System Integrator vs Value Added Reseller: What You Need to Know

April 7, 2022
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Industry Trends
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GCSIT Staff
System Integrator vs Value Added Reseller: What You Need to Know

What is a system integrator vs value added reseller, and why does the difference matter? Here are the differences between the two services. GCSIT helps organizations adopt information technology that helps them compete in an increasingly dynamic market.

Many people don't understand what value-added resellers (VARs) and systems integrators mean in the IT industry. Even when the differences between VARs and systems integrators are explained fully, confusion can persist.

An independent VAR is a business that provides additional value to manufacturers' products through the specialization of its services in a specific niche market or product line. A systems integrator service provides value to manufacturers through three distribution channels:

  • The manufacturers offer the VARs several incentives for promoting their products, such as discounts for volume purchases, marketing funds, commissions, and other incentives.
  • Through independent channels, VARs resell the product to customers at a markup or market the product to them.
  • As a VAR, you are responsible for all hardware and software services, including installation, training, warranty service, and warranties. Added-value is based on the fact that the reseller adds value to the products before reselling the products.

In contrast, systems integrators are not often involved in buying products from manufacturers and reselling them to their customers. Alternatively, many systems integrators will charge commission to supply hardware and software for clients. Then they will integrate the hardware and software into an overarching structure that will achieve or surpass their customers' business objectives.

But what are the differences between VARs and systems integrators?  

What is a Value-Added Reseller?

VARs increase the value of outsourced products by reselling them along with added products or services customized for resale to end-users. Many value-added resellers in the information technology (IT) industry provide additional products or services to complement the core product, such as hardware, installation services, consulting, troubleshooting, or other related products or services. Here are the principal functions of a value-added reseller:

  • Buying products at wholesale prices before reselling them to consumers at retail cost.
  • Purchasing products usually from distributors rather than direct from manufacturers.
  • Offering fully designed and ready-to-deploy turnkey applications.
  • Providing training and consulting services for the technologies it offers.
  • Acting as a purchasing agent on behalf of the client so that the client does not have to work with multiple vendors; VARs act as a single point of contact.

What is a System Integrator?

Typically, a system integrator is an individual or organization responsible for implementing IT systems on an enterprise-wide basis for an organization.

A system integrator is a professional entity that manages a complex IT solution's lifecycle, from its inception to its final phase of operation. Deployments can include software, hardware, networks, and hybrid IT services to accomplish the targeted objectives. Systems integrators are sometimes known as solutions providers.

  • Builds a comprehensive, customized IT system using a variety of products and services from many different manufacturers, which can involve multiple types of hardware, software, or networking.
  • Provides purchasing and distribution services for the purchase of products directly from manufacturers and independent distributors.
  • Delivers IT products and services to address particular business challenges.  
  • Integrates systems that might utilize hardware, software, and additional tools.  

You should carefully consider each company's service level and ability to provide products that meet the specific needs of your particular business when selecting a VAR or system integrator. Systems integrators are more suited to discussing their experiences of working on similar projects than resellers; that is why they can provide the best references for the products they carry. Moreover, it's essential to consider if a combination of the two services is an appropriate solution for your current or planned technologies, as well as the needs of your company.

At GCSIT, we are proud to help diverse organizations adopt the technologies, tools, and resources necessary to boost their productivity and compete successfully in constantly evolving markets. To discuss how your operations can benefit from systems integration, please get in touch with our dedicated team to schedule a consultation. To learn how agile systems could benefit your business, please download our whitepaper.

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