Guest Column | February 21, 2023

VARs 'Backup' Their Business Model By Transitioning To Managed Services

By Brian Dutton, Assured Data Protection

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The demand for cloud resources continues to grow at a rapid rate. VARs are capitalizing on this by switching to managed services to adopt new business models and capture recurring revenue. Brian Dutton, Director, U.S. Sales and Client Services at Assured Data Protection, explains why many are taking the white label route to becoming MSPs.

In today’s volatile climate businesses are looking to drive cost efficiencies. The utility model the cloud offers is especially appealing to businesses as it allows them to reduce capex and regulate usage to suit their needs. This applies to data storage, backup, and disaster recovery at a time when every business is trying to achieve cyber resilience. VARs are stepping in to meet this need by adopting cloud and SaaS solutions to offer consumption-only and managed services. However, making the transition from a traditional VAR - that resells customized hardware and software - to a provider of managed services doesn’t happen overnight. The switch requires a fundamental shift in the way VARs always have done their business.

The VAR business model is transaction based. It’s a traditional buy-and-sell process based on a very specific order or solution that meets the customer’s requirements. The MSP model is completely different. It’s based on usage in return for flexible, recurring monthly payments. It’s about meeting a constant flow of demand and learning how to best service that demand. As a result, they need a model that bridges the gap between both worlds. White label provides that bridge and more.

White Label Removes Barriers To Entry

Historically the MSP model has allowed VARs to access enterprise-grade services provided by the larger OEMs. But quite VARs tend to slip under the radar for being considered too small, or not having the required footprint to qualify for an OEM partner program. VARs can bypass this obstacle altogether by partnering with accredited MSPs that offer a white label solution that has operationalized the management and delivery of the OEM service. A solution that effectively repackages the managed service offering and removes all the costs and complexities associated with starting up as an MSP.

A well-crafted white label solution can help to absorb all that up-front investment. As a result, VARs should look for solutions that provide them with a well-defined and easy-to-implement MSP service that they can roll out to customers almost immediately. The white label route provides VARS with a ready-made go-to-market strategy which is also supported by legal and contractual processes they can use to sign up new customers and manage relationships. It also provides VARs with the back end and technical expertise needed to support and grow those ongoing relationships, besides troubleshooting any issues should they arise.

But if it’s going to work, the white-label solution needs to be an MSP service that is straight out of the box. That’s why it’s important for VARs to partner with MSPs that have been through the adaptation process already and have managed to hone an OEM service into an accessible white label format that will deliver that product as-a-Service. One that other MSPs can easily adopt, market, resell, and gradually build up their customer base.

Building A New Channel Business

Being an MSP allows you to be more flexible and generate new revenue. The white label solution provides VARs with quick entry to new MSP markets, but crucially it allows them to capture all the topline revenue.

It’s no secret that we specialize in the DR and backup space. We assessed the market a long time ago and identified Rubrik as an OEM with a service that we could build an MSP offering around. We also wanted to build a proposition that was synced with their channel strategy, and we now provide some of the biggest and best VARs in the marketplace with MSP capabilities.

But the white label model isn’t restricted to immutable backups. It’s an option that’s available to VARs and vendors regardless of their domain expertise. It can offer routes to market for businesses wanting to expand into any managed service category, whether that’s cloud, security, or desktop services.

Scale To MSP Success

Businesses are now looking to retire their physical assets and move operations to the cloud. As they reach the end of hardware life cycles their cloud investment decisions will be influenced by which provider can step in to support them on their cloud journey. Especially as they look to adopt data management solutions that will help them achieve cyber resilience.

VARs can access white label options that enable them to offer operationalized services based on recurring cost models. From that point, they can begin building a fully-fledged MSP business designed to cater to on-prem, cloud, or consumption-only services, depending on customer requirements.

However, this doesn’t mean VARs will turn their back on their reseller business. They can retain and grow existing revenue while offering newer managed services concurrently. The white label path to market means they can roll out new services at a pace that suits them without impacting on their core business. They can build their reputation in the MSP space and partner with OEMs. The MSP model offers the chance to scale to success.

About The Author

Brian Dutton is the Director, U.S. Sales and Client Services at Assured Data Protection. Brian previously worked with our U.S. Directors Stacy and Andrew at DS3 DataVaulting where he supported the channel relationships and helped grow the business. He has since been consulting for Colocation providers in Ashburn, VA and joined the Assured Data Protection team in July 2018.