The Cloud and the Death of the Technology Reseller


May 16, 2017

The IT industry is in a constant state of change. It seems like as soon as people become comfortable with one technology or process there is a new one to upend the old order.

Today, that technology is the widespread adoption of the cloud, and it is changing the industry in ways no one could have anticipated. At face value, it provides organizations greater flexibility to design, test, and host applications.

That simple change alone has created ripples throughout the rest of the industry. Arguably the most notable of these changes is the end of the technology reseller or value-added reseller (VAR), and the rise of technology consultancy firms.


The Shift from Hardware to Services


In years past, technology resellers had a prominent role in the IT field. IT departments had fairly straight-forward objectives they wanted to achieve, and in most instances, the solution was to purchase the right hardware to support the right application in their on-prem data center.

This scenario has plenty of room for a VAR to provide value. They can supply human assets, expertise with the deployment process, and support services to ensure the equipment performed as expected. Yet, times are changing.

Today, we see a clear shift in the industry towards services as opposed to hardware, and it’s clear to see why. The cloud has created a consumer market in which a small startup can create an application and immediately gain access to enough compute and storage resources to support the application on a large scale.

Then, the application is simply delivered as a Software as a Service providing monthly recurring revenue to the business. Factor in the need for businesses to support mobile applications, and the cloud is an easy choice. On the whole, this is proving to be an easier, more cost-effective business model than the legacy approach.

If you look around the industry, you’ll notice even large developers following this trend. Cisco’s new collaboration platform, Cisco Spark, is cloud hosted. Genesys/Interactive Intelligence offers their cloud-based contact/call center platform PureCloud. Microsoft now has Office 365. The list goes on and on.


Where Does this Leave the Technology Reseller?


As more companies move more of their data to the cloud and more developers offer their products as services, the need for a technology reseller is going to drop sharply. Of course, hardware is not completely gone yet and not every company is going to adopt the cloud at the same speed, but at the end of the day, it doesn’t really matter.

Sooner or later, businesses are not going to have much of a need to hire a 3rd party company solely to assist in the deployment of hardware and applications. Instead, they need a technology consultant, and the distinctions between these two types of businesses makes all the difference.


The Technology Consulting Difference


A technology consultant is different than a value-added reseller. On top of facilitating hardware purchases, assisting with deployments, and providing support, a consultant can be a guide. They can help you navigate the ever-changing technology market. When there are a dozen Software as a Service applications seemingly offering a similar solution, a technology consultant can help you sift through the noise to select the best application to meet your company’s precise needs.

A technology consultant accomplishes this by understanding their clients on a deeper level than the average VAR. If a consultant can learn the IT and business process challenges of a company, they are better poised to offer a targeted, impactful solution. The days of catalogue-style IT purchases are over. An era of research, nuance, and in-depth analysis of SaaS applications comes next, and a technology consultant is uniquely suited to provide value in this area.

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About Mindsight

Mindsight, a Chicago IT services provider, is an extension of your team. Our culture is built on transparency and trust, and our team is made up of extraordinary people – the kinds of people you would hire. We have one of the largest expert-level engineering teams delivering the full spectrum of IT services and solutions, from cloud to infrastructure, collaboration to contact center. Our highly-certified engineers and process-oriented excellence have certainly been key to our success. But what really sets us apart is our straightforward and honest approach to every conversation, whether it is for an emerging business or global enterprise. Our customers rely on our thought leadership, responsiveness, and dedication to solving their toughest technology challenges.

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For Further Reading:

IT Consulting Is Customer Service at Heart

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