I’ve worked for a Value Added Reseller (VAR) in the past and it was a good run of my career before I started working at Tech Field Day. The market was already changing eight years ago when I got out of the game. With the advent of the pandemic that’s especially true today. Quite a few of my friends say they’re feeling the pressure from their VAR employer to stretch beyond what they’re accustomed to doing or outright being treated in such a way as to be forced out or leaving on their own. They tell me they can’t quite understand why that’s happening. After some thought on the matter I think I know. Because you represent debt they need to retire.

Skill Up

We don’t start our careers knowing everything we need to know to make it. The industry spends a lot of time talking about careers and skill paths and getting your legs under you. Networking people need to learn Cisco or Juniper or whatever configuration language makes the most sense for them. Wireless people need to learn how to do site surveys and configure access points. Server people need to learn operating systems and hypervisors. We start accumulating skills to land jobs to earn money and hopefully learn more important skills to benefit our careers.

Who benefits from that learning though? You certainly do because you gain new ways to further your career. But your VAR gains value as well because they’re selling your skills. The “value added” part is you. When you configure a device or deploy a network or design a system you’re adding value through your skills. That’s what the VAR is charging for. Your skills are their business model. No VAR stays in business just reselling hardware.

Accumulating skills is the name of the game. Those skills lead to new roles and more responsibility. Those new roles lead to more money. Perhaps that means moving on to new companies looking to hire someone that has your particular expertise in an area. That’s a part of the game too, especially for VARs. And that’s where the whole debt mess starts.

Double Down on Debt

Your skills are valuable. They’re also debt. They represent a cost in time, money, and resources. The investment that your VAR makes in you is a calculated return on that debt. If your company primarily deploys Cisco networks then the training you get to install and configure Cisco switches is a return on your VAR being able to hire you out to do that skill. Being able to install and configure Juniper switches isn’t a valuable skill set for them unless they move into a new line of business.

People are no different. We acquire skills that suit us for a time that we may or may not use forever. It’s like riding a bike. We use it a lot when we’re young. We stop using it when we start to drive. We may start again when we need to use a bike for college or for living in a large city or if we pick up cycling or mountain biking as a sport. However, the bike riding skill is always there. It is a sunk cost for us because we acquired it and keep it with us.

For a VAR, your skill is not a sunk cost. It’s a graph of keeping the amount of billable hours you contribute above the line of debt that you create to the company. If you spend 85% of your time installing Cisco switches you are well above the debt line to the company. But if your company stops installing so many switches your value starts to fall as well. It could be that the technology is old and no one is buying it. It could be that companies have shifted the way they do business and need different resources and technology. It could be that a new partnership has created competition inside your organization.

No one wants to the be a last buggy whip manufacturer. VARs thrive on attacking markets that are hot with huge potential for profits. When a skill set becomes a commodity VARs are competing on pricing they can’t always win. That drives them to investigate new markets to offer to the customer base. In order to deliver those new technologies and solutions they need skilled people to install and configure them. The easiest solution is to acquire talent to make that happen. As above, VARs are always willing to pay top dollar to professionals with the specific skill sets they need. Bringing someone in to do that new line of business means they’re producing from Day One and keeping their value above the debt line of their salary.

The other way that VARs compete in these new markets is by training existing professionals on the new technology. Everyone that has ever worked in a VAR knows of the people that get tasked with learning how to deploy new storage systems, new network equipment, and even entirely new solutions that customers are asking for. I know I was that person at my old VAR. If it needed to be learned I was the one to do it first. I jumped in to deploying iSCSI storage, wireless access points, and even VoIP phone systems. Each time I had to spend time learning those new skills and adding them to my existing set. It was a cheaper method in the short term than bringing entirely new talent on board.

Get Out of Town

The friction in the training approach comes when it’s time to value your employees and their skill sets. If I’m getting paid to deploy Cisco switches and now my company wants me to learn how to install Palo Alto firewalls then I’m going to eventually get a raise or a new role to cover this expanded skill set. And rarely, if ever, do employee salaries get adjusted downward to compensate for old skills that are no longer relevant being supplanted by new marketable skills. Suddenly all those technologies I spent so much time learning are technical debt my VAR is paying for.

VARs need to be able to jump into new lines of business in order to survive. And that sometimes means shedding technical debt. If you’re a highly paid employee that earns twice as much as someone that has the specific skill set your VAR needs for a new project then your value to the at this current moment is likely much closer to the negative line of skills versus debt. You may have more experience or more familiarity with the process but that doesn’t translate as well into real value. If it did contractors wouldn’t be as well compensated as they are.

Now your VAR has a choice: keep paying you a lot and investing in their technical debt or bring on someone new that moves more closely with their new lines of business and start the escalator ride all over again. Unless you’re an exceptional employee or you are moved into a management role that usually means you’re let go or encourage to find another role somewhere. Maybe you get lucky and another VAR needs exactly what you offer and they’re willing to pay to get it. No matter what, the VAR is ridding themselves of technical debt. It should be no different than retiring an old laptop or installing new software to do help desk ticketing. But because it’s a person with a life and a family it feels wrong.

Rise Above

Is there an answer to this problem? If there is I don’t think we’ve found it yet. Obviously the solution would be to keep people on staff and pay them what their skill set is worth to the company. But that could entail retraining or readjustment in compensation that people aren’t always willing to do. VARs aren’t going to pay hefty salaries for skills that aren’t making them money. Other VARs may want to pay you for your skills but that’s not always a guarantee, especially if your skill set is extremely specific.

The other possibility is more akin to the contractor system, where you’re only hired for your skills for the period of time that they are needed. In theory that works very well. In practice the challenges of capital asset acquisition and personal benefits make contracting full-time almost as much of a hassle as changing jobs every few years chasing a bigger paycheck or a company that values your skills. There isn’t a clear-cut answer. Part of that reasoning is because the system works just fine the way it is. Why fix it if it’s not broken? It would take a massive shift in IT toward a new paradigm to force the kind of soul searching necessary to change the way VARs handle their staff. Cloud is close. So too is DevOps and programmatic IT. But for the kind of change we’re talking about it’s going to take something even bigger than those two things combined.

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Tom’s Take

After reading this I’m sure half of you are scared to death and swear you will never work for a VAR. That’s a bit short-sighted. Remember that they’re a great source of training and experience. Customer networks stay fairly static and only require specific kinds of maintenance from time to time outside of deployments. If you want to hone your skills on a variety of technologies and get very good at troubleshooting then VAR life is absolutely where you need to be. Just remember that you are a resource with a value and a burden. Despite the mantra of being a “family” or other feel-good nonsense you will eventually reach the point of being the uncle that constantly incurs debt for very little return. Every family shuns those kinds of members. Make sure you know your value and how you can contribute. If that’s not possible where you are now then make sure it is wherever you land with whatever skills you need.