results you want and your internal IT team has a process in place to ensure they stay aligned with your business strategies..Congratulations! You do not need to outsource IT services.

 

How to choose the right provider now that you know which type you’re looking for

If you’re looking for an MSP or an MSP Partner, you should conduct one or more interviews with each top contender.

Ask them about their business processes, toolsets, and the clients they typically work with. You’re looking for an outsourcer that follows consistent processes (ideally, ITIL), uses a set of recognizable tools, and works with clients like you. Then ask them about their average client and employee tenure (look for a mix of both long-term and new relationships) and how they stay fully staffed. Finally, talk to them about how they’ve specifically helped clients that have been in the same situation as your organization and how they will define success when they partner with you.

Now that you have more options when choosing from outsourced IT providers — and now that more organizations are choosing outsourced solutions to meet their business goals — it’s more important than ever to choose your IT outsourcer wisely.

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