Many of you who have heard my views on the IT channel know that I place great stock in the value of words and what they mean. Nothing could be more true than my views on channel terminology. There is a great blog written last week about the different views being expressed about our industry. On the one hand, much of the data seems very bleak; IT spending forecasts, consumer and channel confidence, and other solid data seems to be very accurate. On the other hand, MSPs are testifying to a much different experience. MSPs are describing very hectic and profitable times, presumably as their clients attempt to cut their own internal IT costs and hand off more to their trusted managed service providers.
Why the dichotomy? There are two differing viewpoints being offered here and both are correct. The confusion occurs when the IT channel applies two words (MSP and VAR) and couples them with the same meaning. This is why people are confused when they hear MSPs doing so well and VARs having a rough time. Never before in the IT channel has the difference between MSP and VAR been so stark. As more MSPs strive to add more services revenue to their mixture, they are both increasing their business stability while at the same time insulating themselves from declining product sales. It is worth noting that MSPs have also increased their leasing activities, presumably to better cope with clients who need to spread out payments for services, products, and projects.
It’s entirely possible that MSPs are lying to us and giving a lot of false data. I don’t think this is true since I’m talking to MSPs who I trust and they are all giving the same story. Even the international MSPs are making similar reports.
The next time someone tells you the IT industry is not doing so well, may sure you know to whom you are speaking. They might be a VAR.