VAR, MSP, CSP, SP – Service Providers: What’s in a Name?

With dozens of different flavours we break down the service provider acronyms to highlight the key differences and benefits to each

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Unified Communications

Published: January 26, 2018

Ian Taylor Editor

Ian Taylor

Editor

I have personal experience working for all of the above, a VAR (Value Added Reseller), an SP (Solutions Provider), a CSP (Communications Service Provider) and an MSP (Managed Service Provider) but I only worked for one company. How you ask? Senior management changed the focus of the business and therefore the type of company we were perceived as.

Now you can stick cloud in front of any of the above and apparently you have a new flavour too. Although the lines between the different variants are blurring more and more there is a difference in ethos between them.

Old Fashioned Set Up
Times have moved on, in the hardware we use at least

Traditionally a VAR supplied hardware or software, often with some sort of wrap around to add value, but on the whole they were reselling, shifting boxes from one place to another. The value add either came via the wrap around services, that could have been extra delivery, installation or peripheral services, or via the expertise of the supplier when recommending what to buy in the first place. Or in some cases there was no value add at all.

An SP, in theory at least, should focus on selling things other than tin or licences. People, Intellectual property and time are their main focus. The wide variation of services they provide whether that is training, professional or managed services, consultancy, installation, and configuration differentiate them from the traditional VARs. The classic question of ‘why?’ should be asked more when a customer wants to order a new system or service to try and establish if they are going down the right path. Rather than just ‘yes’ and ‘where/how would you like that delivered?’.

Then you have the MSPs. A broad church with some only providing specific styles of support services, such as direct end user or 3rd line, and often heavily focused in a specific market vertical. On the whole though you would assume they cover all of the above services provided by VARs and SPs but with addition of, potentially long term, support or contracts to manage and maintain those systems. They undertake a more proactive approach to customer systems, monitoring environments and preempting and preventing issues or potentially expansions before they are even noticed or required by the customer themselves.

Venn Diagram
Hypothetical Complex Channel Venn Diagram

They are all just fluffy definitions though, and each specific company will overlap into another sphere with some of the services they provide. The Venn Diagram for channel space seems to have more overlap than difference. Surely, with the procurement expert ‘Google Shopping’ so prevalent, the days of basic re-sellers offering the cheapest prices with no wrap around services are done? Massive global companies offering huge monopolies of scale can’t be beaten on price so some form of bespoke value add has to be present to appeal to customers. Whether that’s great customer service, installation of the system or support during its use.

The other crucial development factor in the war of the service provider acronyms is the move towards consumption based models for software and services. As many software services and applications have migrated from a perpetual licence model towards ongoing SaaS the need for suppliers to remain integral to the process has grown. Less and less sales will be made as one off transactions so the need to remain ‘sticky’ is vital. Will the traditional old VARs now be classed as MSPs as they manage your ongoing Adobe or Microsoft licences? I think not, unless they provide some other benefits for organisations along the way.

How does this all impact customers? It doesn’t really. As long as they find someone who provides the services they need and can do them well, then it doesn’t matter what type of service provider they are, or call themselves. In the end times have changed, the way we buy products has changed and the sort of service we expect has changed. So it must be time for the channel of many acronyms to change too?

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