VARs & Solution Providers¶

Competitor Category Profile: Adjacent Competition

Category: Adjacent Threat Level: Medium Market Overlap: 50% Last Updated: January 2026

Category Overview¶

Value-Added Resellers (VARs) and Solution Providers combine technology sales with implementation services. They position as "vendor experts" but revenue primarily derives from product margins and vendor incentives.

Typical Positioning¶

"We're vendor experts who can implement for you"

Market Presence¶

Geographic Focus: Regional and national coverage Target Market: SMB to Enterprise (varies by VAR) Service Model: Product-led, services-attached

Service Offerings Comparison¶

Service Area	VAR/Solution Provider	SBK
Product Sales	✅ Core business	❌ Zero reselling
Implementation	✅ Vendor-specific	✅ Vendor-agnostic
Advisory	⚠️ Vendor-aligned	✅ Independent
Managed Services	⚠️ Growing practice	❌ Not offered
Compliance	⚠️ Tool-focused	✅ Framework-focused
Training	✅ Vendor certifications	✅ Custom training

Revenue Model Analysis¶

VAR Model¶

Primary Revenue: Product margins (15-40%)
Secondary Revenue: Vendor rebates and incentives
Tertiary Revenue: Implementation and support services
Incentive Structure: SPIFs, deal registration, partner tiers

Conflict of Interest¶

Vendor Incentive Structure:
├── Volume rebates (sell more, earn more)
├── Deal registration bonuses
├── Partner tier requirements (revenue thresholds)
├── SPIF programs (specific product push)
└── MDF (marketing development funds)

Result: Recommendations biased toward products that
       maximize VAR revenue, not client fit

SBK Model¶

Primary Revenue: Advisory and implementation services
Zero Vendor Incentives: No rebates, SPIFs, or commissions
Incentive Structure: Client outcomes and referrals

Strengths & Weaknesses¶

Their Strengths¶

Vendor Expertise: Deep knowledge of specific products
Preferred Pricing: Better rates through vendor partnerships
Implementation Speed: Experienced with standard deployments
Support Access: Direct vendor escalation paths
Financing Options: Vendor-backed financing programs

Their Weaknesses¶

Vendor Bias: Recommend products they sell, not best fit
Kickback Culture: Revenue from vendor incentives, not client value
Limited Scope: Expertise limited to partner vendors
Switching Disincentive: Discourage changing platforms (lose revenue)
Assessment Gaps: Don't evaluate competitors to their partners
Short-term Focus: Transaction-oriented, not strategic

Key Vendor Partnerships to Monitor¶

Vendor	VAR Incentive Model	SBK Position
Microsoft	CSP margins, Azure consumption	Certified, no reselling
Cisco	Partner tiers, deal reg	Evaluate all network vendors
CrowdStrike	NFR, deal registration	Evaluate all EDR solutions
Palo Alto	Partner program, margins	Evaluate all firewall options

Competitive Dynamics¶

When We Win Against VARs¶

Client realizes recommendations were vendor-biased
Client has technology sprawl from multiple VARs
Client needs rationalization of existing investments
Client preparing for compliance audit (needs independence)
Client wants strategic guidance, not product push

When We Lose to VARs¶

Client has committed budget for specific vendor
Client prioritizes "one vendor" simplicity
Client relationship with VAR is strong
Client needs financing (vendor-backed)
RFP written around specific vendor requirements

Counter-Positioning Strategies¶

Primary Differentiator¶

Vendor-agnostic recommendations — We evaluate all options, not just partners

Key Messages¶

"They get kickbacks from vendors they recommend—that's not advice"
"We'll audit your current vendors and find what's actually working"
"Transparent pricing: what you pay us is what we earn, period"

Proof Points¶

Zero vendor partnerships or reselling agreements since 2010
Technology rationalization savings of 30-40% typical
Vendor scorecards that compare ALL options, not just partners

VAR Tactics to Watch¶

Common VAR Sales Tactics¶

Lock-in Contracts: Multi-year agreements with early termination penalties
Bundle Pressure: "You need the whole suite for this to work"
Fear Selling: "Only our vendor can handle this threat"
Technical Debt: Implementations that require ongoing VAR support
Upgrade Pressure: Push new versions for margin, not value

Counter-Tactics for Clients¶

Request vendor-neutral assessment before any purchase
Demand transparent pricing (show vendor margins)
Require multi-vendor evaluation for any significant purchase
Build internal capability to reduce vendor dependency

Threat Assessment¶

Factor	Score (1-5)	Notes
Market Overlap	3	Different primary service
Service Overlap	3	Advisory competes
Price Competition	2	Different value prop
Differentiation	2	Clear differentiation
Overall Threat	2.5	Manageable with positioning

Monitoring Triggers¶

Track these signals for competitive intelligence updates: - [ ] VAR advisory practice expansions - [ ] New vendor partnerships announced - [ ] Services-first positioning changes - [ ] Compliance practice launches - [ ] Acquisition by larger distributors