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Are VARs worth it anymore?

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Technology leaders, CISOs have changed how they make purchasing decisions. Value Added Resellers (VAR’s) have been a staple in the industry, known for making procurement easy, but tech execs have grown weary from heavy markups on inferior products. Markups are understandable, but have we reached an era where the “V” and “A” have been removed? I believe we have.

As we celebrate Labor Day, I reflect on why I joined 3 Tree Tech and the lessons I’ve already learned. During my time attending Intelisys Amp’d Cx, and Telarus Partner Summit conferences, the “best of breed” vs. “all in one” debate occurred repeatedly. Technopedia defines best-of-breed as “the best system in its referenced niche or category.” All in one is seen commonly within VARs as they have multiple offerings they can combine into a holistic package. Think of all in one as a quiver with several arrows in it, best-of-breed is the best/sharpest arrow. 

Lines have been drawn with leaders in larger organizations swinging toward the “best of breed” side. Meanwhile, the small and midsize business (SMB) market tends to favor the “all in one” provider more. The reason behind this differing opinion seems to be resources: larger organizations have the resources to find the best tool. Small to mid-size organizations lack those resources, opting for speed. That speed, however, comes out of their long-term cost.

It’s no surprise VARs are tempted to push products that offer incentives relating to commission size or cost of sale reduction rather than what is superior in terms of function. Cisco’s partner program, for example, incentivizes resellers by offering market development funds to subsidize negative profit deals, offering rewards for certain volume levels of selling, and resources that empower the partner to find new leads and use existing marketing campaigns. 

As a partner, a supplier relationship like this is often needed in order to survive the competitive landscape. However, Cisco is no longer considered best-of-breed in most areas. Many best-of-breed options are relatively new companies that lack the resources to educate partners and subsidize their business development efforts.

Existing resources for CISOs

Because the landscape has become so confusing,  CISO often search for tech that solves their unique problems at conferences. They scour the floor for the right company that can address their pressing challenges or challenges they aren’t even aware of to begin with. Tech execs know the struggle of filtering through the noise quite well. 

The 2022 RSA Conference, the world’s leading information security conference, most recently took place at the Moscone Center in San Francisco. The event attracted over 26,000 attendees and had 400+ exhibitors, but 3 Tree Tech’s CTO, Eric Skeens, had concerns. He attended this conference and mentioned it was difficult to see all the vendors/options, let alone internalize all of their pitches, vetting their offerings. When everyone claims that their tech is the latest and greatest, it is difficult to discern who can truly deliver.

The best CISO resources

Networks are the obvious solution for CISOs but tech execs around the country are dealing with similar challenges. Gartner is also a positive resource, but in budget-sensitive times pay to play is a hard sell to the CFO. Many CISOs in the industry use a combination of resources to cover their bases. But one thing is consistent, most solutions are problem laggards. 

In other words, by the time the solution bubbles onto your radar, you’re reeling from damage done or dealing with newer more pressing issues. For those going the VAR route, this entire time you paid large markups and for costly reports.

If you think we will get to a point where the industry slows down or finds an equilibrium of some sort, don’t hold your breath. Paul Michael, author of “How Fast is Technology Advancing?” published in Media Peanut, stated that “Advances in tech have grown at an exponential rate through the past 10 years. The tech industry is on pace to exceed $5.3 trillion in 2022, sitting at a 5-6% growth pattern year over year.

For those who wish to use true best-of-breed tech without VAR markups, there are startup advisory networks that you can volunteer at.These networks expose you to the next generation of technology but still require time hearing out, filtering through data, and vetting solutions. 

At 3 Tree Tech, we aim to be that trusted technology advisor for all of our clients. That’s why I joined. Our team is constantly scouting for the next unicorn, taking the burden off CISOs. My goal is to give technology executives a platform and company-agnostic solutions for tomorrow’s problems.

Jacob Friendman

Jacob Friedman is a Technology Scout at 3 Tree Tech in Portland. He enjoys researching new disruptive tech across the full stack and introducing it to tech execs across the United States. Message him right here.