Strategic Bundles, Stronger Margins: How VARs Can Thrive in the Age of AI and Cloud

The value aspect demanded from value-added resellers (VARs) is transforming with emerging technologies such as cloud services and AI integration, shifting market demands, and changing customer expectations. Hardware margins and software licensing fees once drove profitability, but now customers require more from their technology partners —guidance, insight, and measurable business outcomes. They want a partner who can help them make sense of the noise and actually move the needle for their business.

The traditional reseller model is fading fast, replaced by a more consultative, relationship-driven approach. For example, as a Microsoft partner, clients turn to you for more than procurement; they also expect your insights to optimize their Microsoft 365 and Copilot investments, thereby reducing license waste. Channel partnerships are shifting from simple product distribution to true solution delivery, where expertise and industry knowledge set you apart.

However, margins are tighter, competition is fiercer, and customers have more options than ever before. Standing out means building strategic solution bundles, creating recurring revenue, and showing real value — not just selling products. 

Strategic Bundling in the Age of AI and Cloud

As technology changes at ever-increasing speeds, VARs have shifted from simply reselling products. Today, VARs understand not only what technologies their customers need but also how those technologies integrate, scale, and grow within broader business contexts. It’s not just about selling products anymore — it’s also about connecting the dots and making sure every piece works together to drive real business value. 

Given the data governance challenges in AI and cloud adoption, leading VARs are also discovering that the key to thriving in this environment lies beyond competing on price alone but also on creating strategic solution bundles. They might bundle cloud storage and backup, AI-powered data management, compliance monitoring, and managed services into a single offering. 

For example, instead of just selling backup software, a VAR can deliver a full information lifecycle management solution – covering data discovery, classification, retention, privacy compliance, and business continuity – all in one package.  This approach transforms the VAR from a technology vendor into a trusted advisor, creating multiple touchpoints throughout the customer relationship and establishing recurring revenue streams that grow alongside the customer’s business. The key is understanding that customers aren’t just buying technology but investing in business transformation capabilities. When you help clients solve real problems and achieve their goals, you’re not just closing a deal — you’re building a partnership that lasts.

Challenges and Market Restraints for VARs 

Organizations are looking for outcomes-driven channel partners focused on addressing their business challenges and needs. However, VARs face fierce competition in marketplaces, including:

• Shrinking margins from direct sales channels. Vendors increasingly sell directly to customers, bypassing traditional channel partners, while commoditized licensing makes it tough to protect profits.
• Difficulty creating sticky, long-term customer relationships. VARs struggle to maintain ongoing engagement without a natural upsell path into services between major technology refreshes in a project-based sales model. It’s easy for customers to move on after the initial sale if there’s no reason to stick around.
• Bundling complementary technologies effectively. The complexity of modern IT stacks makes it difficult to create cohesive solutions that address multiple business requirements without introducing integration risks. One wrong move, and you’re troubleshooting instead of adding value.
• Need to demonstrate clear ROI to justify premium pricing. Customers can easily compare prices online, making it essential for VARs to articulate unique value beyond simple product aggregation. If you can’t show the business impact, you’re just another line item.

VARs embarking on this journey need partners who understand both the technical complexities of modern IT environments and the business imperatives driving digital transformation. A partner ecosystem helps VARs streamline operations and deliver ongoing value through analytics and governance tools. These capabilities enable VARs to prove ROI, reduce churn, and build recurring revenue streams.

The “Value” in VAR Makes a Comeback

In 2025 and beyond, VARs that can seamlessly blend technology and business expertise, creating flexible solutions that not only solve immediate problems but also build long-term advantages — advantages that direct sales models and online marketplaces just can’t match. But what’s actually driving this shift? Four big trends are shaping the new definition of “value” for VARs:

1. Increasing Demand for Customization

This creates opportunities for VARs to integrate hardware and software components, providing bespoke systems that enhance productivity and efficiency. Companies are increasingly looking for IT solutions that actually fit how they work — not just another off-the-shelf product. VARs that can customize their offerings stand to gain a significant market share. This trend emphasizes the importance of understanding client requirements and delivering personalized service in a competitive landscape.

2. Growing Complexity of IT Systems

As organizations adopt new technologies such as cloud, AI, and cybersecurity solutions, VARs play a crucial role in simplifying these complex environments by offering expert guidance, system integration, and managed services. IT stacks are getting more tangled every year, and most businesses don’t have the time or expertise to keep up. This complexity ensures a steady need for professional services and creates opportunities to expand VARs’ service portfolios. When you can help clients cut through the confusion –making all their systems work together, run smoothly, and stay secure – you become the partner they rely on. The ability of VARs to navigate and implement complex IT solutions enables them to provide significant value to businesses, thereby increasing their relevance in the market. 

3. Rising Focus on Cybersecurity

With increasing cyberthreats and data breaches, organizations need robust security solutions tailored to their specific environments. It’s not enough to offer generic tools — clients want security that fits their business and industry. This pushes VARs to offer specialized services that include threat assessment, compliance consulting, and security solution implementation. This focus on security drives revenue for VARs and solidifies their position as trusted advisors, essential in helping organizations safeguard their vital data and systems.

4. Expansion of Cloud Services

As organizations move toward hybrid and multi-cloud environments, the expertise of VARs will be crucial in making cloud transitions smooth and keeping everything running at peak performance. Businesses are increasingly migrating their operations to the cloud to improve scalability, flexibility, and cost-efficiency. But cloud isn’t just a one-time move — it’s an ongoing journey. The shift to cloud-based models often means clients need regular support, upgrades, and someone to call when things get complicated — creating real opportunities for recurring revenue.

Expand Your Partner Ecosystem for Enhanced Customer Outcomes

What do you need when you want to build something bigger? You need to invest in training your team, develop marketing campaigns that build real brand value, and nurture relationships that turn into long-term strategic advantages. A strong partner ecosystem helps VARs do all of this — offering co-marketing, sales enablement, and scalable service delivery. That’s how you move from being a transactional seller to a true strategic advisor. 

This transformation requires VARs to develop new competencies in areas like customer success management, solution architecture, and business outcome measurement. VARs can stand out by joining a partner program that gives them access to flexible licensing, robust support, and co-marketing opportunities — making it easier to build high-value, recurring revenue bundles and keep margins healthy with exclusive reseller benefits.